Status of employment

According to 2020 data, the unemployment rate of young people was twice as high as that of adults and reached 23% on average . (CEPAL 2021, 16)

Unemployment, employment outside the formal sector and underemployment

Among Latin American youth between the ages of 20 and 24, unemployment levels range from 5% in Guatemala to 24.5% in Costa Rica. On average in the region, 14.63% of young people are unemployed. These young people want to work but cannot find employment. This age group is taken into account because it is expected that younger people still continue to attend their primary or secondary education.

Although unemployment varies widely among countries, it is important to compare these figures with their levels of employment outside the formal sector. Guatemala, where unemployment is lowest in the region, has one of the highest levels of informal employment (76.3%). The country with the highest level of young people in informal employment is Peru with 84.7%. According to the ILO, employment outside the formal sector includes workers who produce for household consumption, contributing family workers, and those employed by enterprises whose occupation is not subject to the law. This result of informal work conditions is a lack of social security coverage, lack of entitlement to paid annual or sick leave, and lack of a written contract.

Another relevant indicator is the underemployment rate. That is the percentage of young people who are employed but would like to work more and cannot find additional employment. In general, countries with higher levels of underemployment are those with lower levels of informality. Examples are Chile and Uruguay.

Employment prospects in a changing labor market