Mexico | Informality, the great absentee in public policy

Summary

Mexico faces significant structural economic challenges, with informality standing out as one of the most complex to address. Although there have been efforts to understand and analyze informality from various perspectives, these efforts have little impact as they remain outside the debate and action of public policy.

Key points

• Key points:
• Significant advances have been made in defining informality, aligning with international standards to improve the understanding of key concepts such as the informal sector, labor informality, and the informal economy.
• The 2019 Economic Census data shows that 62.6% of economic units were informal, contributing only 3% of the total value added.
• The labor informality rate has averaged 57.6% since 2005, with a slight decrease to 54.5% in the early months of 2024. These levels are higher than those in countries like Brazil and Chile.
• Informal workers lack labor benefits and earn lower incomes compared to formal employment.
• Addressing informality is crucial for reducing inequalities and improving productivity. Thus, it needs to be prioritized to achieve sustainable growth.

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