Beyond the Hustle - Informal Labor in Colombia and the Importance of Diverse Social Protection Pathways
- Feb 16
- 3 min read
Working is not enough: more than half of the people in the informal sector live in poverty and only 42% contribute to a pension.
Bogotá, February 17, 2026. In Colombia, having a job does not guarantee escaping poverty or ensuring a secure old age. Nearly 13 million people work in the informal sector, and more than half of them live in extreme poverty. Furthermore, only 42% of the employed population contributes to a pension plan, and a mere 4.8% of those working informally have coverage against workplace risks.
Far from being a temporary situation, this reality persists over time and reveals a structural problem in the labor market that cannot be solved solely by generating formal employment across multiple sectors. This is the conclusion of the new study, " Beyond Hustling: Labor Informality in Colombia and the Importance of Diverse Social Protection Pathways," published by the Alliance for Labor Inclusion.
The document points out that, although the country is making progress in reducing unemployment, this has not translated into jobs with guarantees, which reproduces cycles of poverty, inequality and vulnerability, especially among women, young people, rural populations, ethnic communities and migrants:
“The problem isn’t a lack of effort on the part of those working in the informal sector, but rather a system still designed for stable, linear career paths that don’t reflect the reality of millions of people. Even if incomes are variable, protection must always be present, and formalization must begin with the recognition of the country’s labor diversity,” states Adriana Lloreda, Leader of the Alliance for Labor Inclusion.
In rural areas, informality exceeds 80% , and in departments like La Guajira, Córdoba, and Chocó, informality rates are above 71%, well above departments like Antioquia and Cundinamarca where it is less than 50%. This territorial reality reinforces the need for differentiated and flexible policies that recognize local production dynamics and allow for progress in adapted social protection schemes.
Likewise, the gaps are even deeper for certain populations: informal employment reaches 57% among young people, is around 70% for people over 55 years of age, people with disabilities and the Afro-Black, Raizal and Palenquera population, and reaches 82% in the indigenous population and migrants from Venezuela.
The analysis shows that there is a wide diversity of occupations, career paths, and combinations of formal and informal work that are often not recognized by current social protection schemes, such as:
Farmers, caregivers, artists, independent drivers, beauticians, and shopkeepers, among others, are part of the informal sector. Approximately 62% of self-employed workers operate in the informal economy, and of those, nearly 80% work in trades such as plumbing, transportation, or personal services. In this context, insisting that traditional formalization will absorb all informality is unrealistic and postpones urgent decisions.
Faced with this situation, "Beyond Hustling" proposes rethinking formalization as a gradual, flexible, and people-centered process. Among its main recommendations are the effective implementation of proportional affiliation mechanisms based on hours worked or events, the reduction of barriers to entry into the contributory system through differentiated contribution floors, the strengthening of productive inclusion with a territorial and differentiated approach, and the recognition of diverse work trajectories through the certification of non-formal skills.
“The challenge is no longer identifying the problem, but deciding how to address it. The State, the productive sector, and social and civil society organizations must assume the shared responsibility of promoting gradual, sustainable solutions adapted to the diversity of work in Colombia,” concludes the Alliance for Labor Inclusion.
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About the Alliance for Labor Inclusion
The Alliance for Labor Inclusion, an initiative formed by the Corona Foundation, the National Association of Business Owners of Colombia (ANDI), through its Foundation, the Promigas Foundation, and the United Nations Development Programme (UNDP). We invite you to follow us on social media for more information and resources: LinkedIn , Instagram , Includere .
