Elevator pitch
While Mexico has improved the education of its labor force, maintained a stable macroeconomic environment, and been friendly to international trade, its labor market still faces many challenges. In particular, Mexico has difficulty creating high-paying jobs: the share of informal employment has remained stagnant for the last 20 years, and, by 2025, remains above 50%. These problems are particularly poignant in southern Mexico.
Key findings
Pros
Mexico’s labor market has a low unemployment rate.
Wage inequality has decreased substantially.
The education of the labor force increased in the last two decades.
International trade with the US sustains manufacturing labor demand.
Proximity to the US provides migration opportunities.
Cons
Mexico is the second country with the most working hours per year in the OECD.
The country has a large informal sector, where wages and productivity are low.
Gender wage gaps persist, and the labor force participation rate of women remains low.
Some regions of Mexico continue to lag in income and development indicators.
