The world is witnessing a profound transformation in its population structure, with significant implications for economic and social systems. Traditionally, populations resembled pyramids, with large numbers of young people at the base and fewer older individuals at the top. However, this pattern is rapidly changing into what experts describe as an "obelisk" structure, where the older age groups are expanding while the younger cohorts shrink. This shift is primarily driven by two factors: lower birth rates and increased life expectancy.

In many regions, including Mexico, families are choosing to have fewer children, leading to a decline in fertility rates below the replacement level of 2.1 children per woman. In Mexico specifically, the current fertility rate stands at 1.9, suggesting that the population will peak around 2058 before starting to decline. Meanwhile, the proportion of working-age individuals is expected to reach its highest point by 2030, after which it will gradually decrease. These demographic changes pose substantial challenges for economies that have long relied on growing populations to fuel economic activity and support aging citizens.

Mexico's economy has benefited from what economists call the "demographic dividend," where a larger working-age population contributes to higher GDP growth. Historically, favorable demographics added nearly 0.5 percentage points annually to per capita GDP growth in Mexico. However, projections indicate that this contribution will dwindle to just 0.1 percentage points by 2050. Additionally, the shrinking workforce will place greater strain on public finances, particularly in areas like pensions and healthcare. The support ratio, which measures the number of working-age individuals relative to those over 65, has dropped from nearly 13 to 8.4 since 1997 and is forecasted to fall further to 3.9 by 2050.

Mexico still has time to adapt to these demographic shifts by focusing on enhancing labor participation and productivity. Increasing female labor force participation, especially among women aged 20-49, could significantly boost economic output. Currently, only 52% of women in this age group participate in the workforce, compared to 74% in advanced economies. Improving childcare and eldercare infrastructure would enable more women to join or remain in the labor market. Moreover, Mexico can close the productivity gap with developed nations by investing in technology and innovation. With productivity currently standing at $30 per hour—half that of advanced economies—there is considerable room for improvement.

The coming decades present both challenges and opportunities for Mexico. As the country ages, it must prioritize policies that promote sustainable economic growth. By addressing key issues such as labor participation and productivity, Mexico can transform demographic change into a catalyst for progress. The time to act is now, as the window of opportunity is narrowing. With strategic planning and proactive measures, Mexico can ensure a prosperous future for all its citizens.