Colombia | Non-Wage Employment, Major Driver of National Employment
Published on Friday, May 9, 2025
Colombia | Non-Wage Employment, Major Driver of National Employment
Summary
National employment grows, mainly driven by non-wage employment (+8% annually in March). Of 1.1M jobs created, most are independent and informal, raising the informality rate to 57.2%. The challenge is to formalize this employment to improve conditions and reduce poverty.
Key points
- Key points:
- Creation of non-wage employment widely surpasses wage employment (947 thousand vs 110 thousand in the last year).
- More than 70% of wage employment in Colombia is formal, with better working conditions and social security coverage.
- 80% of independent workers are informal, with the majority being self-employed.
- High labor informality is directly related to higher levels of multidimensional poverty in Colombian households.
- Effective measures are required to reduce informality in independent employment and promote formalization.
Geographies
- Geography Tags
- Latin America
- Colombia
Topics
- Topic Tags
- Macroeconomic Analysis
- Employment
- Financial Inclusion
Authors
María Claudia Llanes
BBVA Research - Senior Economist