Paraguay's labor market shows high informality despite job growth

Paraguay's labor market continues to be dominated by informal employment, according to the latest report from the National Statistics Institute (INE). In the second quarter of 2026, non-agricultural employment saw an increase of 128,745 new positions, bringing the total to 2,845,646 workers. However, the INE's Permanent Household Survey revealed that the vast majority of this growth, nearly 75,000 jobs, were in the informal sector.

Overall, 61.6% of occupied workers, or 1,753,316 individuals, are classified as informal. These workers lack social security contributions and are not registered with the national tax authority. This figure represents a slight increase from the same period last year, when informal employment stood at 1,679,009, though the percentage of the total occupied workforce remained consistent.

In contrast, formal non-agricultural employment grew by a more modest 57,000 new positions, reaching 1,090,118 workers. This disparity underscores the persistent and strong influence of informality within Paraguay's job market. The INE's definition of informal employment aligns with International Labour Organization (ILO) recommendations, including independent workers not registered with the tax authority and dependent employees not contributing to pension or retirement systems.

The report further breaks down informality by region. In rural areas, approximately 7 out of 10 non-agricultural workers, totaling 397,253, are informal. Urban areas show a similar trend, with about 6 out of 10 occupied workers, or 1,356,063 individuals, in informal roles, compared to 939,396 formal workers.

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El citado reporte reveló que al segundo trimestre la ocupación no agropecuaria aumentó en 128.745 nuevos puestos al segundo trimestre y abarcando a un total de 2.845.646 trabajadores, sin embargo, el mayor incremento se dio en la franja informal