- Employment quality reached its highest level since 2010, at 41 out of 100 points, although it remains below the midpoint of the scale, according to the IDB's Better Jobs Index.
- Seven in ten workers do not contribute to social security or save toward a pension.
- At the current pace, it would take 95 years to close the employment gap between men and women.
Employment quality in Latin America and the Caribbean has reached its highest level since the IDB's Better Jobs Index was introduced, surpassing pre-pandemic levels for the first time. Even so, with a score of less than 41 points out of 100, the region continues to face significant challenges related to formal employment and social protection: seven in ten workers do not contribute to social security, and substantial gaps in employment quality persist, particularly among young people. These are some of the main findings of the 2026 edition of the index, which analyzes 17 countries using 2024 data.
Consider a 23-year-old woman who is self-employed or delivers orders through a digital platform. Her earnings may be enough to keep her out of poverty, but that does not necessarily mean she has access to social security. If she becomes ill or stops working, she may lack protection to replace her lost income. And if she does not contribute to social security, she is not accumulating pension savings for retirement.
This situation reflects a persistent reality across the region: progress in reducing poverty does not always translate into greater social protection for workers. In this blog post, we explore what the data reveal.
The Better Jobs Index is an IDB measure that assesses, on a scale from 0 to 100, not only how many people work but also the quality of their jobs. It combines two dimensions: quantity, which measures labor force participation and employment, and quality, which considers whether jobs are formal and provide sufficient earnings to lift households out of poverty.
A country scoring 100 points would have its entire working-age population employed in formal jobs with sufficient earnings. The IDB's Labor Observatory calculates the index using household surveys and maintains a comparable data series dating back to 2010.
The results show that Uruguay (72.2), Chile (69.9), and Brazil (64.4) lead the index in 2024. At the other end of the distribution are Guatemala (46.6) and Honduras (41.2). Mexico scores 58.6 points, slightly above the regional average.
Differences across countries are much greater in employment quality than in quantity. Quality scores, for example, range from 14.6 to 64.0 points, a gap of more than 49 points. By contrast, the difference between the highest and lowest quantity scores is less than 13 points.
This shows that high employment levels do not necessarily mean that jobs are formal or provide sufficient earnings. Peru, for example, scores 78.8 points in quantity but only 29.2 in quality. Bolivia and Paraguay, which also rank among the highest in employment quantity, fall below the regional average in quality.
Country | Overall Index | Quality | Quantity |
Uruguay | 72.2 | 64.0 | 80.4 |
Chile | 69.9 | 62.5 | 77.4 |
Brazil | 64.4 | 54.4 | 74.4 |
Costa Rica | 63.7 | 56.7 | 70.7 |
Argentina | 62.0 | 45.0 | 79.1 |
Dominican Republic | 60.6 | 45.3 | 76.0 |
Paraguay | 59.8 | 39.4 | 80.1 |
Panama | 59.4 | 44.3 | 74.5 |
Mexico | 58.6 | 40.8 | 76.3 |
Bolivia | 58.4 | 36.4 | 80.5 |
Latin America and the Caribbean | 58.0 | 40.6 | 75.4 |
Colombia | 57.7 | 40.9 | 74.6 |
Ecuador | 55.9 | 35.4 | 76.4 |
Peru | 54.0 | 29.2 | 78.8 |
El Salvador | 53.2 | 35.1 | 71.3 |
Guatemala | 46.6 | 22.2 | 71.0 |
Honduras | 41.2 | 14.6 | 67.7 |
Note: The Better Jobs Index is calculated as the weighted average of four indicators: labor force participation, employment, formality, and earnings sufficient to lift households out of poverty. The first two make up the quantity dimension, while the latter two make up the quality dimension. The index is expressed on a scale from 0 to 100 and covers people aged 15 to 64, excluding full-time students who are neither employed nor seeking work.
Higher earnings account for most of the improvement in employment quality across Latin America. Between 2010 and 2024, the indicator measuring whether labor earnings are sufficient to lift households above the poverty line rose from just over 40 to more than 50 points, its highest level since measurements began.
Formality has seen the least progress, increasing from 27 to 31 points between 2010 and 2024. Today, 69% of workers in the region do not contribute to social security. This can leave them with limited protection against risks such as illness or job loss, while also preventing them from accumulating pension entitlements for retirement.
This challenge becomes more pressing every year. The region is aging rapidly, and workers who do not contribute to social security today face a greater risk of reaching old age without a contributory pension and having to rely on publicly funded noncontributory pensions.
Rising earnings show that the region can improve workers' incomes. The challenge now is to ensure that their jobs also provide protection.
Insufficient earnings also remain a significant challenge. Half of the working-age population lives in households whose income falls below the poverty threshold of $1.95 per person per day.
Gaps in employment outcomes between men and women have narrowed since 2010, although progress has varied across indicators. The overall index gap declined from 24 points in 2010 to 21 points in 2024. If progress continues at the observed pace, closing this gap would take approximately 95 years.
Most of the improvement reflects increases in women's labor force participation and employment: the quantity gap narrowed from 31 to 26 points. In contrast, the quality gap—which reflects formal employment and sufficient earnings—declined by just one point, from 17 to 16 points.
Difference in points between men and women, 2010–2024
Workers under 25 face greater labor market challenges than adults, scoring nearly 10 points lower on the overall index. Most of this difference is concentrated in employment quality rather than quantity, reflecting disparities primarily in access to formal jobs that provide sufficient earnings and social protection.
Countries with the highest overall index scores do not necessarily have the smallest gaps between young people and adults. In Uruguay and Chile, which lead the index, the employment quality gap between the two groups exceeds 20 points.
Costa Rica and the Dominican Republic, by contrast, record the smallest quality gaps, at 6.8 and 9 points, respectively. In Costa Rica, young people even score slightly higher than adults in employment quantity, with a gap of −0.9 points.
These results point to a clear agenda: the challenge is not only to create more jobs but also to improve the quality of existing employment.
This means making it easier for workers and businesses to formalize employment, expanding social protection, strengthening the links between skills development and employment, and leveraging new tools, such as artificial intelligence, to boost productivity and better respond to labor market needs.
The region has already demonstrated that it can improve workers' earnings. The next step is to ensure that these gains reach more people and are accompanied by better working conditions.
Explore the Better Jobs Index 2026 publication to learn more about the findings and access the complete data.