Mexico's Changing Distribution of Income?

The Mexican economy experienced three major economic events during the last decade. First, the implementation of the North American Free Trade Agreement (NAFTA) starting on January 1, 1994, was a major milestone in the opening of the Mexican economy. second, Mexico suffered its worst economic crisis since the Great Depression in late 1994 and throughout 1995. Third, the U.S. recession beginning in late 2000 resulted in a major decline in Mexican manufacturing employment, particularly in the maquiladora industry, where more than 200,000 jobs were lost between 2000 and 2002 (INEGI 2004). In brief, Mexico experienced considerable economic and political instability during the last decade. Changes in income distribution often occur slowly over long periods of time, but periods of significant instability may result in distributional effects during the short run. Mexico's political and economic instability during the last decade could be expected to affect its distribution of income in some obvious and not so obvious ways.