(Excerpted from a larger research paper on the high school dropout rate in Mexico City)
Mexico is currently experiencing a “demographic bonus.” From 1990 to 2010, the median age rose from 19 to 26 years, and currently the largest five-year block of the demographic pyramid is the one with population between 15- and 20-years old. From 2000 to 2030, a fast-paced annual growth rate of the economically active population will increase the labor supply from 42 to 64 million people before it starts declining again.
However, there are reasons to believe that this bonus may quickly transition to a demographic burden. If we do not invest in human capital formation today, in a few years Mexico will have a large low-skilled, low-productivity adult population and, in a few decades, an aging population with a high dependency rate. Relative to its level of economic development, Mexico has already a two-year education deficit (López-Acevedo 2001, 21), which may inhibit further advancement and income inequality alleviation.
Source: estimates based on INEGI, 2010. Censo de Población y Vivienda, 2010
Even though by 2010 Mexico City had the lowest share of inactive young population, it is also the state with the slowest improvement rate from 1990 to 2010. During this period, the country cut its inactive population by almost a third, while the city’s rate declined only by 18.4%.
Although there is a clear trend showing that a smaller share of young people is falling into inactivity, the aforementioned demographic composition of the country makes this situation more critical during the present years. Recently, a new law was passed to extend mandatory education up to the completion of high school (Cámara de Diputados, LXI Legislatura 2011), when young people are about 17-18 years old. This level is at the high end of the OCDE average; however, it is unlikely that the mandate will suffice to substantially increase the average education level in the country.
 The largest decennial group is the 15-24 year range: 21.5 million.
 Around 2030 the rate will increase to over 60 dependents per each 100 working-age persons, and it is likely to reach 80 by 2050 (Consejo Nacional de Población 2005).
 “Ni estudian ni trabajan” (Not in school or in work)–equivalent to the NEET population in UK.
 All estimates based on INEGI, 2010. Censo de Población y Vivienda 2010. See annex 3 for more details on the methodology.