Challenges in Colombian labor market due to high informality

Colombia's unemployment rate fell to 10.9% in January 2026, according to Dane, marking a 0.8 percentage point improvement from January 2025. Andi president Bruce Mac Master questioned the one-point drop in informality and noted that job growth was driven by non-salaried positions.

The National Administrative Department of Statistics (Dane) released January 2026 labor market data, showing an unemployment rate of 10.9%, a 0.8 percentage point decline from January 2025. Of the 324,000 new jobs created, only 75,000 were salaried positions, indicating that growth was primarily in non-salaried employment.

Bruce Mac Master, president of the Colombian Association of Entrepreneurs (Andi), voiced concerns over high informality levels. He stated: “One of the biggest challenges in the labor market is the high levels of informality. It is not clear how the January results show a one percentage point reduction in informality.” Mac Master also questioned whether the occupancy increase stems from public spending on service provision orders prior to the Guarantees Law, after reviewing results by activity and occupational position.

Despite the lower unemployment rate, labor market participation declined, with 410,000 people becoming economically inactive. The Global Participation Rate stood at 63.6%, and the Occupancy Rate at 56.7%, similar to figures from a year earlier. Overall, Colombia had 23.2 million occupied individuals.

The commerce and vehicle repair sector accounts for 17.2% of workers but lost 149,000 jobs compared to January 2025. In contrast, public administration and defense added 172,000 positions, while professional, scientific, and technical activities gained 155,000 new jobs.

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Joyful diverse Colombians on a Bogotá street celebrating record-low 8.9% unemployment rate since 2001, with job growth billboard.
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Colombia's unemployment rate reaches lowest since 2001

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Colombia's National Administrative Department of Statistics (DANE) reported that the unemployment rate for 2025 was 8.9%, the lowest since 2001. This figure marks a 1.3 percentage point decrease from 2024. In December 2025, the rate fell to 8%, with employed population rising by 603,000 people.

In December 2025, Colombia created 603,000 new jobs, lowering the unemployment rate to 8.0%, a drop of 1.1 percentage points from 2024. Yet, 55.5% of workers, or about 13.45 million people, remain in informal employment. Experts note progress but warn of ongoing structural challenges in the labor market.

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DANE reported a 10.9% unemployment rate for January 2026, the lowest in recent history for a first month of the year, despite a 23% minimum wage increase. Informality dropped to 55%, and the employed population grew by 324,000 people. Yet, these official figures are sparking political polarization.

The National Administrative Department of Statistics (Dane) reported that Colombia's economy grew 2.6% in 2025, below expectations of 2.8%. In the fourth quarter, GDP expanded 2.3%, driven by household consumption, the public sector, and cultural activities like concerts. Investment fell 2.9%, the lowest level in two decades.

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Colombia's manufacturing production rose 1.4% in February 2026 compared to the previous year, but real sales fell 2.5%, according to Dane data. Andi president Bruce Mac Master said the figures show stagnation and that the sector has yet to take off. Employed personnel dropped 0.4%.

Tourist accommodation occupancy in Colombia reached 49.7% in January 2026, per the Dane's Monthly Accommodation Survey. Seven of 12 regions recorded declines in occupancy, along with drops in revenues and employment.

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Colombia's National Administrative Department of Statistics (Dane) reported that annual inflation for January 2026 stood at 5.35%, up 13 basis points from January 2025. Driven by lodging services, restaurants, and food, the figure slightly exceeded market expectations. This data will guide the Central Bank's monetary policy decisions.

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