Thursday, December 13, 2012

the true size of System D in Mexico

It's amazing what a change in methodology can do. In a new study, Mexico's National Institute of Statistics and Geography discovered that twice as many people were working in System D than it initially had thought.

Now, the agency estimates that 29.3 million people, or 60.1 percent of the country's workforce, is in System D. The previous estimate was 14.2 million.

How did the Institute come up with new figure? It suddenly realized that it could count "all people who are economically active but lack access to the social security system," La Prensa reports. That makes sense.

The newspaper also reports that the people in System D earn, on average, one-third less than workers in formal jobs. The article suggests that this is a difference in take-home pay, but it's hard to judge the comparison because the paper doesn't describe how the Institute measured income. It's true that System D workers often earn less, but most often they take home a larger share of their income than formal wage laborers.

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