Mexico's dual labour market hinders development

Significance

However, the country has a dual labour market with an informal sector in which millions of Mexicans work, without written contracts, guarantees to basic rights or social security provision.

Impacts

• Increased economic growth would bring about more jobs and higher incomes but probably would not reduce informality.
• The universal pensions scheme established under AMLO will encourage businesses to keep activities informal.
• Informality will perpetuate Mexico’s low levels of productivity.
• AMLO may pursue further legal changes that have a negative impact on formal businesses before the end of his term.