The NAIRU and Informality in the Mexican Labour Market

Venue :Online Seminars
Host Name :The SEACEN Centre
Date From :21 Jun 2022
Date To :21 Jun 2022


Speakers: Ana Aguilar, Carlo Alcaraz (Presenter), Claudia Ramírez and Cid Alonso Rodríguez-Pérez 

Time: 21 June 2022, 10 AM MYT 

Synopsis: Reading the economic cycle is essential to implementing monetary policy.  A key topic is whether employment is approaching its potential: the unemployment rate at which inflation remains constant in the absence of supply shocks (NAIRU).  In Mexico and other Latin American countries, the sizeable number of informal workers makes it challenging to estimate the NAIRU.   Mexico does not have unemployment insurance, workers who become unemployed immediately need to find a new job.  The informal sector's flexibility allows it to absorb most of the people who cannot find a job in the formal labour market.  As a result, the unemployment rate in Mexico is low and does not fully reflect labour market slack.