National Transfer Accounts in Mexico

Transcription

1 National Transfer Accounts in Mexico Policy implications: labor market Iván Mejía Guevara Stanford University 12th Global Meeting of the NTA Network, Mexico City, July 23-27, 2018

2 1. National Transfer Accounts (NTA)

3 Background Mexico is an NTA member since National Population Council (CONAPO): Lic. Patricia Chemor Latin American and Caribbean Demographic Centre (CELADE-CEPAL): Dr. Paulo Saad CEDA (Dr. Ronald Lee), East-West Center (Dr. Andrew Mason), IDRC, UC-Mexus Conacyt

4 Data National Income and Expenditure Surveys (ENIGH-INEGI) System of National Accounts (SCNM INEGI) Administrative records (Cuenta Pública SHCP)

5 Three main components of NTA 1. Life-cycle deficit (labor income and consumption) 2. Net transfers (public and private) 3. Asset-based reallocations (asset income and savings)

6 Average Labor Income by Age 160,000 Mexico ,000 80,000 Mexican Pesos 40,000 0 Labor income ,000-80,000 Compensation of Employees Self-employment labor income -120,000 Age

7 Average Labor Income and Consumption 160,000 Mexico ,000 Consumption 80,000 Mexican Pesos 40,000 0 Labor income ,000-80,000 Private and public consumption: Education Health Other -120,000 Age

8 Economic Life-cycle Deficit 160,000 Mexico ,000 Consumption Mexican Pesos 80,000 40, ,000 Deficit Labor income Surplus -80, ,000 Age

9 Economic Life-cycle Deficit Mexico , ,000 Consumption 80,000 Deficit Labor income Mexican Pesos 40, ,000-80, Surplus Other sources, other than labor income, are needed to finance the deficit of young and elderly. -120,000 Age

10 Economic Life-cycle Deficit 160,000 Mexico ,000 Mexican Pesos 80,000 40,000 0 Life-cycle deficit ,000-80,000 Net private transfers: Inter-household transfers Intra-household transfers Remittances Net private transfers -120,000 Age

11 Economic Life-cycle Deficit 160,000 Mexico ,000 Mexican Pesos 80,000 40,000 0 Life-cycle deficit ,000-80,000 Net public transfers: Taxes (ISR, IVA, IEPS) Social security contributions Cash transfers (Próspera, etc.) Net public transfers Net private transfers -120,000 Age

12 Economic Life-cycle Deficit 160,000 Mexico ,000 Mexican Pesos 80,000 40,000 0 Life-cycle deficit ,000-80, ,000 Age Net total transfers

13 Economic Life-cycle Deficit 160,000 Mexico ,000 80,000 Life-cycle deficit Asset-based reallocations Mexican Pesos 40, ,000-80, ,000 ABRs Asset income (private, public - PEMEX) Saving (private, public) Age Net total transfers

14 2. Policy Implications: Labor market

15 Sustainable Development Goals (Goal 8) Promote inclusive and sustainable economic growth, employment and decent work for all

16 Labor Income and Consumption Mexico 2014 Relative to average labor income (15-49)

17 Labor Income and Consumption Mexico 2014 Relative to average labor income (15-49) Lower-middle- income countries

18 70% 60% 50% 40% Compensation of Employees relative to GDP OECD* % 40% 64% 30% 27% 20% 10% 0% Mexico India Chile Greece Poland Slovak Republic Ireland Italy China Czech Republic Korea Norway Australia Japan Estonia Luxemburg Hungary Spain Austria European Union Belgium Germany Netherlands Portugal United States Finland France Iceland Slovenia Sweden United Kingdom Switzerland Denmark Source: Samaniego, 2014 with data from OECD.Stat

19 Compensation of Employees relative to GDP OECD* % 60% Compensation of employees = 27% 2/3 Mixed Income = 15% 53% 64% 50% 40% 30% 20% 10% 0% 42% 40% Source: Samaniego, 2014 with data from OECD.Stat Mexico India Chile Greece Poland Slovak Republic Ireland Italy China Czech Republic Korea Norway Australia Japan Estonia Luxemburg Hungary Spain Austria European Union Belgium Germany Netherlands Portugal United States Finland France Iceland Slovenia Sweden United Kingdom Switzerland Denmark

20 Compensation of Employees relative to GDP 45% Mexico % 35% 30% 25% 20% 15% Source: Samaniego, 2014 with data from OECD.Stat %

21 1.4 Labor income and consumption over time 1.2 Relative to average consumption Source: Mejía-Guevara (2014).

22 1.4 Labor income and consumption over time 1.2 Relative to average consumption Source: Mejía-Guevara (2014).

23 1.4 Labor income and consumption over time Relative to average consumption Source: Mejía-Guevara (2014).

24 1.4 Labor income and consumption over time Relative to average consumption Source: Mejía-Guevara (2014).

25 Compensation of employees relative to GDP 45% Mexico % 35% 30% Economic crisis: 1982 Economic crisis: Economic recession: 2001 Financial crisis: % 20% 15% Source: Samaniego, 2014 with data from OECD.Stat Low economic growth, structural change, and globalization

26 Compensation of employees relative to GDP 45% Mexico % 35% 30% 25% 20% 15% Source: Samaniego, 2014 with data from OECD.Stat Economic crisis: 1982 Economic crisis: Economic recession: 2001 Financial crisis: 2009 Abrupt decline in real wages that never recover the levels before

27 Compensation of employees relative to GDP 45% Mexico % 35% 30% 25% 20% 15% Source: Samaniego, 2014 with data from OECD.Stat Economic crisis: 1982 Economic crisis: Economic recession: 2001 Financial crisis: 2009 Consistent decline in formal employment

28 Informal employment / total employment 2013 In 2013, the informal sector is the main source of employment. Source: OIT 2014 with information from INEGI

29 120,000 Regional differences in Labor Income (and consumption?) 100,000 80,000 Substantive impact in the age allocation of income across regions 60,000 40,000 20, Chiapas Estado de México Nacional

30 Labor market is under constant pressure Significant increase in the size of the informal sector Young people looking for better opportunities (abroad, violence) Stagnant productivity and unemployment Important increase in the number of young people who neither study nor work

31 Policy challenges New policies oriented to attract workers and business into the formal economy Strengthening of productive investment in areas of higher value-added sectors Educational expansion Insertion in the global economy that generates growth and redistribution at the same time

32 3. Additional considerations: Inequalities

33 SDG 5: Achieve gender equality and empower all women and girls Mexico ,000 Men 150,000 Mexican Pesos 100,000 All Women 50, Age

34 400,000 SDG 10: Reduce inequality among and within countries Mexico , ,000 Post-secondary Mexican pesos 250, , ,000 All levels 100,000 Less than primary 50, Age

35 Thank you