How, Why and in What Sectors Employment Informality Decreased in Argentina from 2003 to 2012

In a brief period of time after the 2001-2002 crisis, there was a dramatic fall in informal salaried employment in Argentina. Informal employment – also called “non-registered employment” – refers to employment for which no social security contribution is made. This indicator dropped by fifteen percentage points, from 49% to 34% from 2003 to 2012. This paper analyzes the recent evolution of informal employment and the main policies designed to reduce its scope and to encourage the creation of quality employment. It has been observed that the decline in informal employment, measured as non-registered salaried employment, is primarily due to net creation of formal employment and, to a lesser extent, to net destruction of non-registered employment. The rate of informal employment declined in all sectors of the economy and in establishments of all sizes. Extensive mobility between non-registered salaried employment and inactivity (mainly among low-skilled women workers) has been observed as well and, albeit to a lesser extent, between non-registered salaried employment and formal employment. Since most informal workers are unskilled and perform their jobs in work units that are difficult for public policies to identify, a comprehensive policy approach is necessary, one that considers economic, social and employment issues