Source: Foundation for Economic Education
by Sergio Martínez
“Like many countries with an aging population, Mexico is facing a pension crisis. In just the last five years, the universal pension for older adults quadrupled its budget. Coupled with low growth, the ever-rising cash transfers and subsidies have become a major drag on the country’s economy. Welfare payments to individuals—such as the universal pension for older adults, disability pensions, and student stipends—have grown at a pace that outstripped investment in infrastructure, education, and security. These programs are politically attractive: beneficiaries can clearly see where the money goes, while the returns of better public infrastructure, or of a more effective police force, are harder to measure. The result is a fiscal structure that privileges visible redistribution over the less glamorous but essential foundations of long-term growth.” (09/05/25)