Economic life cycle and intergenerational redistribution: Mexico, 2004

Iván Mejía-Guevara, Consejo Nacional de Población

This chapter discusses the construction of the economic lifecycle deficit for Mexico and analyzes the Mexican system of transfers and asset reallocation. The National Transfer Accounts methodology and data from 2004 were used to generate the estimations. The magnitude of the lifecycle deficit and intergenerational redistribution are analyzed by age group. Net transfers constitute the most important means of addressing the deficit among young people, whereas asset-based reallocations are the main mechanism for overcoming the deficit among the elderly. In fact, the deficit in old age can be overcome only via asset-based reallocations, since the positive support of public transfers is nullified by the negative effect of private transfers from the elderly to younger population. The chapter also examines the role of oil revenues within the intergenerational framework.