01.04.01. Social protection schemes | Mexico
01.04.01. Social protection schemes | Mexico
11 Jul 2022
Brief Overview of social protection schemes implemented by the government
As in most countries in Latin America, social policies, also referred to as social protection or social assistance programmes in Mexico, have been designed as mechanisms to address poverty and among these, non-contributory pensions, and conditional cash transfers (CCT) represent the largest programs now in place. Some programs have aimed at universalisation combining a mix of contributory benefits with cash transfers for poor families, targeting older people and children but also having an indirect impact on reducing gender, race, and urban/rural gaps (Fleury, 2017).
In Mexico, the main CCT program is called Prospera (formerly known as Progresa). The programme was created in 1997 to support human development. It is based on target groups, such as young children, women, older adults, and is means-tested by poverty and size of locality. Another large social protection initiative was the establishment of a fully publicly financed health insurance in 2004, the Seguro Popular. The programme was created as an effort to increase health insurance coverage among those not covered by social security institutions (see details in Part 2). The third largest social protection scheme currently in place is the Universal Pension, introduced in 2014. The Universal Pension programme is an age-based non-contributory pension for older adults, who do not receive a contributory pension from a social security institution. In 2019, reforms to the program established a bi-monthly payment of $2,500 Mexican pesos, equivalent to $130 USD, for individuals 65 years and older in rural areas and those 68 years old in urban areas. Currently, older adults in Mexico rely mostly on state or federal non-contributory pension benefits, which are significantly smaller than social security benefits (Aguila et al., 2011).
On the other hand, social security, and comprehensive benefits such as maternity leave, day-care centres for pre-school aged children, disability and old age pensions and health care are funded through a three-party mechanism where the formal employee, employer, and the government contribute. These are only available for those employed in the formal market. This includes private sector workers and the self-employed. Similarly, three-party mechanisms are in place for federal and state level public servants as well as state companies such as the oil company PEMEX (Angel et al., 2017). It is estimated that only one-half of those employed, work in the formal sector, leaving a large proportion of the population, particularly older adults, unprotected and not receiving any social security benefits (Bravo et al., 2015).
While the implementation of these schemes in Latin America has in a way improved social inclusion and contributed to poverty reduction, experts have noted how universal coverage in fragmented systems does not equal a universal welfare state that entitles rights. They note that it is distinct from rights-based policies and may preserve stratification, paternalism, discretionary selections, and insecurity (Fleury, 2017).
Brief overview of social protection schemes implemented by development partners or international donors.
Currently there are no schemes or programs implemented by international development partners, but there has been active participation by some organisations in fundamental public social protection and development programmes through technical and financial advice as well as different lending mechanisms. For example, the World Bank has provided important support for different social protection programs including the original Education and the Health and Nutrition program PROGRESA, now called PROSPERA. The World Bank supports a total of 18 active projects in Mexico (Banco Mundial, 2019).
 NB: Social protection schemes can include: direct welfare programmes (conditional and unconditional cash transfers, disability grants, old-age grants, dependency grants, school feeding programmes, food aid, state pensions), which may or may not focus on targeting vulnerable groups.
Aguila, E., Diaz, C., Fu, M. M., Kapteyn, A., & Pierson, A. (2011). Living Longer in Mexico. https://www.rand.org/pubs/monographs/MG1179.html
Angel, J., Vega, W., López-Ortega, M. (2017). Aging in Mexico: Population Trends and Emerging Issues, The Gerontologist, Volume 57, (2), 153–162, https://doi.org/10.1093/geront/gnw136
Banco Mundial. (2019). México: proyectos.
Bravo J. Lai N. M. S. Donehower G. , & Mejia-Guevara I. (2015). Ageing and retirement security: United States of America and Mexico. In W. E.Vega K. S.Markides J. L.Angel, & F. M.Torres Gil (Eds.), Challenges of Latino aging in the Americas (pp. 77–89). New York, NY: Springer Science.