Abstract
The main element in the Demographic Dividends (DemDiv) is a demographic surplus of working-age population with high levels of employment and productivity, to support children and the elderly and also allowing a significant aggregate savings to be invested to enhance future economic opportunities. This chapter depicts the life-cycle income, consumption, and saving patterns of Mexican households in a context of increasing workforce and a declining ratio of demographic dependency. Since the life-cycle is a longitudinal concept and data comes from cross-sectional panels of the 1994–2012 Household Income and Expenditure Survey, 11 synthetic cohorts are drawn up. Results show that the expected dissaving-saving-dissaving hump shape does not occur. The process rather follows an M shape. Private saving understood as income less consumption is very low suggesting that the first DemDiv is not taking place and that the demographic window is being wasted.
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Notes
- 1.
Youth dependency ratio plus old age dependency ratio.
- 2.
Transfers were not included as part of the current income, for example, pensions. While it is true that pensions are an income for individuals, the effect of these saving is contradictory with the macroeconomic studies, which are usually disregarded (Butelmann and Gallego 2000).
- 3.
Data on aggregated savings is not compatible with the national accounting data. It is better to use original data by introducing a coefficient of adjustment. Estimates may not robust enough, from of arbitrary elements introduced at the time of the correction (Székely 1998).
- 4.
Corresponding to the variables age, cohort and period columns would result in an accurate linear combination with a constant leading to the determinant of the matrix X′X equal to zero, therefore singular (not switchable) would not allow to estimate the coefficients of the regression model.
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Acknowledgments
This document was supported by a grant from the CONACYT/INEGI 186319 (Project: Prospectivas sociales, económicas y de salud por cohortes de la población) and the IIEc, UNAM (Project: Cambio en la estructura por edades, ahorro y seguridad social).
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Nava-Bolaños, I., Ham-Chande, R. (2016). Demographic Dividends and Households Saving in Mexico. In: Pace, R., Ham-Chande, R. (eds) Demographic Dividends: Emerging Challenges and Policy Implications. Demographic Transformation and Socio-Economic Development, vol 6. Springer, Cham. https://doi.org/10.1007/978-3-319-32709-9_3
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