Economic and social impact of labour formalisation in Mexico. Cuadernos de Economía

Abstract

In Mexico about 60 % of the working population is in informal employment, consequently, it is important to analyse the impact of this phenomenon on the product of the economy and the well-being of the population in light of labour formalisation. Accordingly, the Leontief model is extended to a social accounting matrix to determine this impact. As a result, it is found that the total output of the economy would increase by 17,58 %, although inequality still presents the same rates, it would improve the income of the population and poverty would decrease.