Lack of job opportunities leads to informality in Latin America

October 16, 2015

About half of the jobs available in Latin America are in the informal sector and most of these workers have low income and are in poverty.

Informality in the region prevails mainly in the areas of domestic work, but there are also large proportions in construction, the textile and clothing industry, and small-scale commerce.

Professor Luis Beccaria from the School of Economics and Sciences of the University of Buenos Aires, described the panorama of the region in this way. The expert participated in a panel on the subject, held today at the United Nations headquarters.

“The presence of informality is the result of inadequate growth and that it is insufficient to absorb the continuous influx of new employees into the labor market. The lack of alternatives to work in the formal sector gives rise to jobs of this type, which are the only option that many find to obtain an income, ”said the Argentine academic and economist.

He explained that in Latin America there is also the phenomenon of formal companies that hire employees without offering them the guarantees of labor and social coverage that the laws require.

In addition, Beccaria said, another source of informality is outsourcing by large firms to try to reduce their production costs.

To formalize the economies, the expert encouraged the countries of the region to address, first, the registration of domestic employees who constitute the largest proportion of informal workers.

October 16, 2015

About half of the jobs available in Latin America are in the informal sector and most of these workers have low income and are in poverty.

Informality in the region prevails mainly in the areas of domestic work, but there are also large proportions in construction, the textile and clothing industry, and small-scale commerce.

Professor Luis Beccaria from the School of Economics and Sciences of the University of Buenos Aires, described the panorama of the region in this way. The expert participated in a panel on the subject, held today at the United Nations headquarters.

“The presence of informality is the result of inadequate growth and that it is insufficient to absorb the continuous influx of new employees into the labor market. The lack of alternatives to work in the formal sector gives rise to jobs of this type, which are the only option that many find to obtain an income, ”said the Argentine academic and economist.

He explained that in Latin America there is also the phenomenon of formal companies that hire employees without offering them the guarantees of labor and social coverage that the laws require.

In addition, Beccaria said, another source of informality is outsourcing by large firms to try to reduce their production costs.

To formalize the economies, the expert encouraged the countries of the region to address, first, the registration of domestic employees who constitute the largest proportion of informal workers.