Peru faces high labor informality and demands for better public management

Peru faces significant structural challenges regarding labor informality and public management effectiveness. In 2025, labor informality in Peru reached 69.8% among employed persons, which is more than 22 percentage points higher than the average of 15 Latin American countries analyzed by the International Labour Organization (47.4%).

Experts suggest that addressing informality requires more than just reducing regulatory costs or simplifying procedures; there is a critical need to focus on productivity to make formal employment viable. Current strategies have historically relied on norms and inspections, often overlooking productivity as a key driver for sustainable formalization.

Parallel to economic issues, there is a growing demand from Peruvian citizens for results-oriented public management. Rather than focusing on bureaucratic activities such as the number of meetings held or documents issued, there is a call for the state to demonstrate tangible improvements in security, health, and education through measurable outcomes and accountability.