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In this paper we examine the relationship between spatial inequality, place mobility, and spatial polarization in Mexico. We use data for 2457 Mexican municipios from 2000 to 2015. We apply classical and spatial Markov chains to measure spatial income dynamics and we employ a decomposition of spatial inequality to measure spatial polarization. In doing so, we ask the following questions: Has spatial inequality increased across Mexican municipios since 2000? What has been the role of place mobility in any changes in overall spatial inequality? Finally, we examine what the main components of place mobility have been over this period. We find evidence of a strong spatial dependency between municipios that has increased over time but we find no clear pattern at the state scale. Intra-state municipal inequality has relatively declined while Inter-state municipal inequality polarization has increased. We also find clear evidence that transitional dynamics of municipio incomes are influenced by spatial context. Substantial evidence shows that municipio income mobility is driven by a growth component that could be likely reflecting the devaluation of the peso over this period. Exchange mobility is found to be a more important component of overall place mobility than dispersion (inequality) mobility. • Evidence of spatial heterogeneity with high income pockets throughout all regions. • Spatial poverty traps point towards the need to focus on pro-poor regional growth strategies. • Growth mobility accounts for the largest component of income dynamics followed by exchange mobility. [ABSTRACT FROM AUTHOR]

In this paper we examine the trajectory of regional income inequality dynamics for two neighboring national systems. Using data on 3038 US counties and 2418 Mexico municipios, from 2000, 2005, and 2010, we employ recent extensions of spatial Markov chains and space-time mobility measures, to consider the following questions: Are regional inequality dynamics fundamentally distinct between Mexico and the United States? Does the role of spatial context influence the distributional dynamics of the two systems? Finally we examine if there is a distinct international border region that displays inequality dynamics different from those of the internal regions of the two national systems. Strong evidence of spatial heterogeneity in regional income mobility is found between the two national systems, with Mexico having higher mobility relative to the US. The international border region is found to have distinct mobility dynamics from either national system, experiencing the strongest mobility. Extensive evidence of spatial contextual effects are found throughout the US-Mexican pooled data set indicating that a region's transitional dynamics are influenced by incomes of neighboring regions. [ABSTRACT FROM AUTHOR]