Latin American Economy & Business - March 2016 (ISSN 1741-7430)

A long-standing feature of Latin American and Caribbean economies has been a high level of informality, defined as the proportion of the labour force that works outside the tax and benefits system. Despite some reductions during the commodity boom decade, it is estimated that nearly half the region’s workforce remains informal, and the proportion may be edging up as a result of the current recession. Here we examine the impact of informality on living standards, productivity, economic growth, and corruption.