Informality and self-employment grow in the Dominican Republic

The Dominican Republic is one of the countries with incomplete recovery of labor indicators from before the pandemic (2019), with women experiencing a greater lag. This is demonstrated by the International Labor Organization’s most recent report, “Labor Overview 2022 for Latin America and the Caribbean” (ILO). Despite the region’s economic recovery, labor-force participation fell from 64.9% in 2019 to 62.1% in 2022, employment fell from 60.6% to 59.2%, and unemployment fell from 6.5% to 4.8%, while the informality rate rose from 56 to 57.4% and self-employed workers ranged between 36 and 40%.

“In the Dominican Republic, the informality rate of 57.4 registered in the second quarter of this year (2022) exceeded the value of the same quarter of 56 (2019) by more than 2 percentage points and by nearly 3 percentage points the record at the end of that year,” the report states. He notes that, despite government efforts to protect formal employment, the informality rate in several countries in the region in the second or third quarter of 2022 was comparable to or even higher than that observed in 2019. According to the statistics presented, the regional informality rate (average of 11 countries) was nearly 50% in mid-2022, while in the Dominican Republic, it is 57.4%, with a total of around 59% informal.

The report states that informal employment has accounted for between 40 and 80% of the net increase in work between the third quarter of 2020 and 2022. It points out that given the context of a sharp slowdown in economic growth, job creation may continue to be biased towards the generation of informal jobs.