Labor informality during the pandemic: Crisis and recovery in Mexico

Abstract

Informality is a structural feature of the Mexican labor market of great quantitative and qualitative importance. However, largely due to the confinement of the population, millions of informal jobs were lost in the first months of the pandemic, leading to the relative formalization of the labor market. Subsequent percentages of informality have reached the same levels as prior to the economic crisis. In this article we analyze the evolution of informality during the first year of the pandemic and examine its determinants during this period using a logit model. The analysis illustrates some of the characteristics of the uneven recovery of the Mexican labor market.