Expanding Social Protection and Addressing Informality in Latin America

Informality is one of Latin America's most persistent challenges, shaping the lives of millions of workers and their families. Nearly half of the region's labour force works outside formal arrangements, without secure contracts, stable incomes, or access to social protection. The COVID-19 pandemic exposed the vulnerabilities of these workers with stark clarity: while formal employees often retained coverage and income support, informal workers were left among the hardest hit by job losses, poverty, and exclusion. This book takes stock of the evolution of informality in Latin America, tracing long-term trends and exploring the many faces of informality — from self-employed street vendors and domestic workers to employees in small enterprises. It places particular emphasis on the fragmentation of current employment-based social protection systems, which not only leave large gaps in coverage but also perpetuate inequality of opportunities and limit productivity. Bringing together new evidence and in-depth country studies from across the region, the book makes a compelling case for reform. It explores policy options to expand social protection in fiscally sustainable ways, increase incentives for formalisation, and strengthen resilience against future shocks. For policymakers, researchers, and practitioners alike, this volume offers timely guidance to deliver better social protection for more workers in Latin America.