Household income is mainly composed of factor income (labor income and operating surplus), profits from enterprises, social transfers, and remittances. It is highly concentrated in Chiapas. Figure 4.8 shows the income distribution by household quintiles in 2012, with data from the SAM. The notation used is:
HHD1 = Household quintile 1 HHD2 = Household quintile 2 HHD3 = Household quintile 3 HHD4 = Household quintile 4 HHD5 = Household quintile 5
The 20% richest households concentrate 58.4% of total household income. In contrast, the 20% poorest families in Chiapas concentrate only 4.6%. If quintiles I and II are added the result is striking, the 40% richest households together gather 77.3% of total household income while the same percentage of poorest families obtain only 11.8%. This graph makes evident the current huge disparities concerning income distribution in Chiapas.
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Household income disaggregated by source is illustrated in figure 4.9. The main sources of income are formal and informal labor, household operating surplus, enterprises, social transfers, and remittances. A reveling fact is that the main source of income of the 20% poorest households is social transfers, which provide 57.5% of their total income. Social transfers are then followed byinformal labor which, as shown above, is mainly characterized by very low wages and salaries. On average, someone with an informal employment earns 1.4 minimum salaries. The 2012 minimum salary in Chiapas is of $59.08 Mexican pesos, that is, USD$4.49 a day45. In addition, remittances and formal labor represent the third and fourth sources of income for this group, accounting for 7.3% and 6.7% apiece. As it might be expected, the share of social transfers within the composition of household income declines as income increases. In contrast, the main source of income of the 20% richest families is profits from enterprises (annual profit distribution), which contributes with 46.4% of their total income. It is followed by household operating surplus, informal and formal labor, with 17.4%, 15.5%, and 12%, respectively. For this group remittances represent the least important source of income, accounting only for 1.4%.
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Furthermore, figure 4.10 shows household shares in income source. With respect to social transfers, the 40% poorest households have the largest share which accounts for 53%. Within informal labor, household quintiles 5 and 4 have the largest shares with 49.2% and 22.5% while in formal labor a similar pattern can be observed because the same quintiles show the largest proportions accounting for 53.8% and 22.6%, respectively. It is important to highlight that the 20% poorest households have the lowest share in formal labor with only 2.4%. In other words, total labor income (formal and informal) is mainly earned by the 20% richest families while social transfers (Oportunidades and other non-conditional transfers) are mainly received by the poorest households. Another interesting fact to point out is that, within remittances, middle-income households have the largest share, accounting for 25.1%, followed by quintile 5. In contrast, families in quintile 1 obtain only 10.3% of total remittances. The latter can be explained by the fact that international migration is not a relevant activity in Chiapas. In addition, in gross operating surplus and enterprises (annual profit sharing) the largest share is received in both cases by quintile 5 by 84.4% and 68.8%, respectively.
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With respect to household expenditure, it accounts for $191 billion Mexican pesos, of which 2.2% is home consumption and 97.8% is consumption of market commodities. Figure 4.11 shows that of total home consumption, 62% corresponds to quintile 1 and 38% to quintile 2. In other words, only the 40% poorest households have home consumption (they produce in the agricultural sector for self-consumption). On the other hand, out oftotal consumption of market commodity, 55.5% corresponds to quintile 5 while 4.2% belongs to the poorest families. 75.6% of total market commodities is consumed by the 40% richest households while 12% by families in quintiles 1 and 2.
Overall, figure 4.12 depicts total private consumption by households. This pie chart shows that the largest share of household consumption is concentrated in the 20% richest households andaccounts for 54% of total consumption. If quintiles 4 and 5 are added up the result is even more striking, these two groups bear 73.8% of total household consumption in Chiapas. In contrast, the 20% poorest have the lowest share with 5.6% while consumption in quintiles 2 and 3 reaches 8.5% and 12.1%, respectively.
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The composition of household consumption by economic sector is presented in figure 4.13. This chart shows that the poorest households consume about 38% and 20.3% from the agricultural and educational-services sectors. The third main component of their consumption is the manufacturing sector with 17.7%. The 20% richest, in contrast, consume 42.5% from the manufacturing sector, followed by trade and other-services with 29.4% and 25.6%, apiece. This group consumes less than 1% from the agricultural sector. Consumption of commodities from the agricultural, educational-, and health-services sectors declines as income increases while the opposite pattern occurs for manufacturing, trade, and other- services.
Further, household consumption shares within economic sectors is illustrated in figure 4.14. This graph shows that in the agricultural sector the largest share of consumption belongs to households in quintile I, accounting for 49%, followed by quintile 2 with 30%. The poorest also have the largest share within educational- and health-services sectors, in each, they bear 25%. On the other hand, the richest families bear the largest consumption shares in
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trade, public administration, manufacturing, utilities and other-services sectors with 73%, 73%, 68%, 54%, and 41%, respectively.