Mexico : Selected Issues.

Format:

Book

Government document

Author/Creator:

International Monetary Fund. Western Hemisphere Dept.

Series:

IMF Staff Country Reports; Country Report ; No. 2018/308

IMF Staff Country Reports

Language:

English

Physical Description:

1 online resource (34 pages)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2018.

Summary:

This Selected Issues paper on Mexico documents the composition, trends, and labor market implications of informality using data from the National Employment Survey (ENOE). Over half of the employed population has informal contractual relationships in Mexico both at formal and informal firms. Informality is found to be associated with lower levels of pay—even when accounting for worker composition differences—and lower wage growth over the life cycle. Policy drivers of this market duality, including minimum wage policy, are discussed. The results suggest that informality tends to select workers with lower earnings potential and limits their development. Informality indeed tends to be more prevalent among younger and less educated workers, for which better paid jobs are harder to come by. Moreover, it appears to lead workers toward a path of limited earnings and perhaps skill growth potential. Future labor market reforms should take a holistic approach that addresses both distributional concerns and formality barriers. One alternative is to reduce dependence on payroll taxes that are biased toward formal salaried workers while transitioning toward a social insurance system that provides good-quality services for all, irrespective of their salaried/nonsalaried status.

Contents:

Cover

CONTENTS

FORMALITY AND EQUITY-LABOR MARKET CHALLENGES IN MEXICO

A. Stylized Facts

B. Labor Market Implications of Informality

C. Regulatory Drivers of Informality

D. Minimum Wage Policy and Informality

E. Conclusions

References

CONSTRAINTS TO FIRM INVESTMENT AND GROWTH-A LIFE CYCLE ANALYSIS

A. Motivation

B. Methodology and Data

C. Descriptive Analysis

D. Econometric Analysis

FIGURES

1: Aggregate Life Cycle Dynamics Across Industries

2: Distribution of Life Cycles Across Industries

3: Median Manufacturing Life Cycle Growth by State

4: Life Cycles in the Transportation Sector

5: Life Cycles in Basic Metals Sector

6: Predicted Life Cycles Conditional on Regressors

TABLES

1. Stylized Example of Data Set

2. Regression Table

INEQUALITY AND SOCIAL POLICIES

A. Income Inequality in Mexico

B. The Role of Government Transfers

1. Inequality in Mexico and Regional and Income Peers

2. Recent Trends

3. "Between" and "Within" Inequality

4. Sources of Income Inequality

5. Redistributive Role of Transfers and Taxes

6. Public Social Spending in Mexico

7. Social Benefits

8. Gini Coefficient With and Without Government Transfers.

Notes:

Description based on publisher supplied metadata and other sources.

ISBN:

9781484383728

1484383729

9781484383742

1484383745

OCLC:

1076229239