The Colombian labor market saw a significant drop in unemployment rates, falling to 9% from the previous year’s 10.3% in May, with the creation of 597,000 new jobs. While this seems like good news at first glance, there is a catch that needs attention. Most of these new jobs are self-employed, and a considerable proportion exist in informal conditions—without contributions to health or pension systems—creating a “growth trap
” within the labor market.
Digging deeper into the data reveals that over 200,000 of the new jobs created in the past year were informal. This means that almost one-third of employment growth occurred outside the minimum formalization standards, depriving workers of essential benefits. Recent figures from the Household Integrated Survey show that out of 23.58 million employed individuals between February and April 2025, only 9.94 million contribute to pensions and 10.8 million to healthcare under the contributory regime.
To understand this situation better, let’s hear from experts who shed light on Colombia’s labor landscape amid this rise in self-employment.
Juan Carlos Guataquí, an economist specializing in labor markets, points out that while not all self-employment is precarious work, over 70% of self-employed individuals operate informally without contributing to health insurance or pension funds. He highlights that eight out of ten new jobs are self-employed, with at least 64 being informal—a concerning trend indicating structural weaknesses rather than progress.
Guataquí emphasizes how ongoing labor and pension reforms fail to address this issue effectively since they mainly focus on salaried employees without considering informal workers: “
Reforms serve as hardware; however, without supportive software (development plans, economic dynamics), legislative changes remain symbolic.
”
Juliana Morad from Javeriana University’s Labor Law Observatory adds nuance by stating that not all self-employment equates to survival gigs; it also includes sustainable professional ventures. However, she warns against over-reliance on self-employment as it may signal a lack of stable jobs with social protection: “
Concentration on self-employed workers alone may indicate insufficient job stability.
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Stefano Farné from Externado University’s Labor Market Observatory notes a predominance of formal growth (11.2%) among self-employed individuals compared to informal sectors (5.9%). Still, he acknowledges that most (84%) remain informal.
Farné offers an interesting perspective by suggesting some people may prefer informality for flexible hours or part-time work but acknowledges concerns if those capable of formal employment opt for self-employment instead.
Alejandra Soler from Quintero y Quintero Asesores draws attention to how informal work hampers stability and rights enforcement outlined by the International Labour Organization (ILO). She stresses how these practices strain social security systems’ sustainability and widen social disparities: “Self-employment reflects individual responses due to limited formal job opportunities but also exposes structural deficiencies deepening inequality.”
Despite Colombia’s job creation efforts reducing unemployment figures and increasing occupation rates—a paradox emerges within self-employment revealing underlying fragility threatening social security sustainability and fiscal equilibrium impacting societal equity within Colombia’s framework.”
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