Expanding Social Protection and Addressing Informality in Latin America
By Jens Matthias Arnold, Aida Caldera & Elizabeth Friesen
Informality remains a defining feature of Latin America’s labour markets, with around half of workers employed outside formal arrangements. While rates have slowly declined in some countries, progress is uneven and fragile. The many faces of informality — from self-employed vendors to domestic workers and employees in small firms — highlight the diverse realities of those without contracts, secure incomes, or access to social protection. The COVID-19 pandemic was a wake-up call: it exposed the vulnerability of informal workers, who were among the hardest hit by job and income losses, and underscored the urgent need for more inclusive and resilient social protection systems.
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