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Informality in Mexico

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  • Nicola Brandt

    (OECD)

Abstract

Mexico has a relatively large informal sector by OECD standards. While this is in part a symptom of limited development and low productivity, it can also be to some extent its cause, as informal firms stay small to hide their activities and have limited access to productivity-enhancing government services, such a protection of property rights and training. A long-term and broad-based strategy with education at its core is needed for Mexico to reach its productivity potential and fight informality. Lowering the costs of formality, while enhancing its benefits and increasing the cost of non-compliance with labour and tax laws, will be an important part of this strategy. This would include more flexible labour laws, a further reduction in the business regulatory burden and a rethink of the social security package to enhance its attractiveness for low-wage workers and limit costs by making service provision more efficient. This Working Paper related to the 2011 OECD Economic Survey of Mexico. (www.oecd.org/eco/surveys/Mexico) L'économie informelle au Mexique Le secteur informel est relativement ample au Mexique par rapport à la situation observée généralement dans les pays de l’OCDE. Cette situation est en partie le symptôme d'un développement limité et d'une faible productivité, mais elle peut aussi dans une certaine mesure en être la cause, étant donné que les entreprises informelles restent petites pour dissimuler leurs activités et ne disposent que d'un accès limité aux services rendus par les administrations publiques qui sont sources de gains de productivité, tels que la protection des droits de propriété et la formation. Une stratégie globale à long terme, centrée sur l'éducation, est nécessaire pour que le Mexique puisse concrétiser son potentiel en matière de productivité et lutter contre l'économie informelle. Réduire les coûts de l'appartenance au secteur formel de l'économie, tout en renforçant les avantages qui en découlent et les coûts du non-respect du droit du travail et de la législation fiscale, constituera une composante importante de cette stratégie. Pour y parvenir, il faudra assouplir le droit du travail, alléger encore les obligations réglementaires des entreprises et repenser le système de sécurité sociale afin de le rendre plus attractif pour les travailleurs faiblement rémunérés et limiter les coûts, en améliorant l'efficience des prestations de services. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Mexique 2011 (www.oecd.org/eco/etudes/Mexique).

Suggested Citation

  • Nicola Brandt, 2011. "Informality in Mexico," OECD Economics Department Working Papers 896, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:896-en
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    File URL: http://dx.doi.org/10.1787/5kg3nzlp1vmq-en
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    References listed on IDEAS

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    1. Isabelle Joumard & Christophe André & Chantal Nicq, 2010. "Health Care Systems: Efficiency and Institutions," OECD Economics Department Working Papers 769, OECD Publishing.
    2. David Dranove, 2008. "Introduction to Code Red: An Economist Explains How to Revive the Healthcare System without Destroying It," Introductory Chapters,in: Code Red: An Economist Explains How to Revive the Healthcare System without Destroying It Princeton University Press.
    3. Unto Häkkinen & Isabelle Joumard, 2007. "Cross-Country Analysis of Efficiency in OECD Health Care Sectors: Options for Research," OECD Economics Department Working Papers 554, OECD Publishing.
    4. Isabelle Joumard & Christophe André & Chantal Nicq & Olivier Chatal, 2008. "Health Status Determinants: Lifestyle, Environment, Health Care Resources and Efficiency," OECD Economics Department Working Papers 627, OECD Publishing.
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    Cited by:

    1. Antonio Baez-Morales, 2015. "“Determinants of Micro Firm Informality in Mexican States 2008-2012”," AQR Working Papers 201509, University of Barcelona, Regional Quantitative Analysis Group, revised Apr 2015.

    More about this item

    Keywords

    informality; labour markets; marché du travail; social security; sécurité sociale; économie informelle;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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