Colombia had the second highest labor informality in the OECD in 2025: 56% of workers are outside the system
Labor informality continues to be one of the negative points, behind the reductions in the unemployment rate, which for January was 10.9%. Of...
TL;DR
- Colombia had a 56% informal employment rate in 2025, second highest in the OECD.
- Globally, 57.7% of workers are in the informal labor market.
- Factors driving informality include low education, poverty, small businesses, regulatory issues, and weak economies.
- In Colombia, high non-wage labor costs (40-60% above salary) and a potentially high minimum wage relative to productivity are key barriers.
- High informality threatens future pension system sustainability and reduces tax collection.
- Proposed solutions include business and tax reforms, reducing income taxes, expanding the tax base, and promoting high value-added sectors.
- European countries like France and Spain achieve lower informality through more productive economies and balanced sectors, supported by policies guaranteeing decent work.