The distribution of wage inequality across municipalities in Mexico: a spatial quantile regres-sion approach

Research background: According to classical labor economics, wage differences among regions of a country that has free-factor mobility should eventually vanish. However, the level inequality Mexican territories is increasing. The nature and causes this discrepancy are worth identifying. Purpose article: To identify spatial relationship existed in metropolitan system during years 2010 2015. Methods: We develop model wages considers interaction between units within region. Then, we specify autoregressive with average per municipality as dependent variable. This variable spatially lagged along other controls such productivity, schooling, migration. combine data from population economic censuses. perform quantile regression estimate effect region upon quartiles distribution. Findings & value added: Wage increases given when one said region?s municipalities. phenomenon occurs because municipalities neighbors enjoys increase, tends decrease. impact larger those whose lower range regional also increased by internal migration productivity. These latter findings some first for Mexico at aggregation level. A novel aspect our study its use territory an observation unit which statistics censuses combined draw inferences about inequality.