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ECLAC and ILO: The Region’s Main Labor Indicators Returned to Pre-Pandemic Levels, but Gaps Between Women and Men and High Informality Remain

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11 July 2023|Press Release

The United Nations organizations released a new edition of their joint report on the Employment Situation in Latin America and the Caribbean.

The Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organization (ILO) released today a new edition of their joint report Employment Situation in Latin America and the Caribbean (No. 28): Towards the creation of better jobs in the post-pandemic era, which analyzes the evolution of labor markets in Latin America and the Caribbean in 2022.

The report emphasizes that three years after the COVID-19 crisis, the main labor indicators have returned to the values that prevailed in 2019. This improvement in variables such as the labor participation rate, the unemployment rate, and the number of employed persons initiated in 2021, continued in 2022, although the number of employed persons grew at a slower pace than in 2021. The recovery has been heterogeneous within the region, and some indicators have yet to reach their pre-pandemic levels in certain countries. Overall, the recovery has tended to be stronger among women than men, and among young people as compared with adults, the document stresses.

The publication indicates that, despite the improvement, significant gender and age gaps remain in terms of participation and unemployment rates. The region’s average labor productivity declined in 2022, with notable contractions in productivity in the industry, construction and commerce sectors. Meanwhile, real average wages stagnated in 2022, in contrast to the increase seen in 2021, reflecting the impact of higher inflation.

The progress observed in labor markets between 2020 and 2022 reflects a cyclical recovery of economic growth that is not sustainable over time. In fact, ECLAC projects regional economic growth of 1.2% for 2023, which will undoubtedly result in less vigorous job creation, and the increase in the number of employed persons is estimated at under 2%, versus the 5.9% growth experienced in 2022.

The report emphasizes that the return by the labor market’s main indicators and its composition to pre-pandemic levels is not enough, since the structural problems that mark the region’s labor markets are still present. Informal employment continues to be high, and despite the improvements seen in 2022, significant gender gaps remain in participation and unemployment rates. Wages and productivity have also returned to their pre-pandemic trends, pointing to stagnation at best, the report warns.

According to ECLAC and the ILO, to reverse this situation, the region’s countries need active labor policies that promote greater job creation, increased formalization and more (and better) inclusion of women and young people in the labor market. Thus, labor policy instruments must be broadened and better coordinated in order to avoid contractions in employment. Also, more emphasis must be placed on the economic reactivation by including dynamic sectors that drive economic growth and employment.