Local Labor Markets in Mexico: Definition, Databases, and Descriptive Analysis

With Lorenzo Aldeco, Daniel Chiquiar, Mariana Calderón, Gordon Hanson, and Claudia Velázquez.

This document describes the methodology used to group all the municipalities in Mexico into 777 local labor markets. The approach used to define local labor markets follows best international practices and hinges on the idea that there are groups of municipalities that are highly economically integrated and, therefore, constitute a single local labor market. After defining local labor markets, census population and housing data collected by INEGI are linked to local labor markets, covering the period from 1990 to 2020. With the definitions generated in this document, researchers from the academic community and the public and private sectors can study different aspects of the Mexican labor market using a unit of analysis that considers the interrelationships between the country’s municipalities.