gauged by ENE survey from 2003 and the quantile regression methodology is applied (see Appendix B for details on the quantile methodology). This methodology characterizes the distribution of wages in more detail than traditional ordinary least squares (OLS) and two stage least squares (2SLS) regressions, as it makes it possible to break down the wage determination process across the entire wage distribution. Additionally, workers are allocated in different groups with different characteristics. Wages are compared across workers organized by gender, education and skills, labor status, and location. Findings for rural areas with more than 15,000 inhabitants are presented in Table 3.1. This section analyzes for each quantile whether the impact of various individual characteristics on wages is homogeneous across the wage distribution. Findings indicate that wages are by no means determined in the same way for high and low paid workers.

|**Table 3.1: Wage Determinat**|**ion in R**|**ural**|**Mexic**|**o (Qu**|**antile**<br>**Quan**|**Regre**<br>**tile**|**ssion**|**s), 200**|**3**||
|---|---|---|---|---|---|---|---|---|---|---|
|**Log monthly labor income**|**0.1**||**0.2**|**5**|**0.**|**5**|**0.7**|**5**|**0.**|**9**|
|**Worker Characteristics**|Coeff|SE|Coeff|SE|Coeff|SE|Coeff|SE|Coeff|SE|
|Age|0.054|0.004|0.049|0.002|0.043|0.002|0.038|0.001|0.038|0.002|
|Age Square|-0.001|0.000|-0.001|0.000|-0.001|0.000|0.000|0.000|0.000|0.000|
|Married woman w/o children|-0.271|0.049|-0.289|0.065|-0.261|0.025|-0.288|0.038|-0.248|0.040|
|Married woman with children|-0.443|0.026|-0.371|0.019|-0.321|0.013|-0.329|0.013|-0.336|0.016|
|Single woman w/o children|-0.317|0.030|-0.303|0.016|-0.330|0.009|-0.351|0.011|-0.330|0.013|
|Single womanwithchildren|-0.255|0.031|-0.252|0.022|-0.280|0.016|-0.327|0.014|-0.350|0.017|
|**Labor Status**|||||||||||
|Employer|0.218|0.061|0.388|0.027|0.507|0.024|0.593|0.031|0.710|0.035|
|Self-employed|-1.516|0.052|-1.163|0.028|-0.623|0.014|-0.278|0.016|-0.118|0.026|
|Informal Salaried|-0.116|0.036|-0.120|0.017|-0.133|0.012|-0.173|0.013|-0.255|0.027|
|Formal Salaried|0.418|0.027|0.235|0.017|0.139|0.015|0.079|0.017|_0.012 _|_0.032_|
|Contract|-0.901|0.066|-0.439|0.039|-0.160|0.022|-0.071|0.023|_-0.024 _|_0.036_|
|**Education**|||||||||||
|Primary Complete+|0.258|0.016|0.245|0.016|0.202|0.011|0.175|0.011|0.173|0.013|
|Lower Secondary Complete+|0.420|0.023|0.367|0.016|0.296|0.013|0.269|0.011|0.264|0.015|
|Upper Secondary Complete+|0.523|0.030|0.495|0.018|0.456|0.020|0.456|0.020|0.510|0.024|
|University Complete|0.956|0.036|0.980|0.021|0.986|0.022|0.988|0.019|1.030|0.030|
|Technical Education|0.633|0.030|0.579|0.022|0.537|0.022|0.536|0.024|0.624|0.033|
|**Region**<sup>**3**</sup>|||||||||||
|Norte +|0.376|0.035|0.376|0.019|0.376|0.019|0.253|0.012|0.274|0.026|
|Capital+|0.363|0.046|0.325|0.022|0.325|0.022|0.187|0.014|0.152|0.025|
|Golfo +|-0.105|0.034|-0.086|0.023|-0.086|0.023|-0.088|0.015|-0.081|0.013|
|Pacifico+|0.372|0.038|0.343|0.022|0.343|0.022|0.198|0.014|0.186|0.012|
|Sur+|0.101|0.028|_-0.022 _|_0.023_|-0.022|0.023|-0.038|0.013|-0.039|0.015|
|Centro-Norte+|0.215|0.037|0.202|0.025|0.202|0.025|0.104|0.012|0.093|0.014|
|Locality < 2,500 inhabitants+|-0.156|0.016|-0.192|0.011|-0.192|0.011|-0.141|0.009|-0.123|0.012|
|Constant|5.616|0.088|6.218|0.063|6.218|0.063|7.213|0.034|7.491|0.052|
|Source: Calculations based on ENE 2003, 2<sup>nd</sup><br>1Rural area defined as localities with less tha|quarter. Not<br>n 15,000 inh|e: cursiv<br>abitants.|e statistic|ally signi|ficant at|10 percen|t only.||||

**18**