Regions and Cities at a Glance 2020

Regions and Cities at a Glance 2020 provides a comprehensive assessment of how regions and cities across the OECD are progressing in a number of aspects connected to economic development, health, well-being and net zero-carbon transition. In the light of the health crisis caused by the COVID-19 pandemic, the report analyses outcomes and drivers of social, economic and environmental resilience. Consult the full publication here.

OECD REGIONS AND CITIES AT A GLANCE - COUNTRY NOTE

MEXICO

A. Resilient regional societies

B. Regional economic disparities and trends in productivity

C. Well-being in regions

D. Industrial transition in regions

E. Transitioning to clean energy in regions

F. Metropolitan trends in growth and sustainability

The data in this note reflect different subnational geographic levels in OECD countries: • Regions are classified on two territorial levels reflecting the administrative organisation of countries: large regions (TL2) and small regions (TL3). Small regions are classified according to their access to metropolitan areas (see https://doi.org/10.1787/b902cc00-en). • Functional urban areas consists of cities – defined as densely populated local units with at least 50 000 inhabitants – and adjacent local units connected to the city (commuting zones) in terms of commuting flows (see https://doi.org/10.1787/d58cb34d-en). Metropolitan areas refer to functional urban areas above 250 000 inhabitants.

Regions and Cities at a Glance 2020 Austria country note 2  A. Resilient regional societies Mexico city has the highest share of buildings connected to internet through fiber, however access to broadband internet is unequally distributed across Mexican regions

A1. Share households with broadband access to internet Large regions (TL2)

A broadband connection is an important requirement for households for having access to information and to other services and affects their opportunities to work remotely. Large regional disparities in broadband connection are observed in Mexico, where the average national level of access to broadband access is also relatively low compared to other OECD countries. The shares of households with broadband access to internet in the Mexican regions ranged from 81% in Sonora to less than 25% in Chiapas (Figure A1).

Mexico City has the highest fiber optic availability across large regions in Mexico with 35% of the buildings connected to the network (Figure A2). A2- Internet infrastructure Share of buildings connected to fiber, 2017

Top 10 Mexico City Nuevo Leon Yucatan San Luis Potosi Jalisco Aguascalientes Mexico Baja California Sur Chihuahua Puebla [...] Bottom 10 Guerrero Sinaloa Oaxaca Colima Campeche Durango Tamaulipas Zacatecas Tlaxcala Nayarit 0 20 40 60 80 100 % Low coverage Full coverage

Figure [A1]: OECD (2020), Capacity to remote working can affect lockdown costs differently across places, http://www.oecd.org/coronavirus/policy- responses/capacity-for-remote-working-can-affect-lockdown-costs-differently-across-places-0e85740e/  3 Ageing remains low and stable in all Mexican states The elderly dependency rate has been relatively stable in all types of regions in Mexico since 2000. Regions far from metropolitan areas show the highest elderly dependency rate (14%) among different types of regions (Figure A3), but are at less than the half of the OECD average (Figure A4).

A3. Elderly dependency rate A4. Elderly dependency rate, 2019 By type of small regions in Mexico (TL3) Small regions (TL3)

Metropolitan regions Regions near a metropolitan area % Regions far from a metropolitan area 30

OECD 20 average of regions

5 2000 2010 2019

All states in Mexico have fewer hospital beds per inhabitant than the OECD average

A5 - Hospital beds per 1000 inhabitants All regions in Mexico have significantly ‰ Large TL2 regions fewer hospital beds per capita than the 6

OECD average, with little change in most Top 10 regions since 2000 (Figure A5). Regional Bottom 10 disparities in hospital beds are above 4 OECD average, with Chiapas having the lowest number of hospital beds per 1 000 City Mexico

Mexico

Coahuila

Nuevo Leon Nuevo Jalisco

inhabitants in 2017, four times less than in Sonora

Chihuahua

Durango

Colima

Tamaulipas

Yucatan

Nayarit

Quintana Roo Quintana

Veracruz

Guerrero

Oaxaca Morelos

Hidalgo

Tlaxcala Mexico

Mexico City. Chiapas

OECD

[…] 0 2017 2000

Figure notes. [A3]: OECD (2019), Classification of small (TL3) regions based on metropolitan population, low density and remoteness

https://doi.org/10.1787/b902cc00-en. Two-year moving averages. [A4]: Small (TL3) regions contained in large regions. TL3 regions in Mexico are composed by 209 groups of Municipios. Regions and Cities at a Glance 2020 Austria country note 4  B. Regional economic disparities and trends in productivity

Economic disparities between the richest and poorest 20% of regions in Mexico are larger than in any other OECD country Mexico has stark regional economic disparities (Figure B1). GDP per capita in Mexico City was more than six times higher than in Chiapas in 2018. Even when resource rich regions (i.e. Campeche or Tabasco) are excluded, regional economic disparities in Mexico remain larger than in any other OECD country.

B1. Regional disparity in GDP per capita Top 20% richest over bottom 20% poorest regions Ratio Small regions Large regions

2018 2000 Country (number of regions considered) Note: A ratio higher than two means that 20% of the national population living in the richest regions have more than the double of GDP per capita than the 20% population living in the poorest regions.

With a productivity growth of 2.3% per year over the period 2005-18, Queretaro had the highest productivity growth and caught up to Mexico City, the national frontier in terms of labour productivity (excluding Campeche). Baja California has recorded the lowest productivity growth of the country with - 1.2% per year between 2005 and 2018 (excluding Campeche and Tabasco due to fluctuation of natural resource prices) (Figure B2).

B2. Gap in regional productivity GDP per worker, large (TL2) regions USD 100 000

80 000

60 000

40 000

20 000

Mexico City (Highest productivity after Campeche) Queretaro (Highest productivity growth) Baja California Norte (Lowest productivitygrowth)

 5 C. Well-being in regions

Mexico faces large regional disparities in 5 out of 11 well-being dimensions, particularly in the dimensions of life satisfaction and sense of community

C1 Well-being regional gap

Top region Bottom region Mexico City States

Baja California Tamaulipas

Sur top top 20%

Quintana

(1 to 440) to (1 Roo Yucatan

Baja California

middle middle 60% Sur Yucatan Sonora Mexico City Mexico City Nuevo Leon

Ranking Ranking OECD of regions Mexico City

Tabasco Quintana Mexico City Sonora bottom bottom 20% Roo Guerrero Colima Chiapas Chiapas Guerrero Chihuahua Chiapas

Community Life Civic Jobs Safety Access to Education Environment Housing Health Income Satisfaction Engagement services

Note: Relative ranking of the regions with the best and worst outcomes in the 11 well-being dimensions, with respect to all 440 OECD regions. The eleven dimensions are ordered by decreasing regional disparities in the country. Each well-being dimension is measured by the indicators in the table below.

While most Mexican states are in the middle 60% of OECD regions in the dimensions of civic engagement and jobs, they are all in the bottom 20% of OECD regions in the dimension of income and health. In contrast, outcomes across regions are very unequal in the dimension of safety. While Yucatan is in the middle 60% of OECD regions in terms of homicide rates, Colima is in the bottom 20% of OECD regions (Figure C1). The average of the top performing Mexican regions is below the average of the top 20% of OECD regions in the majority of well-being indicators, with the exception of unemployment rates (Figure C2).

C2. How do the top and bottom regions fare on the well-being indicators?

Country OECD Top Mexican regions Average 20% regions Top 20% Bottom 20% Community Perceived social netw ork support (%), 2014-18 81.1 94.1 89.1 73.0 Life Satisfaction Life satisfaction (scale from 0 to 10), 2014-18 6.5 7.3 7.2 5.8 Civic engagement Voters in last national election (%), 2019 or latest year 63.1 84.2 70.1 54.2 Jobs Employment rate 15 to 64 years old (%), 2019 62.4 76.0 66.7 56.9 Unemployment rate 15 to 64 years old (%), 2019 3.7 3.3 2.2 5.2 Safety Homicide Rate (per 100 000 people), 2016-18 24.3 0.7 9.3 51.3 Access to services Households w ith broadband access (%), 2019 49.7 91.3 70.7 29.4 Education Population w ith at least upper secondary education, 25-64 year-olds (%), 2019 39.1 90.3 49.2 28.2 Environment Level of air pollution in PM 2.5 (µg/m³), 2019 15.1 7.0 17.2 22.9 Housing Rooms per person, 2018 1.0 2.3 1.2 0.8 Health Life Expectancy at birth (years), 2018 75.1 82.6 76.2 73.5 Age adjusted mortality rate (per 1 000 people), 2018 10.1 6.6 9.4 10.8 Income Disposable income per capita (in USD PPP), 2018 4 035 26 617 5 853 2 517

Note: OECD regions refer to the first administrative tier of subnational government (large regions, Territorial Level 2); Mexico is composed of 32 large regions. Visualisation: https://www.oecdregionalwellbeing.org. Regions and Cities at a Glance 2020 Austria country note 6  D. Industrial transition in regions

Manufacturing employment has grown in the majority of Mexican states since 2005

D1. Manufacturing employment share, regional gap Large TL2 regions % Between 2005 and 2018, in 15 out of 32 large 35 regions in Mexico experienced a decline in the

30 share of manufacturing employment. With a Coahuila reduction of 5.9*percentage point in the share 25 of manufacturing employment, Puebla 20 recorded the largest decline (Figure D1).

15 Highest growth Puebla Highest decline 10

Decline in manufacturing employment between 2005 and 2018 coincided with a reduction in manufacturing gross value-added in the three most populous states (Mexico, Mexico City and Jalisco). At the opposite, Guanajuato, Nuevo Leon, Chihuahua, Baja California Norte, Coahuila and San Luis Potosi, experienced a growth in both employment and GVA manufacturing shares in the same period (Figure D2).

D2. Manufacturing trends, 2005-18 Total jobs Jobs in GVA in by region manufacturing manufacturing Size of bubble represents the % value of the indicator Total regional Employment in GVA in employment as a manufacturing as manufacturing as Colours represent the share of national a share of regional a share of regional Legend 2005-18 change employment employment GVA

Top 20 Mexico 20

City of Mexico 19

Jalisco 18

Veracruz 17

Puebla 16

Guanajuato 15

Nuevo Leon 14

Michoacan 13

Chiapas 12

Oaxaca 11

Chihuahua 10

Tamaulipas 9

Baja California Norte 8

Guerrero 7

Sonora 6

Coahuila 5

Sinaloa 4

Hidalgo 3

San Luis Potosi 2

Yucatan 1

Largest bubble size represents: 14% 30% 43%

Figure [D.2]: Regions are ordered by regional employment as a share of national employment. Colour of the bubbles represents the evolution of the share over the period 2005-18 in percentage points: red: below -2 pp; orange: between -2 pp and -1 pp; yellow: between -1 pp and 0; light blue: between 0 and +1 pp; medium blue: between +1 pp and +2 pp; dark blue: above +2 pp over the period.  7 E. Transitioning to clean energy in regions

While 28 out of 30 Mexican regions are coal-free in electricity production, Coahuila and Guerrero – two of the largest producers of electricity – highly rely on coal Veracruz, Tamaulipas, Baja California, Coahuila and Nuevo Leon, the top electricity producers in Mexico, generated two-thirds of Mexican electricity in 2017. However, while four of these regions are coal-free in electricity generation, Coahuila produced 81% of its electricity using coal. In contrast, Chiapas – which produces 6% of electricity in the country – is leading in the transition to clean electricity in Mexico with Oaxaca and Michoacan, with 93% or more of the electricity production coming from renewable sources (Figure E1). E1. Transition to renewable energy, 2017 Regional share of Regional share of Greenhouse gas Electricity generation renewables in coal in emissions from (in GWh per year) electricity generation electricity generation electricity generated

(%) (%) (in Ktons of CO2 eq.) (Top 20) Veracruz 39 049 3% 0% 14 648 Tamaulipas 37 943 0% 0% 18 788 Baja California 27 261 15% 0% 11 695 Coahuila 18 559 2% 81% 13 870 Nuevo Leon 17 925 1% 0% 8 692 Guerrero 17 682 9% 91% 13 194 Chihuahua 15 485 1% 0% 7 851 Colima 14 633 0% 0% 7 802 Chiapas 13 569 93% 0% 755 San Luis Potosi 12 490 2% 0% 6 660 Oaxaca 11 876 93% 0% 567 Hidalgo 10 121 7% 0% 5 395 Durango 9 776 0% 0% 4 930 Yucatan 9 594 0% 0% 4 783 Sonora 9 170 5% 0% 4 843 Queretaro 8 041 0% 0% 3 939 Mexico 7 414 0% 0% 3 624 Michoacan 6 102 100% 0% 176 Campeche 4 885 0% 0% 2 449 Sinaloa 4 866 43% 0% 1 887

Carbon efficiency in electricity generation is very unequal across Mexican regions. According to OECD estimations, while Chiapas emits around 55 tons of CO2 per gigawatt hour of electricity produced, Coahuila releases almost 750 tons of CO2 per gigawatt hour. In 2017, Coahuila accounted for 10% of Mexico’s CO2 emissions from electricity generation (E2).

E2. Contribution to total CO2 emissions from electricity production, 2017 Share of electricity production Share of CO2 emissions % High carbon efficiency (top 10) Low carbon efficiency (bottom 10) 16 Contribution to total electricity production Contribution to total electricity production 14 higher than contribution to CO2 emissions lower than contribution to CO2 emissions 12 10 8 6 4 2 0

Figure notes: Regions are arranged in Figure E1 by total generation, and in Figure E2 according to gap between share of electricity generation and share of CO2 emissions (most positive to most negative). These estimates refer to electricity production from the power plants connected to the national power grid, as registered in the Power Plants Database. As a result, small electricity generation facilities disconnected from the national power grid might not be captured. Renewable energy sources include hydropower, geothermal power, biomass, wind, solar, wave and tidal and waste. See here for more details. Regions and Cities at a Glance 2020 Austria country note 8  F. Metropolitan trends in growth and sustainability

Compared to OECD average, Mexico has a 10-percentage point lower share of the population in functional urban areas

In Mexico, 65% of the population lives in cities of more than 50 000 inhabitants and their respective commuting areas (functional urban areas, FUAs), a lower share than the OECD average of 75%. The same occurs for functional urban areas over half a million people, which account for 54% of the population in Mexico and 60% in OECD countries, on average (Figure F1). F1. Distribution of population in cities by city size Functional urban areas, 2018 Mexico,United percentage States of population in cities Population by city size, a global view

Above Between 250 000 Between 50 000 Other settlements other settlements above % 500 000 pop. and 500 000 pop. and 250 000 pop. below 50 000 below 50 000 500 000 100

80 35% 124.7 million 60 people - 65% 54% live in cities 40 75% 65% 64% 60% between 50 000 4% 54% and 250 000 20 7% 25% between 250 000 0 and 500 000 Mexico Europe OECD (29 countries) (37 countries)

Built-up area per capita in Mexican metropolitan areas is almost three times lower than the OECD average of metropolitan areas. Built up area per capita has increased in 15 out of 39 Mexican metropolitan areas since 2000. Built-up area per capita has increased in 15 functional urban areas in Mexico since 2000, especially in Juarez, Veracruz and Ahome, where the difference between the growth of built-up area and growth in population is the most pronounced. At the opposite, in Ensenada, Oaxaca de Juarez and Benito Juarez, population has grown faster than built-up area (Figure F2).

F2. Built-up area per capita Functional urban areas with more than 500K inhabitants m2 per capita 2014 2000 300

200

100

Leon

Saltillo

Juarez Toluca

Merida

Celaya Puebla Xalapa

Ahome

Morelia Tijuana

Orizaba Torreon

Mexicali

Irapuato

Tampico Durango

Culiacan

Reynosa

Veracruz

Mazatlan

Ensenada Queretaro Monterrey

Hermosillo

Chihuahua

Matamoros

Mexico City Mexico

Cuernavaca

Guadalajara

Acapulco de… Acapulco

Villahermosa

Poza Rica de… Rica Poza

Benito Juarez Benito

OECD average OECD

Aguascalientes

San Luis Potosi Luis San

Tuxtla Gutierrez Tuxtla Pachuca de Soto de Pachuca

Oaxaca de Juarez de Oaxaca

Source: OECD Metropolitan Database. Number of metropolitan areas with a population of over 500 000: 39 in Mexico compared to 349 in the OECD.  9

Monterrey has the highest GDP per capita of Mexican metropolitan area of at least half a million, but the second last in terms of GDP per capita growth since 2003 In Mexico, Monterrey stands out with a level of GDP per capita close to 34 000 USD, 30% higher than in Mexico City – the second Mexican metropolitan area in terms of GDP per capita – and twice higher than in Cuernavaca. With an average GDP per capita growth of 2.6% per year between 2003 and 2018, Aguascalientes records the highest growth in Mexico.

F3. Trends in GDP per capita in metropolitan areas Functional urban areas above 500 000 people

GDP per capita, 2018 Annual growth GDP per capita 2003-18