2026-07-01http://hdl.handle.net/123456789/417938The author implements several inequality decomposition methods to measure the extent to which total household income disparities can be attributable to sectoral asymmetries and differences in skill endowments. The results show that at least half of total household inequality in Mexico is attributable to incomes derived from entrepreneurial activities, an income source rarely scrutinized in the inequality literature. He shows that education (skills) endowments are unevenly distributed among the Mexican population, with positive shifts in the market returns to schooling associated with increases in inequality. Asymmetries in the allocation of education explain around 20 percent of overall household income disparities in Mexico during the 1990s. Moreover, the proportion of inequality attributable to education endowments increases during stable periods and reduces during the crisis. This pattern is explained by shifts in returns to schooling rather than changes in the distribution of skills. Applying the same techniques to decompose within-sector income differences, the author finds that skill endowments can account for as much as 25 percent of earnings disparities but as little as 5 percent of dispersion in other income sources.application/pdftext/plainCC BY 3.0 IGOhttp://creativecommons.org/licenses/by/3.0/igo/World BankADVERSE EFFECTAGRICULTURAL INCOMESAVERAGE ANNUALAVERAGE INCOMECOUNTERFACTUALDEBTDECOMPOSITION ANALYSISDECOMPOSITION RESULTSDECOMPOSITION TECHNIQUESDEPENDENT VARIABLEDESCRIPTIVE STATISTICSDEVALUATIONDEVELOPMENT STRATEGYDISTRIBUTIONAL CHANGESDISTRIBUTIONAL EFFECTSDISTRIBUTIONAL IMPACTEARNINGECONOMIC GROWTHECONOMIC ORDERECONOMIC REFORMSECONOMIC STRUCTUREECONOMIES OF SCALEEMPIRICAL EVIDENCEEXPECTED VALUEEXPLANATORY VARIABLESEXPORTSFACTOR COMPONENTSFREE TRADEFUNCTIONAL FORMFUTURE RESEARCHGDPGINI COEFFICIENTGROWING ECONOMYGROWTH DATAHIGH INCOMEHIGH INCOME INEQUALITYHOUSEHOLD INCOMEHOUSEHOLD INCOMESHOUSEHOLD MEMBERSHOUSEHOLD SIZEHUMAN CAPITALINCOMEINCOME COMPONENTSINCOME DIFFERENCESINCOME DISPARITIESINCOME DISTRIBUTIONINCOME EQUATIONINCOME INEQUALITYINCOME LEVELINCOME QUINTILESINCOME SOURCEINCOME SOURCESINCOMESINEQUALITY AVERSIONINEQUALITY AVERSION PARAMETERINEQUALITY CHANGESINEQUALITY DECOMPOSITIONINEQUALITY INDEXINEQUALITY LEVELSINEQUALITY MEASUREINEQUALITY MEASURESINEQUALITY TRENDSINTERNATIONAL TRADELABOR MARKETLABOR MARKETSLORENZ CURVEMACROECONOMIC CONTEXTMACROECONOMIC PERFORMANCEMACROECONOMIC STABILITYMIDDLE CLASSNATURAL DECOMPOSITIONNEGATIVE EFFECTNEGATIVE SHOCKPER CAPITA INCOMESPERSONAL INCOMEPOLICY RESEARCHPOORPOSITIVE EFFECTPOSITIVE IMPACTPOVERTY LINESPRICE CHANGESPRODUCTION FUNCTIONPRODUCTION INPUTSREAL INCOMEREAL INCOMESREDISTRIBUTIVE POLICIESREGIONAL DUMMIESREGRESSION ANALYSISREGRESSION RESULTSRELATIVE IMPORTANCERELATIVE WAGESREMUNERATIONREMUNERATIONSSECTORAL COMPOSITIONSIGNIFICANT IMPACTSOCIAL DEVELOPMENTSURVEY DESIGNTRADE BARRIERSTRADE LIBERALIZATIONTRADE REFORMSUNEMPLOYMENTWELFARE ECONOMICS