Productive structure and poverty in Mexico: A municipal analysis by three regions

Abstract

Identifying productive sectors that are key for growth is a transcendental issue for development-enhancing policies. We study the relationship between the productive structure of municipalities of the three Mexican regions with their poverty rates in 2015. We estimate models of poverty determinants on employment branches, controlling for economic, demographic, and territorial factors. Heterogeneous relationships between the productive structure and poverty were identified for each region and sector. For the southern region, branches such as transport, communications services, education, health, government, and tourism are related to lower poverty rates. For the central and northern region, lower rates are found for machinery and equipment production, insurance, business support, professional services, leisure, and government activities. These results suggest that policies based on the promotion of productive structures must consider regional differences to effectively reduce poverty.