Introduction
As a country with a rapidly growing young population, Mexico is at a critical point where its economic potential meets significant social difficulties. Despite being ranked as the 11th biggest global economy, it faces the greatest level of income inequality among nations in the Organisation for Economic Co-operation and Development (OECD). Roughly 33% of its population belongs to the age group of 12-29, however, a worrisome proportion of two million youths are not involved in school or jobs. Although seeing a recent decline, the young unemployment rate remains a significant concern. This article examines the causes and outcomes of youth unemployment in Mexico, investigating its influence on society and suggesting ways to address the problem.
The Current Situation
An estimated one-third of Mexico’s population is in the age range of 12–29 years (Juárez et al. 2022). Based on GDP and purchasing power differential, it is the eleventh biggest economy in the world as of present-day (Wang et al. 2020). Meanwhile, among OECD (Organization for Economic Co-operation and Development) nations, Mexico has the most wealth disparity. According to the National Institute of Statistics, Geography, and Informatics (NISGI), there are almost two million teenagers (14–19 years old) who are neither in school nor employed (Wang et al. 2020). Thirteen percent of Mexico’s population falls under this category. Even though education is mandatory in the country up until the age of 15, the Mexican Institute of Youth (MIY) found that 16% of youths aged 15–19 and 6% of youths aged 12–14 are not in school, work, or professional training (NEET).
Moreover, according to a prediction by Statista.com (2022), in 2022, the young unemployment rate in Mexico had a decline of 1.5 percentage points, equivalent to a fall of 19.06 percent compared to the previous year (refer to Figure 1). Thus, in 2022, the young unemployment rate reached its lowest point within the examined timeframe (Statista. Com 2022). In this context, the term “youth unemployment rate” denotes the proportion of individuals between the ages of 15 and 24 who are currently unemployed but actively seeking employment.
Potential Causes of Youth Unemployment in Mexico
Jobseekers may struggle to find jobs for various reasons. For instance, there may be a shortage of firms wishing to hire them (Carranza and Mckenzie 2023). This may reflect a lack of overall labor demand in the economy, in which case the appropriate policy actions will be in the area of private sector development policy. Furthermore, even if jobs are available and individuals have the right skills, they may struggle to find and match with employers who want their labor, in which case job search assistance can be useful (Carranza and Mckenzie 2023). Data from the Mexican National Survey of Occupation and Employment (ENOE) provides one data point, asking unemployed individuals why they are not looking for work: 4.6 times as many individuals say it is because they think there are no jobs available near them than say it is because they lack the skills or experience needed for jobs (Carranza and Mckenzie 2023). Additionally, a survey of high school graduates in one part of Mexico with a strong labor market found that 33 percent of youth said lack of experience was their main obstacle to finding a job, 10 percent said lack of skills, and 14 percent said difficulty searching for jobs (Carranza and Mckenzie 2023). This shows that the lack of experience and knowledge of where to look for jobs may also be bigger barriers for young job seekers.
The Consequences of Youth Unemployment in Mexico
One of the consequences of youth unemployment in Mexico is evident in the context of violent crime, particularly in regions with large male youth cohorts and low education levels. According to a study by Juárez et al. (2022), high young unemployment in low-education stratum considerably helped to explain variation in violent crime rates between states, even if a rough assessment of regional youth bulges wasn’t directly linked to patterns of violent juvenile crime. Moreover, as highlighted by Caceres et al. (2021), the absence of formal employment opportunities in Mexico has led many young individuals to engage in illegal activities as an alternative (Caceres et al. 2021). The potential for political or criminal violence increases when there is a significant pool of young people who are unemployed, dissatisfied, and have low opportunity costs, and the labor market is unable to absorb this influx. There is also a concerning association between youth unemployment and self-employment, which, in turn, contributes to a higher homicide rate (Caceres et al. 2021). The intergenerational transmission of self-employment due to deficiencies in education and poverty perpetuates this cycle.
Role Of Businesses in Reducing Youth Unemployment and Promoting
Economic Growth In Mexico
Within Mexico’s dual education system, which works at both the upper intermediate and postsecondary levels, businesses play a crucial role in resolving young unemployment and encouraging economic growth (Vogelsang et al. 2022). Between the ages of 15 and 23, students at both universities and vocational institutions can participate in both classroom instruction and on-the-job training. During the first year of the three-year program at the higher intermediate level, students attend classes full-time. The second and third years of the program use a hybrid model, alternating between classroom instruction and work-based learning (Vogelsang et al. 2022), an approach that businesses adopt to boost job creation and labor market skill alignment. As argued by Juárez et al. (2022), increased levels of education among young individuals might potentially decrease the likelihood of political violence due to the greater opportunity cost of engaging in rebellion for those who are educated. Duе to thе oftеn supеrior financial prospеcts for еducatеd young individuals compared to thosе who arе unеducatеd, thеir opportunity cost is highеr, rеsulting in a dеcrеasеd likеlihood of bеing rеcruitеd by criminal groups.
Conclusion
Dеspitе its hugе еconomical potential, Mеxico has a rapidly growing youth population. This part of thе country’s population suffеrs from unеmploymеnt due to various reasons such as insufficient skills to match thе availablе labour markеt. Thеsе havе causеd thе risе in sеlf-еmploymеnt potеntially raising povеrty and lеading to incrеasе in crimе. To countеr this, businеssеs nееd to apply a multi-prongеd strategy. One potential solution is a dual еducation systеm that combinеs classroom instruction with work-basеd lеarning. Rеsеarch shows that rеducing thе likеlihood of violеncе among young pеoplе is associatеd with highеr lеvеls of еducation. Participation in such instructional programs by businеssеs might help provide possibilitiеs whilе dеcrеasing thе allurе of illеgal activity.
References
Caceres L R and Salvador E (2021) ‘Youth Unemployment in Mexico and Central America,’ International Journal of Economics and Finance, 13(10). https://www.researchgate.net/publication/354964976_Youth_Unemployment_in_Mexico_and_Central_America
Carranza E and Mckenzie D J (2023) ‘Job Training and Job Search Assistance Policies in Developing Countries.’ https://www.as-coa.org/sites/default/files/Mexico%20Country%20Report_Final.pdf
Juárez N C, Urdal H and Vadlamannati K C (2022) ‘The significance of age structure, education, and youth unemployment for explaining subnational variation in violent youth crime in Mexico,’ Conflict Management and Peace Science, 39(1), pp.49-73. https://journals.sagepub.com/doi/pdf/10.1177/0738894220946324
Statista. Com (2022). Mexico: Youth unemployment rate from 2003 to 2022. https://www.statista.com/statistics/812242/youth-unemployment-rate-in-mexico/
Vogelsang B, Röhrer N, Pilz M and Fuchs M (2022) ‘Actors and factors in the international transfer of dual training approaches: the coordination of vocational education and training in Mexico from a German perspective,’ International Journal of Training and Development, 26(4), pp.646-663. https://onlinelibrary.wiley.com/doi/full/10.1111/ijtd.12279
Wang M C, Lin F L, Su H H and Kuo P L (2020) ‘Revisiting the relationship between suicide and unemployment in Mexico: Evidence from linear and non-linear co-integration,’ Frontiers in public health, 8, p.60. https://www.frontiersin.org/articles/10.3389/fpubh.2020.00060/full
Appendix
Appendix 1
Figure 1: Mexican Youth Employment Rate from 20003 to 2022
Source: (Statista.Com 2022).
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