Informal employment surpasses 1.75 million in Paraguay during Q2

Paraguay's labor market saw an increase in employment during the second quarter of 2026, with a year-on-year expansion of 4.7%. However, the majority of these new positions were created under informal working conditions, raising concerns about social security and tax contributions.

The National Statistics Institute's Continuous Household Survey revealed that non-agricultural employment reached 2,845,646 people. Of this total, informal employment grew by 4.4% to 1,753,316 workers, accounting for approximately 57.7% of the total employment growth. Formal employment increased by 5.6%, adding 57,435 workers to reach 1,090,118.

Despite the higher percentage growth in formal employment, the absolute number of new informal jobs surpassed those in the formal sector. Consequently, informality represented about 61.6% of non-agricultural employment in the quarter, a slight decrease from 61.8% in the same period of 2025, but still indicating that more than six out of ten workers operate outside formal structures.

Urban areas showed a slight improvement in the informality rate, with informal employment representing 59% of non-agricultural jobs, down from 59.4% a year prior. Conversely, rural areas presented a more complex picture, with informal employment growing by 7.5% to 397,253 people, while formal rural employment increased by a smaller margin. This trend highlights a persistent challenge in translating job creation into broader economic security and fiscal contributions for the country.