Economic Commission for Latin America and the Caribbean

Topic Summary

In Latin America, working does not guarantee protection. Across the region, roughly half of all workers are employed informally, outside the reach of labor law, social security, and collective bargaining. Decades of reform efforts have done little to change this. Informality is not shrinking as economies grow; in many countries, it has deepened, becoming a permanent feature of how labor markets function rather than a symptom of underdevelopment that will eventually resolve itself.

Labor market dualism, the structural divide between formal and informal employment, shapes more than just wages. It determines who has access to healthcare, who can retire, who can organize, and who bears the most risk during economic downturns. It also creates feedback loops that are difficult to break: informality limits tax revenues, which weakens the institutions responsible for enforcing labor protections, making formalization less attractive, and continuing the cycle.

Delegates will be asked to engage with why these structures persist despite political will to change them, how regulatory design and taxation systems can inadvertently reinforce segmentation, and what genuine pathways toward more inclusive labor markets might look like. The goal is to think rigorously about the trade-offs, constraints, and political realities that any serious policy response has to contend with.