Peru struggles with a significant informal labor market, where only three in ten workers hold formal employment. This informality leads to low productivity, hindering improvements in living standards and economic growth. The high rate of informal employment in Peru, at 71% in 2024 according to INEI, far exceeds that of other countries in the region, as reported by the ILO.
The disparity in productivity between formal and informal sectors is substantial. The IPE estimates that a formal sector worker produces over six times more than an informal sector worker. The World Bank notes that informal companies lack incentives to formalize due to insufficient potential benefits compared to perceived costs.
Young workers are disproportionately affected by informality. Sixty percent of workers under 30 are informally employed, double the rate for older adults. High non-wage labor costs, around 70% of the average formal sector salary, further exacerbate the issue. The Congress's proposals to increase profit-sharing percentages could worsen the situation.
While higher education can improve earnings and reduce the risk of informality, simply increasing university enrollment without ensuring quality may be counterproductive. The proportion of professionals in jobs not requiring higher education has risen. It's crucial to focus on ensuring students complete quality education, as technical studies may offer a more profitable path for some.
Policymakers should prioritize measures that facilitate the transition to formality, benefiting Peruvian workers, especially vulnerable groups like young people and those with lower education levels.