The literature on income gaps between Chiapas and the rest of Mexico revolves around individual factors, such as education and ethnicity. Yet, twenty years after the Zapatista rebellion, the schooling gap between Chiapas and the other Mexican entities has shrunk while the income gap has widened, and we find no evidence indicating that Chiapas indigenes are worse-off than their likes elsewhere in Mexico. We explore a different hypothesis. Based on census data, we calculate the economic complexity index, a measure of the knowledge agglomeration embedded in the economic activities at a municipal level in Mexico. Economic complexity explains a larger fraction of the income gap than any individual factor. Our results suggest that chiapanecos are not the problem, the problem is Chiapas. These results hold when we extend our analysis to Mexico’s thirty-one federal entities, suggesting that place-specific determinants that have been overlooked in both the literature and policy, have a key role in the determination of income gaps.
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Place-specific determinants of income gaps: New sub-national evidence from México
1. Place-specific determinants of income gaps:
Sub-national evidence from Chiapas, Mexico
3/27/19 1
miguel_santos@hks.harvard.edu
@miguelsantos12
2. Chiapas is not only Mexico´s poorest state…
Source: INEGI (PIB) y CONAPO (Población)
23/27/19
0
50,000
100,000
150,000
200,000
250,000
300,000
Distrito
Federal
Nuevo
LeónCoahuila
Cam
peche
Baja
California
Sur
Querétaro
QuintanaRooSonora
Aguascalientes
Baja
CaliforniaColim
aJalisco
Tam
aulipasNacional
ChihuahuaYucatán
San
LuisPotosíSinaloa
GuanajuatoDurangoM
orelosVeracruz
ZacatecasTabascoHidalgoM
éxicoNayaritPuebla
M
ichoacánTlaxcalaGuerreroOaxacaChiapas
Non-oil Income per capita
(constant pesos 2010)
X 6.1
4. 4
The income gap between Chiapas and rest of Mexico keeps widening
Fuente: INEGI.
3/27/19
46.1%
43.6%
42.7%
42.4%
40.4%
41.1%
42.1%
42.8% 42.2%
41.2%
39.7%
53.4%
54.6% 54.0%
53.3% 53.4%
52.2%
54.6% 55.0%
53.0%
51.7% 51.3%
52.0% 51.8%
51.1%
49.6% 49.0% 49.0%
51.2%
49.6% 49.9% 49.3%
50.1%
35%
40%
45%
50%
55%
60%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Non-Oil GDP per capita
(as percentage of national income per capita)
Chiapas Guerrero Oaxaca
CAGR 2003-2013:
1.4%
CAGR 2003-2013:
0.2%
5. 5
Large differences in Mexico reproduce as in a fractal within Chiapas
3/27/19
0
5,000
10,000
15,000
20,000
Tuxtla
Gutiérrez
Com
itán
deDom
ínguez
Reform
a
Chiapade
Corzo
Tuxtla
Chico
Pichucalco
M
etapa
Jiquipilas
Cacahoatán
M
azatán
Villaflores
UniónJuárez
M
apastepec
Chiapilla
OsumacintaAcala
Chicoasén
FronteraCom
alapa
Escuintla
Tapilula
SanFernando
OcozocoautladeEspinosa
Tuzantán
Venustiano
CarranzaBochil
M
otozintla
Tecpatán
Acacoyagua
Coapilla
AngelAlbino
Corzo
LaConcordia
Teopisca
M
azapadeM
adero
Tapalapa
LasM
argaritas
Chapultenango
LaIndependencia
LaGrandezaJitotol
Simojovel
Pantepec
Bella
Vista
Huitiupán
Totolapa
ElPorvenir
M
arquésdeCom
illas
Bejucalde
Ocam
po
Tumbalá
Sabanilla
Am
atenango
delValle
HuixtánChilón
Larráinzar
Chenalhó
Zinacantán
Pantelhó
SantiagoelPinar
Chalchihuitán
Aldam
a
GDP per capita
(constant pesos 2010)
Source: PNUD, con base en Censo 2010
X 8.5
6.
7. 7
Usual suspects: Is it because of education?
Strong investment in education has reduced the schooling gap…
3/27/19
Fuente: Censo Poblacional 2010 (INEGI).
8. 83/27/19
Usual suspects: Is it because of education?
To earn the same as a Mexican worker in Chiapas you must study a lot more
Monthly income from work and years of schooling
To earn the same as a Mexican worker
with 6 years of schooling, in Chiapas you
must have 10 years of schooling
9. 93/27/19
Usual suspects: Is it because the quality of education?
Quality in education does not account for these large differences
Monthly income from work and years of schooling
10. Lessons from migrants: Chiapas vs. Rest of Mexico (100%)
10
0
20
40
60
80
100
120
140
Resto de Mexico Chiapas
Total
100.0
67.2
15.1
51.6
115.1
118.8
* Monthly income, controlling for years of schooling, quality (ENLACE), experience, gender and indigenous.
Monthly
Income
Migrant
Premium
Total monthly
income
Rest of Mexico Chiapas
3/27/19
Monthly
Income
Migrant
Premium
Total monthly
income
12. There are also usual suspects that are place-specific: Finance
123/27/19
Interest rates by type of business: Chiapas vs. Rest of Mexico
Micro-business Small business
Small business
Middle/sized business Large business
13. Business are unlikely to surge from within… as there are not
strong social bounds or trust out of the family circle
133/27/19
14. Name three people out of the family you trust to start a business:
Women network from Tucuman
143/27/19
15. Large distrust prevails beyond the family, associations or
cooperatives to pool assets and increase returns are unlikely
Social network of women in Cruztón
153/27/19
16. There are also usual suspects that are place-specific: Infrastructure
Roads…
163/27/19
Dávila, Kessel and Levy (2002):
highlighted the issue of
radiality of the Mexican road
system, as an issue to the
economies of Southern states,
and suggested four different
investments…
17. There are also usual suspects that are place-specific: Infrastructure
Roads…
173/27/19
By 2013, all these projects
have been completed…
The savings in distance and time
surpassed the expectations…
And Chiapas continues to lag
behind…
3/27/19 Chiapas, Mayo 2015
Ahorro
en dis-
tancia
(kms)
251.3
940.1
165.9
707.8
Ahorro
en tiem-
po
(hrs)
5.9
43.4
2.8
13.4
18. There are also usual suspects that are place-specific: Infrastructure
Chiapas also has three commercial airports…
18
Tuxtla Gutierrez
Tapachula
Palenque
19. There are also usual suspects that are place-specific: Infrastructure
And a brand new (mostly idle) port
19
28. There exist large difference in economic complexity within Chiapas…
3/27/19 28
29. Economic Complexity increases the explained variation of total
differences and is higher than any other of the factors
293/27/19
0.16 0.00
-0.03
0.05 0.02
0.15 0.35
0.64
SCHOOLING
EXPERIENCE
FEMALE
INDIGENOUS
RURAL
ECI
EXPLAINED VARIATION
TOTAL INCOME GAP
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Oaxaca Blinder Decomposition 2010
Indiv. Characteristics + ECI
Chiapas vs. Rest of Mexico
Factors associated to the income gap
36. 36
Transportation costs as a regressive tax
3/27/19
300
233
200
120
120
110
75
70
60
50
0
50
100
150
200
250
300
350
Director
escuela
Maestro de
escuela
(bilingüe)
Trabajadores
Prospera
Electricista Albañil Ayudante
fábrica Pox
Otros
trabajos (en
San
Cristóbal)
Ayudante
albañil
Ayudas
varias
campos
maíz/frijol
Lavandería
Cruzton: Daily salaries and cost of transportation
(40 pesos round trip in shared cab)
Salario diario Salario día (neto de transporte)
13%
17%
20%
33%
33%
36%
53%
57%
67%
80%
Daily equivalent of
monthly salaries (30 days) Wage per day
Daily wage (urban) Daily wage (net of transport costs)
37. 37
Identifying potential diversification opportunities at the municipality level
Tuxtla Gutiérrez Tapachula
San Cristóbal de las Casas Comitán de Dominguez
3/27/19
40. 40
Fuente: Censo de Población 2010, cálculos propios.
When you have few letters it is difficult to acquire new letters…
3/27/19
41. Atlas de Complejidad Económica
Funcionalidades y beneficios por tipos de usuarios
41
Tuxtla Gutierrez San Cristobal de las Casas
ComitánTapachula
42. So what do we propose? Bring the mountain closer to Muhammad
42
Pro-Chiapas:
Investment Promotion
Bring new business models
• Tapachula
• Comitan
• Palenque
• Chilon
• Tuxtla
• San Cristobal
• Reforma
• Ocosingo
43. México, Octubre 2014 43
Where do new business models come from? Elsewhere in Mexico!
44. So what do we propose? Bring the mountain closer to Muhammad
44
Pro-Chiapas:
Investment Promotion
Bring new business models
• Tapachula
• Comitan
• Palenque
• Chilon
• Tuxtla
• San Cristobal
• Reforma
• Ocosingo
Special Economic Zones
Agro-industrial Zones
47. Atlas de Complejidad Económica
Funcionalidades y beneficios por tipos de usuarios
47
Pro-Chiapas:
Investment Promotion
Special Economic Zones
Agro-industrial Zones
Public transportation:
Solve labor mobility bottleneck
Housing policy:
Habitats vs. Housing
Bring new business models
• Tapachula
• Comitan
• Palenque
• Chilon
• Tuxtla
• San Cristobal
• Reforma
• Ocosingo
3/27/19