Chapter 7: Social Security Overview for Young People in Mexico and Their Employment Benefits Tax Implications

The general objective of this research is to conduct a legal and statistical analysis of the current working and social security conditions of young people in Mexico, including the Gen Z population. First, they face the problem of informality. Second, despite the formality, the role that the State has taken in collecting Income Tax (ISR) on employee benefits by using the Unit of Measurement and Adjustment (UMA) to determine the exempt portion. This generates higher income tax payments owing to minimum legal conditions such as Christmas bonuses, vacation bonuses, among others. Finally, it is necessary to measure insured young people's behaviour in the Mexican Social Security Institute (IMSS), as well as a 2032 projection of the total number of beneficiaries over 18 but under 30 years of age. The methodology used to annually project the number of total beneficiaries between 18 and 30 years of age is a multiple linear regression model with Ordinary Least Squares (OLS). The results show that the highest figures for the Gen Z beneficiary population are expected for the 2024 to 2027 years, based on the forecast made using the model mentioned.