The national unemployment rate was 8.2% in November 2024. With this result, unemployment in Colombia maintains its downward trend, thus completing three consecutive months in which a decrease in the indicator is recorded.
The index also showed a reduction compared to the same month last year, when it was 9%. In other words, it fell 0.8 percentage points (pp).
Although these figures reflect positive behavior, other labor market data does not seem to be heading in the same direction. The question is: why?
Unemployment drops, but…
The first fact that draws attention is informality. According to the report of the National Administrative Department of Statistics (Dane), for the eleventh month of the year, The proportion of the informally employed population remained stable in the national total at 55.2%.
That is, while the unemployment rate has experienced a decrease in recent months, the informality rate has not managed to fall below 55%. In fact, for November this showed a slight increase of 0.4 pp in the 13 cities and metropolitan areas, and 0.3 pp in the 23 cities and metropolitan areas.
The participation rate is another indicator that has not experienced significant changes.
It is currently around 63.7%, which, compared to the pre-pandemic average of 67.3%, shows a three percentage point decline in market share. In other words, although job creation has increased, fewer Colombians are offering their labor.
(See: With the increase in the minimum wage, how much should you pay a domestic employee?)
Unemployment in Colombia
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(Read more: ‘A New Year’s gift’: Petro celebrates new reduction in unemployment in Colombia)
What is the reason?
According to Jackeline Piraján, Scotiabank Colpatria economist, factors such as migration, the inflow of remittances and other complements could be discouraging certain people from entering the labor market. We must also take into account the contexts in which this participation is taking place.
“This panorama raises several reflections. Firstly, although it is encouraging to observe a decrease in the unemployment rate, it is essential to analyze why fewer and fewer people are offering their services to the labor market”he indicated.
Piraján pointed out that to this analysis we must add the gender dynamics present in these figures. In that sense, the data show that the majority of those who leave the workforce are women, since, “although jobs are being created, many of them remain in the informal sector.”
(See: Unemployment in Colombia: how the labor market did in November)
Informality.
Alexis Múnera
In this context, he indicated that “Although the public sector has led job creation efforts, it is pertinent to question what the private sector is missing to boost the generation of new jobs.” With this scenario, the expert pointed out that next year it will be crucial to analyze the quality of the jobs generated and understand social dynamics in order to contribute to the improvement of the labor market.
PORTFOLIO
