Employment, structural adjustment and sustainable growth in Mexico

The impact of slow growth since the early 1980s on the Mexican labour marke t is analysed by comparing Mexico's employment performance to that of other OECD countries ies through three different components, that is, the labour force participation ratio, occupational structure and output per worker. T he 'old' employment components of Mexico's development problem - low partic ipation ratios and a high employment share of agriculture have remained, to which is added a new employment problem in the form of a massive increase irt underemployment in the tertiary sectors of the economy driving down wag es for a large part of the population. This article mises two sets of quest ions. First, given the current employment problems and the prospective expa nsion of rile labour force, what are output and employment growth rates, an d the related pattern of structural change, required to prevent a worsening of underemployment and income distribution? Second, given Mexico's debt pr oblems since the early 1980s, what is the output growth rate that,I would m ake the path of the debt-output ratio sustainable over time? And how do the se grow th prospects compare to the investment and external finance require ments associated to a socially necessary growth rate?