Changes in Wage Inequality in Mexico from 1988 to1993: Approach Based on the Task Content of Occupations

Recent research on technical change and inequality has made significant advances by analyzing occupational task content such as abstract and routine requirements of jobs. However, not much is known for non-rich countries because of the lack of comparable datasets. This paper constructs such a dataset for Mexico by using the urban labor force survey and developing a concordance between its occupation codes and the US counterpart with taskcontent measures. We employ a detailed decomposition approach to quantify the contribution of technological change to inequality from 1988 to 1993, a period of rapid increase ininequality. We find that higher returns to abstract task content are the main contributor to the increase of inequality. We also find substantial regional and sectoral heterogeneity in the role of the returns to routine task content. Overall, incorporating occupational task content can enrich our understanding of wage inequality in developing countries.