Latin America Jobs Recover in 2025, but Informality and Inequality Persist

The report shows that during the first half of 2025, the average labour force participation rate in the region remained close to 63 per cent, while the employment rate reached nearly 60 per cent.

Employment across Latin America and the Caribbean recorded a moderate recovery in 2025, but deep-rooted informality and inequality continue to challenge the region’s labour markets, according to the newly released Labour Overview 2025 for Latin America and the Caribbean by the International Labour Organization (ILO).

The report shows that during the first half of 2025, the average labour force participation rate in the region remained close to 63 per cent, while the employment rate reached nearly 60 per cent. At the same time, the unemployment rate declined further to around 6 per cent, marking one of the lowest levels recorded in the past 15 years. These trends indicate that labour market participation has remained stable compared to 2024 and that a greater number of people have been able to secure jobs.

However, the ILO cautions that these positive averages mask persistent structural problems. Informality remains a defining feature of employment in the region. Although the informal employment rate declined slightly to 46.7 per cent in the first half of 2025, nearly one in every two employed persons continues to work without formal contracts, social protection or labour rights.

“The region cannot be content with averages that seem positive. We need active policies that promote decent work, equality and protection,” said Ana Virginia Moreira Gomes, ILO Regional Director for Latin America and the Caribbean. She stressed that the ILO remains committed to supporting countries as they respond to rapid changes in the world of work and address long-standing inequalities.

Gender and age gaps remain among the most pressing concerns highlighted in the report. While women’s labour market outcomes have improved more rapidly than men’s in recent years, significant disparities persist. Male labour force participation and employment rates are still 22 percentage points higher than those of women, while women’s unemployment rate exceeds men’s by two percentage points.

Young people continue to face particularly severe challenges. Youth aged 15 to 24 experience an unemployment rate nearly three times higher than that of adults. Informality affects 56 per cent of young workers, compared to 43 per cent among adults, limiting their access to stable incomes, social protection and career development opportunities.

Behind these figures are millions of individuals whose livelihoods depend on access to decent work. The ILO emphasises that employment outcomes influence not only income levels, but also health, education, wellbeing and long-term development prospects. As such, the organisation argues that recovery must go beyond headline indicators, placing formalization and decent work at the centre of sustainable and socially just development strategies.

The report also reveals wide disparities across countries, economic sectors and population groups. Women and young people remain disproportionately affected by unemployment, informality and precarious forms of work, reflecting structural inequalities that require targeted policy responses.

In addition, Labour Overview 2025 examines emerging trends in the world of work, with particular attention to digital platform employment. One key finding shows that among platform workers, higher levels of education are associated with higher incomes, underscoring the growing importance of skills and education in navigating new labour market realities.

“Employment is transforming. While some indicators are improving, we need to look below the surface,” said Gerson Martínez, labour economist and lead author of the report. “Data reveal significant disparities across countries and population groups. New forms of work demand updated policies and regulatory frameworks.”

The publication follows the 20th ILO American Regional Meeting, held in October 2025, where governments, employers and workers reaffirmed their commitment to decent work, formalization and tackling structural inequalities through the Punta Cana Declaration.

By providing detailed data disaggregated by country, age, sex and economic sector, the Labour Overview 2025 for Latin America and the Caribbean serves as a critical resource for policymakers, employers, workers’ organisations and journalists seeking to understand current labour market trends and shape inclusive employment policies for the future.