OECD Employment Outlook 2025: Mexico
Table of contents
These country notes provide an overview of the labour market situation in each country based on data from OECD Employment Outlook 2025. This edition has a special focus on how population and workforce ageing will affect the labour market and workers’ jobs.
The OECD unemployment rate remains at 4.9% in May 2025 – the same as one year ago. However, there are signs of weakening, with employment growth decelerating and labour market tightness falling back to pre‑COVID‑19 levels in many countries.
Mexico’s unemployment rate stood at 2.8% in May 2025 (see figure below), remaining among the lowest across the OECD and continuing the steady downward trend of the past four years. The labour force participation rate was 65.4% in Q1 2025, broadly unchanged from the previous period. Women’s participation was 51.2%, slightly down from 51.7% in Q1 2024. Although the gender participation gap narrowed by 0.6 percentage points since Q1 2024, at 30.1% it remains as one of the largest gaps across the OECD. Although unemployment is low, informality remains widespread, with more than half of workers employed outside the formal sector.
Economic growth in Mexico is expected to slow down, with forecasts pointing to a 0.4% expansion in 2025 as the country faces economic uncertainty from the trade tensions. Inflation is projected to decline from 4.7% in 2024 to 3.4% in 2025, and, together with low unemployment, is expected to support household consumption and help maintain labour market stability.
In December 2024, Mexico reformed its Federal Labor Law to recognise digital platform workers as employees, granting them labour rights, access to social security, and regulated working conditions. The law obliges platforms to provide benefits and protections, prohibits misclassification, and establishes greater transparency in algorithm management. This reform has the potential to reduce labour informality by bringing thousands of platform workers into the formal sector and extending legal protections to a previously unregulated workforce.
Real wages are growing in virtually all OECD countries, but in half of them, they are still below the levels of early 2021 – just before the inflation surge that followed the pandemic.
Real wage growth has remained positive in Mexico, with real wages rising by 1.5% year-on-year in Q4 2024 and showing a cumulative increase of 1.7% since the first quarter of 2021.
Minimum wage increases have been exceptionally high in Mexico over the last few years. Between January 2021 and January 2025, the real minimum wage increased by 56.7%, the highest increase among OECD countries, and significantly above the 8.8% OECD average. These substantial increases are the result of the annual minimum wage adjustments agreed by Mexico’s National Minimum Wage Commission (CONASAMI), which introduced the Independent Recovery Amount (MIR) in 2017 to specifically restore minimum wages’ purchasing power. The latest nominal increase of 12% was implemented on 1 January 2025.
People around the world are living longer and healthier lives than ever before. This remarkable achievement has been accompanied by declining fertility, leading to significant demographic shifts. The number of old-age people per working-age person will rise by 67% by 2060 across the OECD. The share of people employed in the population will fall unless policies change, slowing down annual GDP per capita growth by 0.4 percentage points.
In Mexico, contrary to the large majority of OECD countries, employment-to-population ratio is forecasted to rise by 2.75 percentage points, the highest increase among OECD countries (see figure below). This exceptional trend reflects both, Mexico’s relatively broad-based age pyramid, as fertility rates were above replacement levels until 2015; and a strong cohort replacement effect, as younger generations entering the workforce have higher labour market participation rates than the older cohorts.
Over the same period, Mexico’s old-age dependency ratio is projected to increase from 0.14 in 2023 to 0.36 in 2060, but still, remaining well below the OECD average over the forecasted period (from 0.31 to 0.53). Moreover, the dependency ratio is among the lowest across OECD countries with only Israel having a lower predicted ratio for 2060.
Getting more jobs for older workers and promoting gender equality at work could stabilise employment-to-population ratios in most OECD countries. However, GDP per capita growth will still slow in many countries. Only by boosting productivity growth can countries maintain a growth level close to past levels.
Without policy change, Mexico’s GDP per capita growth is projected to drop sharply – from 0.67% per year during 2006‑19 to just 0.05% annually over 2024‑60. This low growth is not only due to demographic trends, but also reflects historically weak productivity growth. Mexico’s GDP per worker actually declined slightly over 2006‑19, compared to moderate gains across most OECD countries.
With a gender employment gap of almost 30 percentage points, Mexico’s largest untapped labour resource lies in increasing the employment of working-age women. Additionally, activating older workers also presents an opportunity, as the participation rate among 55‑59 year‑olds (64.9%) remains 8.1 percentage points below the OECD average.
By mobilising these untapped labour resources – particularly by closing two‑thirds of the gender employment gap and further activating older workers – Mexico could raise GDP per capita annual growth to 0.41%. This increase would bring growth closer to half of the 1.04% average annual GDP per capita growth experienced in the OECD between 2006 and 2019. Mexico may increase economic growth beyond this benchmark – to 1.55% – if, in addition, productivity growth reaches half of the 1991‑2000 OECD cross-country median.
Employment of both men and women drops sharply after age 60 in most countries. Promoting lifelong learning, healthy workplaces, flexible retirement, and inclusive employer practices is essential to boost older workers’ employability and extend working lives.
In Mexico, employment rates among older workers have increased steadily over the past two decades (2000‑23), rising by 8 percentage points for those aged 55‑59 and by 2.2 percentage points for ages 60‑64. The employment rate for individuals aged 60‑64 in Mexico, stood at 47.8% in 2023, below the OECD average of 55.9%, while the employment rate for those aged 65‑69 was 35.3%, about 5 percentage points higher than the OECD average (see figure below). This counter pattern is partly explained by the fact that formal workers can retire early, from age 60, if they become unemployed.
Differences in labour market participation persist between socio-demographic groups, particularly among older workers. While gender gaps among older workers have narrowed across the OECD since 2000, they remain substantial in Mexico. In 2023, the employment gap between men and women aged 55‑64 was 35.8 percentage points, significantly larger than the OECD average of 13.5 percentage points.
With a labour force participation among workers aged 45‑65 below the OECD average, there is a possibility to extend working lives by increasing employment rates among this group. At the same, Mexico is one of the few OECD countries where workers, on average, retire slightly later than the official retirement as women retire 0.6 years and men nearly two years after the statutory age. This may partly reflect limited pension entitlements among informal workers, who often need to continue working to supplement existing benefits.
Contact
Valentina CONTRERAS (✉ valentina.contreras@oecd.org)
Stéphane CARCILLO (✉ stephane.carcillo@oecd.org)
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The full book is available in English: OECD (2025), OECD Employment Outlook 2025: Can We Get Through the Demographic Crunch?, OECD Publishing, Paris, https://doi.org/10.1787/194a947b-en.
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