A. M. 
El Salvador is positioned among the Latin American countries with the highest rate of informal employment, reaching 70%, according to a recent report by the Comisión Económica para América Latina y el Caribe (CEPAL). This percentage is well above the Latin American average of 55.6%, being one of the highest figures in the region, only behind countries such as Bolivia, Honduras and Guatemala.
The study, entitled Latin America and the Caribbean facing the traps of development: indispensable transformations and how to manage them, stresses that informality is a structural characteristic of labor markets in Latin America.
Although micro, small and medium-sized enterprises (SMEs) account for 99% of El Salvador’s productive fabric, their low productivity compared to large companies limits their capacity to offer formal, well-paid jobs. ECLAC points out that the strengthening of productive chains and the internationalization of SMEs are fundamental to improving labor conditions and reducing informality.
In contrast, countries such as Uruguay and Chile have much lower rates of informality, with more than 20% and 25%, respectively. These figures reflect more effective policies for labor formalization, something that countries with high rates of informal employment, such as El Salvador, should adopt to address this problem.
In El Salvador, the creation of policies that encourage the formalization of employment, together with support for SMEs in their integration into international markets, could be a key solution to improve the quality of employment and reduce inequality.
