IMF Staff Country Reports

This Selected Issues Paper explores policy options to close gender gaps in Mexico. It analyzes policies to boost both female labor force participation and formal employment, looking at regional differences, showing how significant gains could be achieved, especially in rural areas. It also takes stock of fiscal policies with gender implications implemented so far and considers additional steps to address remaining gender inequalities. Finally, it analyzes legal impediments for women’s economic empowerment, focusing on labor market reforms. The analysis sheds light on the effects of such policies in rural and urban areas in Mexico. Findings indicate that childcare policies are indeed effective in increasing female labor force participation. However, childcare policies implemented in isolation could also lead to a rise in female labor informality, thereby hindering productivity growth. In order to fully realize the benefits of having more women in the labor force, the model recommends that childcare policies be complemented with other policies that foster the formal sector.