Executive Summary
Informal employment accounts for a significant share of the labor force in Latin America, with millions of workers engaged in low-income, unregulated, and vulnerable occupations. Informal workers—such as street vendors, domestic workers, small-scale farmers, construction laborers, waste pickers, gig workers, and home-based producers—often lack access to formal training, social protection, financial services, and career advancement opportunities.
The Skills Development for Informal Workers in Latin America project aims to enhance the productivity, income stability, and economic resilience of informal workers through targeted skills training, digital inclusion, entrepreneurship support, and pathways toward formalization. The initiative will adopt a flexible, community-based, and market-driven approach tailored to local labor market needs.
Over a 36-month period, the project will directly support 15,000 informal workers across selected countries in Latin America, with a strong focus on women, youth, migrants, and indigenous populations. The project aligns with SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities), SDG 4 (Quality Education), and regional employment strategies.
Background and Rationale
Informality remains one of the most pressing labor challenges in Latin America. In many countries, over half of the workforce operates in the informal economy. While informal work provides income for millions, it is often characterized by:
The COVID-19 pandemic exposed the vulnerability of informal workers, many of whom lost income without safety nets. Additionally, rapid digitalization and technological shifts risk further marginalizing workers without digital skills.
Investing in skills development tailored to informal workers can improve productivity, income, and resilience while creating pathways toward formalization and inclusion in broader economic systems.
This project recognizes the diversity of informal work and promotes flexible, inclusive, and locally adapted training models.
Project Goal and Objectives
Overall Goal
To enhance economic resilience and income opportunities for informal workers in Latin America through market-relevant skills development and inclusive support systems.
Specific Objectives
- Provide accessible, demand-driven skills training for informal workers.
- Improve digital literacy and technology adoption.
- Support entrepreneurship and business formalization pathways.
- Strengthen access to financial services and markets.
- Promote social inclusion and labor rights awareness.
Target Beneficiaries
The project will prioritize:
- Street vendors and market traders
- Domestic workers
- Construction and day laborers
- Waste pickers and recyclers
- Gig and platform workers
- Informal agricultural workers
- Women and youth in informal sectors
- Migrants and indigenous populations
At least 60% of participants will be women and youth.
Project Components and Activities
- Component 1: Market-Driven Skills Training
- The project will conduct labor market assessments to identify high-demand skills in each country. Training areas may include:
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- Construction and technical trades
- Hospitality and tourism services
- Sustainable agriculture and food processing
- Repair and maintenance services
- Creative industries
- Green jobs (recycling, renewable energy maintenance)
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- Component 2: Digital Skills and Financial Literacy
- Digital inclusion is critical for informal workers to access markets and services.
- Activities include:
- Basic digital literacy training
- Use of smartphones for business promotion
- E-commerce platform onboarding
- Digital payment systems training
- Financial literacy and bookkeeping workshops
Expected Outcome: At least 10,000 participants adopt digital tools to support income generation.
- Component 3: Entrepreneurship and Business Support
- For self-employed informal workers, the project will provide:
- Business development training
- Support for business registration and formalization
- Mentorship and coaching
- Access to micro-grants or startup capital
- Collective enterprise formation support
- For self-employed informal workers, the project will provide:
The project will encourage cooperative models for waste pickers, artisans, and street vendors to improve bargaining power.
- Component 4: Access to Finance and Market Linkages
- Activities include:
- Partnerships with microfinance institutions
- Credit readiness programs
- Savings group formation
- Market linkage facilitation
- Participation in local trade fairs
- Activities include:
By connecting workers to markets and financial institutions, the project enhances sustainability.
- Component 5: Social Protection and Labor Rights Awareness
Collaboration with local governments and civil society organizations will help expand coverage.
- Component 6: Policy Dialogue and Institutional Strengthening
- To create systemic change, the project will:
- Engage labor ministries and municipal authorities
- Promote recognition of prior learning systems
- Advocate for inclusive vocational training policies
- Support integration of informal workers into national employment strategies
- To create systemic change, the project will:
Implementation Strategy
- Phase 1: Assessment and Partnership Building (Months 1–6)
- Labor market analysis
- Stakeholder consultations
- Baseline survey
- Establishment of local partnerships
- Phase 2: Training and Capacity Building (Months 7–24)
- Launch of training programs
- Digital inclusion initiatives
- Business support services
- Financial literacy sessions
- Phase 3: Market Integration and Formalization Support (Months 25–32)
- Facilitate market linkages
- Support formal registration processes
- Strengthen cooperative
Expected Outcomes
- Increased income and productivity among informal workers.
- Improved access to digital and financial services.
- Higher rates of business formalization.
- Enhanced employability and certification recognition.
- Increased access to social protection mechanisms.
- Reduced economic vulnerability among marginalized groups.
Monitoring and Evaluation
A results-based framework will guide implementation.
Key Indicators
- Number of workers trained and certified
- Percentage increase in income among beneficiaries
- Number of businesses formalized
- Digital tool adoption rates
- Access to financial services
- Enrollment in social protection programs
Mid-term and final evaluations will assess effectiveness and scalability.
Data Collection Methods
- Baseline and end-line surveys
- Training attendance and completion records
- Income tracking surveys
- Financial institution partnership reports
- Focus group discussions
- Case studies
- Government administrative data
Data will be disaggregated by gender, age, ethnicity, and sector.
Sustainability Plan
Sustainability will be achieved through:
- Partnerships with local vocational institutions
- Institutionalization of training programs
- Strengthened worker associations
- Integration into municipal employment programs
- Revolving microfinance mechanisms
- Policy adoption and scaling
Community ownership and local government engagement will ensure long-term impact.
Budget Summary (Indicative)
Major cost categories include:
- Curriculum development and training delivery
- Mobile training units and equipment
- Digital literacy programs
- Micro-grants and seed capital
- Monitoring and evaluation
- Personnel and administrative costs
- Policy dialogue and dissemination
Conclusion
Informal workers are vital contributors to Latin America’s economies but remain vulnerable due to limited skills, financial access, and formal recognition. Strengthening their capacities through inclusive and market-driven skills development can significantly improve income stability and economic resilience.
The Skills Development for Informal Workers in Latin America project offers a scalable and inclusive model for bridging the gap between informal labor and sustainable economic opportunities. By combining skills training, digital inclusion, financial access, and policy reform, the initiative contributes to more equitable and resilient labor markets across the region.
