Labor informality in South America

Labor informality is emerging as a significant economic challenge across South American nations, threatening the sustainability of social security and worker rights.

In Colombia, the Aliadas group presented a roadmap to the government titled ‘De la informalidad laboral a los caminos hacia la formalidad’. This proposal addresses a workforce where 54.5% of workers are informal, a figure that rises to 83.2% in rural areas. The roadmap suggests 30 alternatives, such as simplified digital tools, to facilitate access to benefits. Researchers have warned that the shift toward self-employment and informal work jeopardizes the long-term financing of pensions and family allowances.

In Bolivia, informality has reached critical levels, with the National Institute of Statistics reporting a rate of 84.2% in March 2026. This trend is particularly acute among youth, with an informal occupation rate of 93.2%, and women at 85.9%. While the unemployment rate remains low at 3.2%, the high rate of informality means millions of citizens lack access to minimum wages, social security, and retirement benefits.