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CIR Must Include Social Security Totalization Agreement With Mexico: RAND

November 28, 2013 (1 min read)

"To manage the back end of the migrant labor lifecycle, the United States and Mexico should institute a bilateral social security agreement, which would make the social security contributions of legal workers portable between the two countries. Currently, the social security systems of both countries disregard the worker contributions paid into the system of the other country. As a result, Mexicans who work outside Mexico have a higher risk than nonmigrants of not meeting the minimum eligibility requirements for Mexican social security benefits upon retirement in Mexico.

The United States and Mexico already have bilateral social security agreements with several countries, but not with each other. Such an agreement, which would exclude undocumented migrants, would give legal migrants the potential of receiving retirement benefits that are comparable to those of nonmigrants in Mexico, thus giving legal migrants more flexibility to return to Mexico for job opportunities there or for family reasons. The flexible labor environment resulting from such an agreement could provide incentives for legal migrants to return home instead of staying longer in the United States in order to become eligible for U.S. social security benefits.

... To make social security contributions portable between countries, many countries have instituted bilateral social security agreements, also called "totalization" agreements. Since 1978, the United States has entered into such agreements with 19 European countries, Canada, South Korea, Chile, Australia, and Japan. Mexico has made similar agreements with Italy, Argentina, Spain, and Canada. In June 2004, an agreement between the United States and Mexico to coordinate social security benefits was drafted, but it has yet to be reviewed by the U.S. Congress and subsequently approved by the Mexican Senate." - Emma Aguila and John Godges, RAND Review, Fall 2013.