Friday 9 December 2022

Informal employment rises faster from the crisis

With the pandemic, this sector, which includes salaried workers without insurance, among other types of workers, was the one that fell the most; but their recovery is also more noticeable, while in the formal the rebound has been slower.

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QCOSTARICA – Informal employment was the hardest hit by the economic crisis caused by the new coronavirus pandemic in Costa Rica, and is now the one that is rising the fastest.

Johana Mendoza was left without a job at the hotel where she worked and now she is trying to get ahead by offering massages to the few tourists that come to Tamarindo. Informal employment has recovered but is not reaching pre-pandemic levels. Photo: Rafael Pacheco, taken on November 3. 

This is seen in the results of the Continuous Employment Survey (Encuesta Continua de Empleo – ECE) for the last quarter of 2020 published on Thursday, February 4, by the National Institute of Statistics and Censuses (Instituto Nacional de Estadística y Censos – INEC).

According to the results of the study, the number of informal workers fell sharply by about 346,000 jobs between the first and second quarters of 2020. By the end of the year (in the last quarter of 2020), almost 188,000 had recovered.

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According to the definition used by the INEC, informal employment comprises salaried people who are not registered with social security through their employers; unpaid helpers, and self-employed workers and employers who have unincorporated companies (they are not registered in the National Property Registry and do not keep formal accounts).

For its part, formal employment fell between the first and second quarters of 2020 by about 117,000 jobs and only 20,000 have recovered.

In informal conditions, there are just under half of the country’s workers. In 2019, the average informality for the four quarters was 46%. In 2020, in the second quarter, which was the worst period of the crisis for the labor market, it fell to about 40% and at the end of the year, it rose again to 45%.

The gradual recovery of jobs, both informal and formal, in Costa Rica has helped to alleviate some of the unemployment caused by the crisis.

Unemployment doubled with the pandemic to a peak of 24% in the quarter that ended in June and has had a slight downward trend since. In the last quarter of 2020 it was 20%.

María Luz Sanarrusia, in charge of the Survey, indicated that by branches of activity there has been a recovery in domestic jobs, transportation, and commerce, where there are higher percentages of informality.

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