TREES Special: Colombian Labor Market

In Latin America - and especially in Colombia - the labor market is characterized by high levels of informality, profound inequalities by gender, social origin, race and territory, and by the exclusion of young people, migrants and rural populations.

According to the National Administrative Department of Statistics (DANE), between March and May 2025 the The labor informality rate was 55.9%, This means that more than half of the workers do not pay health or pension contributions. In the scattered rural and populated centers, the proportion reaches 83,4%, This is evidence of a territorial gap.

In addition to this, there are gender inequalities: female women earn an average of 5.8% less than men. per hour worked and face higher levels of unemployment and informality.

It is in this context that, from TREES, we propose this special to open a critical and diverse conversation about the challenges facing employment in Colombia. Rather than offering closed answers, we seek to problematize the present of the work and its possible futures.

In Colombia, as Óscar Becerra, researcher at the Center for Economic Development Studies (CEDE) of the School of Economics at the Universidad de los Andes, points out, these structural problems translate into an unequal labor market, where more than half of the workers lack access to social protection.

The structural flaws of the Colombian labor market, warns Becerra, increase poverty, limit productivity and hinder social mobility.

Talking about the labor market implies recognizing that work not only organizes the economy, but also defines how people participate in society, construct their identity and project their future.

As noted by the International Labour Organization (ILO, 2019)., In Colombia, “decent work is essential for the well-being of people and the sustainable development of societies”. However, in Colombia - as in much of Latin America - work reflects the structural inequalities that permeate social life.

Informality and inequalities of gender, race, social origin and territory. are not isolated phenomena: they are part of an system that has historically distributed opportunities, income and labor rights unequally., The company's social security system, which reproduces gaps that limit access to decent employment and social protection, is a major obstacle to the development of the country's economy.

Professor Óscar Becerra explains that the Colombian labor market is a space where “jobs are created, but destroyed. In addition, the dynamics of Colombian companies is the dynamics of small companies. More than 90% of the companies in Colombia have less than 10 workers.”.

This feature explains much of the fragility of the system: the size of companies limits productivity, innovation and the capacity to offer formal jobs with social protection. In this context, the labor reform seeks to balance workers' rights with business sustainability, a challenge that, according to Becerra, is still open.

“This reform has been very much aimed at guaranteeing rights, that is, that workers who are already employed with a formal job have certain additional guarantees, but it has not been very focused on trying to expand the number of jobs available to people who are looking for better jobs,” he says.

To learn more, we invite you to watch this video in which professor and researcher Óscar Becerra and the Vice Minister of Employment and Pensions, Iván Daniel Jaramillo Jassir, analyze the structure of the Colombian labor market, public policies to make it more dignified and inclusive, and the challenges posed by the work of the future.

If you want to go deeper, we propose a tour through different approaches and voices that allow you to better understand the challenges of the labor market in Colombia.

Tour through the contents of the special

Social capital at work

In Latin America - one of the most unequal regions in the world, according to ECLAC (2023) - access to a formal and stable job is still conditioned by factors that have little to do with merit or effort. Place of birth, surname, parents' education or family networks are as important as qualifications or technical skills. This set of relationships and ties that broaden the possibilities of accessing a better job is known as social capital, and is key to understanding the dynamics of the labor market.

This social capital not only influences who gets access to certain opportunities, but also how doors open or close throughout working life. Sociologist María José Álvarez, a professor at the Universidad de los Andes, has studied this phenomenon in depth. Her research Balancing the playing field, presented in this TREES Research Film, offers a critical look at the inequalities faced by first-generation college students as they enter the world of work.

The study shows that, even with comparable academic achievements, their initial income and opportunities are lower than those of their more privileged peers.

Ultimately, the link between better jobs and social capital shows that inequality in the labor market does not begin with a lack of training, but at the very moment when the doors of employment open or close. Recognizing this is the first step in building hiring policies and practices that do not reproduce the privileges of origin, but rather broaden access to the talent and diversity that the country needs to grow.

Gender inequalities in the labor market

In Colombia, the overburden of care that falls on women accounts for a good part of the employment and income gap between men and women, but it remains an invisible dimension of economic policy. The time they spend caring for children, the elderly or dependents limits their labor participation, economic independence and well-being.

Infographics “Caregiving shouldn't cost job opportunities.” explore how the Manzanas del Cuidado in Bogota are contributing to the improving the quality of life of women and to open up new opportunities.

Since 2020, the Manzanas del Cuidado - one of the most innovative initiatives in Latin America - have served more than 860,000 women and their families free of charge, offering educational, health and wellness services while someone else cares for their loved ones.

Its commitment is transformative: redistributing care to free up women's time and open up opportunities.

This approach demonstrates that when the state assumes part of the burden of care, women's employment grows and equity becomes more tangible. In an interview with El País, Ana Güezmes, ECLAC representative, said that investing in care systems could help to improve the quality of care. increasing female labor participation in Latin America by up to 12%.

This type of policy demonstrates that advancing equality requires recognize and redistribute care work, and to guarantee working conditions that do not deepen existing inequalities. However, not all reforms point in this direction.

In the Coffee with TREES, Professor Natalia Ramírez, from the Law School of the Universidad de los Andes and member of the Digna Project, reflected on how the labor reform of 2025 (Law 2466), although it introduces provisions aimed at improving the conditions of domestic and rural work, could be generating adverse effects on women's employment.

“Let's think about the case of an employer who perceives that by hiring women, he will have to offer them flexible arrangements to allow for the compatibility of caregiving responsibilities. They will most likely decline the opportunity to hire these women,” says Ramirez.

The tensions aroused by the reform show that gender inequalities are not only solved by public policy: they are also deeply rooted in the social, economic, political and cultural context of the country. the spaces where work is lived on a daily basis. And it is at this level - that of practices, organizational cultures and business decisions - where much of the equity is at stake.

In an interview for this special, we spoke with Mía Perdomo, co-founder of Aequales, a Latin American company dedicated to promoting gender equity and diversity in organizations. Her reflection shows how imaginaries about who fits in the work environment continue to reproduce structures of exclusion that limit the full participation of women, diverse people and historically marginalized groups.

It also shows how initiatives such as the PAR Ranking, led by Aequales, have allowed us to hundreds of organizations measure their gender gaps, review their processes and adjust their internal cultures toward greater co-responsibility.

Young people facing an uncertain labor market

In Colombia, for thousands of young people, work no longer means stability. Although the country shows a recovery in employment figures, most of the new positions are still informal, with low incomes and no social protection.

Faced with this panorama, many young people opt for entrepreneurship instead of accepting precarious jobs. However, for many of them, entrepreneurship is not a full choice, but a forced way out in the face of the lack of formal opportunities.

And what happens when young people enter the traditional labor market? Beatriz Blanco, Mutante contributor and conversation leader “Let's talk about youth precarization.”, In an interview for this special, he pointed out that what many young people find is not an opportunity for growth, but an experience of disillusionment: unpaid internships, jobs outside their professional field or temporary jobs with abusive conditions.

For this reason, it is essential to address the tensions that mark the beginning of working life: the difficulty of accessing a formal job, the pressure to generate immediate income and the feeling that professional experience is built at the expense of stability. In this Vox Pop (part 1), we asked young people about the employment decisions they have had to make.

The voices of young people show that the labor market is a scenario full of uncertainties. The gap between education, expectations and labor reality reveals a system that fails to guarantee fair opportunities and stability.

What conversations do we need to transform the Colombian labor market?

This journey is not intended to close the discussion, but rather to open new questions about how we work today and what kind of work we want to build for the future. The voices, data and views gathered in this special show that the labor market in Colombia is a terrain full of nuances, tensions and opportunities to be explored. This is precisely why we need more conversations: to better understand what is happening to us, to question what we take for granted and to imagine, among many, fairer and more inclusive paths.

At TREES we want to continue promoting these dialogues and we invite you to join us in the next conversations, because transforming work is -and must be- a collective exercise.

Sources consulted in the special:

  • Economic Commission for Latin America and the Caribbean (ECLAC). (2022). Labor inclusion as a key to inclusive social development. ECLAC.
  • Economic Commission for Latin America and the Caribbean (ECLAC). (2023). Social Panorama of Latin America 2023. ECLAC.
  • Center for Distributive, Labor and Social Studies (CEDLAS) (2022). Income inequality and social mobility in Latin America. National University of La Plata.
  • Esquivel, V. (2024). Work, gender and inequality: challenges for equity in Latin America. Buenos Aires: CLACSO.
  • Fedesarrollo (2025). Labor market report: informal employment and social protection in Colombia. Fedesarrollo.
  • Folbre, N. (2012). The Political Economy of Care: Building a More Caring Economy. Cambridge Journal of Economics, 36(2), 373-390.
  • Global Entrepreneurship Monitor (GEM). (2021). Global Entrepreneurship Report 2021: Colombia. GEM.
  • Global University Entrepreneurial Spirit Students’ Survey (GUESSS). (2024). Colombia 2024 Report. GUESSS Project.
  • International Labour Organization (ILO). (2019). Decent work and the Sustainable Development Goals: A support guide for social dialogue. ILO.
  • International Labour Organization (ILO). (2023). Persistent inequalities in the labor markets of Latin America and the Caribbean. ILO.
  • Perdomo, M. (2025). Interview for the special “Rethinking work: inclusion, inequality and transformation”. TREES.
  • Ramirez, N. (2025). Coffee with Prof. Natalia Ramírez: reflections on labor reform 2025 (Law 2466). School of Law, Universidad de los Andes.
  • Sen, A. (1999). Development as Freedom. Oxford University Press.
  • Standing, G. (2011). The Precariat: The New Dangerous Class. Bloomsbury Academic.
  • Alvarez, M. J. (2025). Balancing the playing field: inequality and first generation college. Universidad de los Andes / TREES.
  • Blanco, B. (2025). Let's talk about youth precariousness. Mutant
  • Perdomo, M. (2024). PAR ranking and gender equity in Latin American companies. Aequals.
  • Office of the Mayor of Bogotá (2024). Apples of Care: 2020-2024 Outcomes Report. District Secretariat for Women.
  • González, C. (2025). From the classroom: teachers teaching work and inequality. Universidad de los Andes.
  • Bencomo, Tania Z. (2008). “Labor seen from a social and legal perspective.”. Revista Latinoamericana de Derecho Social, No. 7 (July-December), pp. 27-57. National Autonomous University of Mexico.
  • Becerra, Óscar; Bojanini, Gabriela; Eslava, Marcela; Fernández, Manuel. (2023). “Labor reform and the needs of the Colombian labor market.” Macroeconomic Note No. 51, Faculty of Economics, Universidad de los Andes.
  • DANE (2025). GEIH Technical Bulletin: Informal Labor Market - Quarter January-March 2025. Bogotá D.C. Available at: https://www.dane.gov.co/files/operaciones/GEIH/bol-GEIHEISS-ene-mar2025.pdf
  • El Espectador (2024). “Labor informality in Colombia: women and the countryside, the most affected.” El Espectador, June 21, 2024. Available in: https://www.elespectador.com/economia/macroeconomia/informalidad-laboral-en-colombia-las-mujeres-y-el-campo-los-mas-afectados/
  • International Labour Organization - ILO (2024). Labor Outlook 2024: Latin America and the Caribbean. Geneva: ILO. Available at: https://www.ilo.org/americas/publicaciones/WCMS_904270/lang–es/index.htm
  • The Republic (2025). “Labor market informality stood at 55.9 % between March and May 2025.” The Republic, June 3, 2025. Available in: https://www.larepublica.co/economia/la-informalidad-en-el-mercado-laboral-se-ubico-en-55-9-entre-marzo-y-mayo-de-2025-4177084
  • Infobae (2024). “DANE released figure for informality in Colombia: more and more workers are at risk of losing their pensions.” Infobae Colombia, August 12, 2024. Available in: https://www.infobae.com/colombia/2024/08/12/dane-dio-a-conocer-cifra-de-informalidad-en-colombia-cada-vez-son-mas-los-trabajadores-en-riesgo-de-perder-la-pension/