~Despite some progress, a new ILO report highlights that labor informality, gender gaps, and access to formal employment for the youth remain key barriers to a more equitable labor market in Latin America and the Caribbean.~
LIMA (ILO News) โ Five years after the COVID-19 pandemic, Latin America and the Caribbean region has achieved relative stability in key labour market indicators, but structural challenges affecting employment quality and deepening inequalities remain. This is according to the "2024 Labour Overview of Latin America and the Caribbean", the latest report from the International Labour Organization (ILO).
The report reveals that between 2023 and 2024, the employment rate in the region increased by 0.5 percentage points, reaching 58.9 per cent, while the unemployment rate decreased from 6.5 per cent to 6.1 per cent. Despite these short-term improvements, however, labour force participation and employment levels remain below those recorded in 2012, reflecting insufficient job creation in recent years.
"The region has reached employment levels not seen since before the COVID-19 pandemic, but the outlook remains concerning: we are in the same situation as ten years ago. Economic growth is slowing down, and structural deficiencies in job creation persist," explained Ana Virginia Moreira Gomes, ILO Regional Director for Latin America and the Caribbean.
It is time to push for reforms that enable sustained progress and prevent stagnation.
Ana Virginia Moreira Gomes, ILO Regional Director for Latin America and the Caribbean
Gender inequality and persistent informality
Despite progress, gender gaps between women and men in the labour market remain a major concern. In 2024, the female labour force participation rate stood at 52.1 per cent, significantly below that of men (74.3 per cent). This implies that less women are working or actively looking for a job. Moreover, women earn on average 20 per cent less than men, continue to face higher unemployment rates and are found in lower-quality jobs.
"Gender disparities in employment remain a fundamental obstacle to achieving true labour equality in the region. Despite some progress, the gender pay gap and gender-based occupational segregation continue to limit opportunities for women," emphasized Gerson Martinez, Regional Specialist in Labour Economics at the ILO Regional Office for Latin America and the Caribbean and lead author of the report.
The report also found that that informality remained a predominant feature of the labour market in the region, at a rate of 47.6 per cent, slightly lower than in 2023 (48 per cent). This poses a challenge to employment quality and social inclusion because it means that nearly half of the workers in Latin America and the Caribbean have precarious contracts, unstable incomes, lack of social security, and increased economic vulnerability. Moreover, the majority of those impacted are female and young workers.
While some countries in the region have made progress in transitioning to the formal economy, others still face alarmingly high rates of informal employment. These high informality levels continue to undermine the ability to achieve decent working conditions.
Youth employment: A key challenge for the future of the region
Youth employment emerged as one of the biggest challenges in the labour outlook of Latin America and the Caribbean. Despite a slight decline in the youth unemployment rate, from 14,5 per cent in 2023 to 13.8 per cent in 2024, it is still nearly three times higher than that of adults. Opportunities for young people aged 15 to 24 remain limited, especially in a context of high informality and insufficient job creation.
As a result, the ILO report found that the lack of stable and paid jobs for young people remains one of the main concerns for the future of the regionโs labour market. High informality, low economic productivity and low wages continue to constrain employment prospects for youth.
"It is essential for countries in the region to develop policies that effectively integrate young people into the formal labour market. This means promoting technical and vocational education, as well as developing national care systems to help more women, especially young women, take part in the labour market . Countries must also work towards creating more formal jobs that provide stability and sustainable professional development," explained Martinez.
Urban and rural gaps
The report found persistent labour market gaps between urban and rural areas. In 2024, the employment rate in urban areas reached 59,1 per cent, surpassing pre-pandemic levels of 2019 (58 per cent). In contrast, rural areas have yet to fully recover with an employment rate of 52.3% in 2024 compared to 53.1 per cent in 2019. The gap in economic participation between urban and rural areas remains significant, with urban areas maintaining a 3.2 percentage point advantage.
Outlook for 2025: Strengthening job recovery and advancing formalization
The unemployment rate is projected to remain between 5.8 per cent and 6.2 per cent in 2025, within a context of moderate economic growth. "Advancing social justice in Latin America and the Caribbean is urgent. To achieve this, it is essential to promote policies based on effective tripartite social dialogue that builds on the progress made and foster stronger employment growth, with a particular focus on labour formalization," concluded Moreira Gomes
