• The American University Latin America blog can be read here. The views expressed are the author's own.
Mexico appears to be squandering a historic opportunity to take advantage of the “demographic bonus” represented by its surge in working-age citizens.
The Mexican government estimates that about 32 percent of the Mexican population today is between the ages of 12 and 29 years. During this demographic bonus, a disproportionate percentage of the population enters the workforce – compared to those who are retired or nearing retirement – and drives economic growth. Workers passing through this demographic window of opportunity are supposed to generate wealth that will help support a soon-to-be-aging population.
These opportunities don’t come around twice: age profiles in developing countries change quickly, and societies need to make the most of those few years during which the economically active population far surpasses that of the economically dependent. The portrayal of Mexico as a young country in the media and the adoption of labor reforms in 2012 brought an initial optimism about its ability to take advantage of this bonus, but the current state of affairs casts a shadow over the potential of its young population.
According to a new report from the Organization for Economic Cooperation and Development (OECD), Education at a Glance 2014 Report, 22 percent of people between 15 and 29 years old in Mexico are neither employed nor in education or training. These “ni-ni’s” represent a demographic bust because of a lack of jobs.
The lack of employment also influences young Mexicans’ attitudes toward education. According to the OECD, even high educational attainment is not a guarantee of employment in Mexico. A 2012 report by the McKinsey Center for Government found that only half of educated young people in Mexico believe that their post-secondary education has improved their job prospects. According to a National Survey of High School Dropouts in 2012, moreover, many young men leave high school to contribute to their households’ finances, and young women quit to take on family responsibilities related to marriage and pregnancy. Once out of school, they have no option but to participate in low productivity niches of the informal economy – severely reducing the benefits that their entry into the labor market could bring to the national economy.
The fate of young people has profound implications for Mexico’s economic future. Without a comprehensive plan to expand employment opportunities and access to higher education that enables youth to flourish and lead Mexico into a new stage of development, Mexico will find itself a generation from now with the demographic profile of a developed country – with an aging population producing less but needing more care – but with a middle-income level of wealth. Budgets will be stretched, and social tensions could be great. Many of the most capable young people will leave the country for better opportunities.
Young Mexicans appreciate what’s at stake and are using the tools at their disposal to make their voices heard. Lately, student movements have attracted international attention using social media, but it’s far from clear whether the Mexican government and political, economic, and social elites are listening and have the vision necessary to avoid a crisis.