Informality, labour transitions and the livelihoods of workers in Latin America

Abstract

The main aim of this chapter is to carry out an in-depth study of the structural characteristics of the different segments of informal and formal workers, and their changes during the new millennium in six Latin American countries -Argentina, Brazil, Ecuador, Mexico, Paraguay and Peru-, from a comparative and dynamic perspective. In particular, this study: (1) assesses the intensity of occupational turnover, focusing on the movements between informal and formal employment; (2) estimates the likelihood of different segments of informal workers moving to a better position inside informal employment or to a formal occupation; (3) assesses the impacts of labour mobility on the wage dynamics.The results show that in all the countries considered wages are the highest for formal workers and the lowest for lower-tier informal jobs. Two contrasting labour mobility patterns are found: on the one hand, the proportion of formal workers who maintain the work status of origin or move up the job ladder is significantly higher than the proportion who transition into lower-paying work statuses; on the other hand, despite the high labour turnover experienced by lower-tier informal wage employees, most of them failed to move up the wage ladder.