Labour Market Trends in Latin America and the Caribbean

In 2025, in aggregate terms, labour markets in Latin America and the Caribbean continued to perform favourably: employment kept growing, unemployment reached one of its lowest levels in recent decades, and informality continued to decline, driven mainly by the creation of formal employment. However, behind this regional performance, significant differences between countries remain, along with gaps that particularly affect women and young people.

This first edition of Labour Market Trends in Latin America and the Caribbean analyses harmonised regional data on labour force participation, employment, unemployment and informality, together with an initial assessment of labour market developments in 2026. The publication also examines the two-way relationship between productivity and formalisation, and argues that labour and productive development policies should complement one another to expand access to finance, technology, skills, social protection and markets.

The selected visualisations bring together some of the report’s main findings on recent labour market developments in the region. Taken together, they show progress in employment and reductions in unemployment and informality, but also significant differences between countries and subregions.

The decline in the informality rate in 2025 is a favourable sign, as it points to a gradual formalisation process and an improvement in the composition of regional employment. However, behind this regional average, deep differences between countries remain, showing that formalisation processes require differentiated policy responses depending on the level of labour market development, the type of labour market attachment, the characteristics of economic units and the specific features of different territories.

The decline in unemployment observed in the regional average was widespread across subregions and countries, although it reflected differing labour supply and demand dynamics. This diversity of trajectories confirms that changes in the unemployment rate can only be properly interpreted when analysed alongside changes in labour force participation and employment.

The information available for the first quarter of 2026 suggests that the region is continuing to consolidate the labour market recovery that began following the pandemic. However, it also confirms that the drivers of this evolution are gradually changing. As the momentum of the cyclical recovery loses strength, factors such as productivity, formalisation, women’s labour force participation and slower labour force growth are becoming increasingly important in explaining employment developments.