Proceedings of the 15th International Conference on Management, Economics and Humanities
Year: 2024
DOI:
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The Cost of Pensions: An Analysis of Financial Unsustainability in Mexico
Daysi Dayana Reyes Luna
ABSTRACT:
Objective: The objective of this research is to analyze the impact of the increase in public pension expenditure in Mexico on the country’s economic and social stability. To propose viable recommendations and solutions to address this problem and ensure the long-term viability and equity of the pension system, including effective reform and financial management measures. Methodology: A multiple linear regression model was employed, incorporating explanatory variables such as GDP, tax revenue, and the social welfare index. This approach allowed for the evaluation of the impact of pension expenditure on various economic and social factors. Dates: The dataset is annualized and covers the period from 1994 to 2024. It was obtained from reliable sources such as the National Institute of Statistics and Geography (INEGI), the Ministry of Finance and Public Credit (SHCP), and the National Council for the Evaluation of Social Development Policy (CONEVAL). Results: The country’s economic growth is affected by the disproportion between pension spending and tax revenue. While the social development index is favored by this spending, in the long term it generates negative effects that must be neutralized. In this context, the question arises: What is the optimal level of pension spending in relation to GDP and the well-being index?
keywords: Pension Expenditure, Financial Unsustainability, GDP, Social Development Index, Tax Revenues