Income distribution and poverty in Mexico

The recent publication of results from a household budget survey for the first six months of 1977 sheds new light on income distribution in Mexico. This paper reports on analysis of four such surveys, for 1963, 1968, 1975, as well as 1977, with adjustments for consistency and comparability. According to the results, the distribution of income has not changed much since 1963. Thus, although incomes are distributed very unequally in Mexico and poverty is widespread, the absolute income levels of the poorer households have risen more or less apace with those of their richer countrymen, at an annual rate of about 4% per year in real terms. The paper also touches on three important sources of poverty in Mexico: (a) rapid population growth, which has resulted in a high dependency ratio and explosive growth of the labor force; (b) neglect of productivity in a considerable portion of agriculture and the people who live from it; and (c) policies that biased Mexico's economic growth in ways that reduced demand for labor. Analysis of these data continues, both in Mexico and at the World Bank.