Improving Access to Formal Employment

The Mexican labour market has recently performed relatively better than those of most other OECD countries. A number of policy initiatives have been taken that should further improve its performance. Nevertheless, there is still much scope for raising Mexico’s overall employment rate, in particular that of women and youth, while promoting greater formal employment and providing better social protection. Major reforms are needed for the labour market to contribute more effectively to higher living standards and inclusive growth. It will be important that the provisions of the new labour reform law governing the hiring and firing of permanent workers and the use of temporary contracts are enforced effectively. Further action could also be taken to strengthen training measures and, as envisaged in the Pact for Mexico, adjust and rationalise Mexico’s social security schemes to encourage formal employment.