Navigating Mexico: The Challenges and Opportunities of an Aging Population
By JUAN DE JESÚS BRENNE
Mexico is currently undergoing a significant demographic shift as its population continues to age at an unprecedented rate. This demographic trend brings both challenges and opportunities for the country impacting various aspects of society, including healthcare, the labor market and social welfare systems.
According to the latest data, Mexico’s population over the age of 60 is rapidly increasing
In 2021, this age group accounted for 11 percent of the total population. It is now projected to reach 30 percent by the year 2050.
Furthermore, the average life expectancy in Mexico is steadily rising, from 73 years in 2000 to 77 years in 2020. This trend can be attributed to advancements in healthcare, improved living conditions and changes in lifestyle.
The implications of Mexico’s aging population are far-reaching, with healthcare services being one of the most pressing concerns.
As a larger proportion of the population requires extensive medical attention, the demand for specialized geriatric care, chronic disease management and palliative care is expected to significantly increase.
Ensuring the adequacy of these services should be a top priority for the Mexican government and healthcare sector.
Additionally, the labor market is likely to face significant challenges due to an aging workforce. As the productive age group shrinks, there may be a shortage of skilled workers, potentially hampering economic growth.
To address this issue, Mexico has already slightly increased the retirement age, with full retirement set at 65 years and a discounted retirement age at 60 years.
However, only 40 percent of Mexico’s workforce is formally registered in social welfare programs, leaving a vast majority of the population unprotected for retirement.
During the administration of former Mexican President Vicente Fox, a law was introduced to provide financial assistance to citizens beginning at the age of 70. The age has slowly been lowered to 65, with an annual amount increased to 4,800 pesos, with a scheduled increased to 6,000 pesos in 2024.
With a presidential election coming up, both candidates are likely to promise further improvements in retirement pensions, either by lowering the retirement age or increasing the amount. However, economists predict that meeting the planned rate of 6,000 pesos a year may not be feasible due to budget constraints.
To mitigate these potential issues, policies that promote workplace inclusivity and support for older workers will be crucial.
Mexico’s social welfare systems also need to adapt to accommodate the changing demographics. Pensions, healthcare and social security schemes will face increasing pressure as the number of retirees rises.
Ensuring the sustainability of these programs while providing adequate support for older citizens is essential for social cohesion and equal access to resources across all generations.
Amid all these challenges lie opportunities for Mexico.
The older population has valuable skills and experience acquired over the years, which can be leveraged to contribute to society.
Encouraging active aging and implementing programs that facilitate the engagement of older adults in volunteer work, mentoring or entrepreneurship can benefit society as a whole.
Seniors are a godsend for most families as in-home childcare providers.
Moreover, the growing demand for healthcare services and products presents an opportunity for economic growth in sectors such as pharmaceuticals, medical technology and elderly care facilities.
Investing in research and innovation targeted at the needs of the aging population can generate job opportunities and enhance Mexico’s position in the global healthcare market.
While the upcoming election themes will likely center on crime and economic health, the real elephant in the room, which neither candidate will likely want to touch, is what to do with an aging population, many with chronic illnesses.
Addressing this issue and finding sustainable solutions will be paramount for Mexico’s long-term development and wellbeing.