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Jobs are the main driver of poverty reduction. They help build more resilient and self-sufficient societies, reduce the need for humanitarian aid, and address the root causes of unrest and migration. Jobs were the key to fighting poverty in Latin America during its last period of sustained poverty reduction (2009-2014): strong employment creation and wage growth drove two-thirds of the decrease in poverty rates. After this prosperous timeframe, both poverty and labor market conditions have remained largely stagnant across the region (COVID-19 aside).
The May 2025 edition of the Regional Jobs Update provides new insights into the barriers to the creation of more and better jobs across Latin America (LAC). This report uncovers the multifaceted challenges shaping the region's labor market.
Here are eight critical findings from our latest publication:
Key Fact #1: Despite having the lowest economic growth among global regions since 2015, LAC’s employment growth kept pace with that of countries in other regions. This disconnect suggests that LAC is creating jobs without improving productivity, which may explain the region’s persistently low job quality indicators.
Key Fact #2: Between 2016 and 2024, LAC generated about 27 million net new jobs. Retail and hospitality surged (+7.9 million jobs), while education, health and personal services expanded robustly (+7.3 million), together accounting for over half of all new positions. Larger firms (more than 5 employees) led job creation with 11.1 million new net positions, while small enterprises contributed 7.9 million. The growth in new salaried positions was more than double the increase in jobs in self-employment (18.6 million). The region added 1.6 million new employers/entrepreneurs, while unpaid work declined by 900,000 jobs.
Number of Jobs Created in LAC by Category, 2016–24
Key Fact #3: Youth unemployment across LAC plunged 5.4 percentage points since 2016, yet remains high at 14 percent—double the overall rate. The share of young people “Not in Employment, Education, or Training” (NEET) has also declined, reaching 18.3 percent in 2024. However, this rate exceeds the average for upper-middle-income countries (16.6 percent).
Key Fact #4: In the past decade, LAC has seen a transformation in its workforce, with millions of citizens climbing the educational ladder. Jobs among middle- and high-skilled workers expanded more rapidly than their respective population segments, highlighting a clear shift toward a more educated workforce. In contrast, workers with low levels of education saw job losses exceeding their population decline.
Key Fact #5: The workforce's increasing educational attainment coincided with a diminishing premium for skilled labor. This phenomenon suggests that the relative demand for skilled workers did not keep pace with their increasing supply. As a result, workers’ increased educational attainment did not translate into higher average labor incomes.
Key Fact #6: High-frequency data on skilled worker hiring indicates that the region has not yet returned to pre-pandemic hiring growth levels. The patterns of job creation observed in Labor Force Surveys mimic those from LinkedIn Hiring Rate (LHR), with an important distinction. The latter remained stuck below 2017 levels as of February 2025, signaling an incomplete labor market recovery. The discrepancy suggests that while LAC has been able to create jobs in general in recent years, it struggled in the higher-skilled, tech-forward sectors captured by LinkedIn data.
Key Fact #7: Despite a shift from unskilled self-employment and unpaid work toward skilled and salaried positions during the last decade, a significant share of the new wage employees lack pension or health insurance benefits. While informality declined by 2.3 percentage points in the last decade when defined by salaried employment in microfirms, unskilled self-employment, or unpaid work, the share of wage employees without pension or health benefits increased by 0.6 percentage points.
Key Fact #8: Wage and labor earnings grew (modestly) despite stagnant productivity. LAC's wage growth aligned with global comparators in similar economic positions, though most comparable economies achieved higher productivity gains than their LAC counterparts. This suggests a potentially weaker labor demand, on average, in LAC. At the same time, rising minimum wages in some of the largest LAC economies during this period may help explain the gap between earnings and productivity growth.
These patterns suggest that while the LAC region was able to generate more jobs during the last decade, it struggled to create better jobs with higher earnings, productivity, and improved benefits.
For more in-depth analysis and information, read our May 2025 edition of the Regional Jobs Update.
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