The impact of the demographic bonus in the pension systems of social security

The impact of the demographic bonus in the pension systems of social security


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Speaker(s): Daniela Alejandra Gonzalez Ramirez (National University of Mexico), Carlos Contreras Cruz (National University of Mexico)

Nowadays Mexico faces one of the biggest demographic challenges in its history: the population ageing. This phenomenon will bring with it many challenges of various kinds, including those concerning to pension systems in Social Security, however, during this process Mexico has presented a phenomenon known as the demographic bonus (also known as the demographic dividend), which has as its main characteristic the decrease of the dependency ratio as a consequence of the constant increase in the proportion of working age population.

Actually the situation of the old-age population, is not the most favorable and coverage offered by social security systems is not enough, so one of the main concerns, will be to cover the growing demand for old-age pensions. It has been said in various readings that the demographic bonus can boost the productive potential of the country and can be used to improve the situation in different areas, one of these the Social Security, in particular in the financing of the retirement pensions so, the aim of this investigation is to analyze under what circumstances this would be possible, considering the conditions of unemployment and informal employment, and finally, to conclude if it is possible to take advantage of this phenomenon for the benefit of the pensions under the Pay As you Go system.

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