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February 22, 2025
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Colombian labor market: between informality and self -employment

Labor reform could increase unemployment and informality, according to analysis

A week after the country knows how the labor market started in 2025 and with the consolidated data of what happened in this aspect in this aspect, unemployment and labor informality are two issues that attract the attention of experts in the matter, since although the economy is enduring, The generation of new jobs, formal, seems to stagnate.

While the unemployment remains in a digit, the fact that still half From the employment that is created in Colombia, it does not enjoy the rights required by law as a formal contract, parafiscal payments, affiliation to health, pension and professional risks or payment of premiums and severance, it is a reality that cannot be overlooked .

More information: Economic projections 2025: Moderate optimism is increasingly accentuated

Due to this, for Camilo Herrera, founder of the Raddar firm, understanding labor informality in Colombia must be a priority in the midst of the various lines of research that currently exist to understand the country’s economy from the way in which the resources that move development.

In this regard, he points out that in 2024, Colombia had an average of 22.9 million employed, of which 55.9% were informal, according to the DANE, which, said Herrera himself, “defines informality considering two aspects: The size of the company in the case of independents and the condition of the workplace for employees ”.

In this way, he said, they establish four categories, starting with microenterprises (up to 10 workers), small businesses (from 11 to 50), medium -sized companies (51 to 200) and large companies (more than 200). This economist was given the task of reviewing the composition of the labor market in each of these and was able to verify “two great realities” in the labor market.

Informality,

“First, 41% of those employed in Colombia are self -employed and 55.9% of the employed are informal, ”said Herrera.

He then reported that “medium and large companies (more than 50 employees) generate 60% of formal employment in the country, but only employ 27.6% of workers. This makes it clear that the problem of informality is concentrated in micro and small businesses, and especially in self -employment. ”

More information: These are the social programs of the national government assumed Bogotá

With this reality on the table, he indicated that the real challenge to work and that from his perspective is overlooking, is that few small businesses manage to grow and become medium and must Hire employees according to their financial capabilities so as not to go bankrupt.

“In addition, many self -employed are people who do not find work in the formal market and end up searching. On the other hand, micro and small businesses employees often accept jobs sacrificing formality (64% of them), ”said the founder of the Raddar firm.

Informality

Informality was reduced to men, but increased for women.

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For this analyst, the great challenge is how to make these entrepreneurs They formally hire, when many of these companies are not even formal and legally they are not obliged to be and propose several exits to overcome the issue, beginning to formalize micro and small businesses.

“Also create more jobs and more companies to reduce self -employment and foster a culture in which workers demand to be hired formally. This problem has not changed much in years. Informality persists because it has allowed many companies not to be formal, as a way of protecting the most vulnerable, ”he said.

The analysis closed leaving on the table that the possible implementation of a universal health and pension system could lead to many people to continue seeing informality as a viable strategy, trusting that it will be the State who assumes costs. But he warns that, ultimately, “this implies that all Citizens end up paying for a model that perpetuates labor precariousness. ”

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