In 2013 the Mexican government embarked on a major reform agenda which, if fully implemented and pushed forward, will help Mexico break out from a recent history of economic stagnation and high levels of poverty and inequality that has hampered the quality of life of its citizens. Indeed, compared with other OECD countries, Mexico performs poorly in indicators that are essential to a good life, often resulting in traps that hinder growth and well-being. The government has introduced major structural reforms to fight poverty, improve the quality of education, create more jobs in the formal sector and move towards a universal social security system. This is a substantial accomplishment. However, Mexico needs to build a more inclusive state. This implies raising more tax revenue (without necessarily increasing tax rates) to expand social protection. It also means promoting an inclusive labour market to reduce informality and increase female labour market participation; inclusive schools to reduce educational gaps; inclusive health systems so that health care quality no longer depends on employment status; and inclusive cities to reduce geographical segregation. This Working Paper relates to the 2015 OECD Economic Survey of Mexico (www.oecd.org/eco/surveys/economic-survey-mexico.htm).
