Employment Quality Reaches a Record High in Latin America and the Caribbean, but Challenges Remain

The IDB’s Better Jobs Index 2026 shows gains in labor income, while informality and gaps affecting young people in particular continue to limit access to better jobs.

WASHINGTON — Employment quality in Latin America and the Caribbean reached its highest level in 2024, according to an index by the Inter-American Development Bank (IDB), surpassing pre-pandemic levels for the first time. Even so, the region still face significant challenges: seven in ten workers do not contribute to social security, and young people face greater difficulties in accessing good jobs.

These are the main findings of the 2026 edition of the Better Jobs Index, produced by the IDB’s Labor Observatory, which analyzes labor market trends across 17 countries using data from 2010 to 2024.

The regional Better Jobs Index increased from 54.9 to 58.0 points between 2010 and 2024, driven primarily by improvements in income. The indicator measuring whether wages are sufficient to keep workers out of poverty rose from just over 40 points to more than 50 during this period. The indicator measuring employment quantity remained stable at 75.4 points. Despite these gains, progress in job quality remains insufficient, at just 40.6 points out of 100: informality stood at 69%, and approximately half of the working-age population still faced labor poverty.

“Latin America and the Caribbean has made important progress in employment quality and job creation, but not necessarily in transforming jobs. The record level we see today also shows how much remains to be done,” said Oliver Azuara, Labor Market Specialist of the IDB. “Half of the region’s workers continue to be in informal employment and earn incomes that do not allow them to escape poverty,” Azuara added.

The Index measures, on a scale of 0 to 100, how many people are working and the quality of their jobs. It combines two dimensions: quantity, which considers how many people participate in the labor market and how many are employed; and quality, which considers whether those jobs are formal and provide sufficient income for households to rise above the poverty line. A country scoring 100 points would have its entire working-age population employed in formal jobs with sufficient income. The IDB’s Labor Observatory calculates the Index using household survey data, with a comparable series dating back to 2010.

The findings point to a challenge that goes beyond creating new jobs. While differences across countries in employment quantity have narrowed, gaps in job quality have widened. This dynamic underscores the need to accelerate the transformation of existing jobs into higher-quality employment.

The report identifies five priorities for moving in this direction: reducing informality; expanding social protection and pension coverage; scaling up best practices developed in the region; strengthening skills development in coordination with the private sector; and leveraging artificial intelligence to boost productivity and improve employment quality.

Progress across the region has been uneven. Young people continue to face greater challenges both in accessing the labor market and in finding quality employment.

In 2024, the gap between young people and adults reached 13.6 points in employment quality and 6.3 points in quantity. The quality gap is evident across all countries covered by the report: once they enter the labor market, young people tend to work in less formal jobs, with lower incomes and less social protection.

Men continue to have higher labor force participation and employment rates. The results show that these differences are concentrated primarily in access to the labor market, rather than in employment conditions once women enter it.

Download the publication