What is Informal Worker

The objective of this chapter is to identify policy measures to be implemented to reduce the levels of informality in Colombia. Informality is one of the main problems of the economy of Colombia. This problem does not only bring about macroeconomic distortions, but foremost, it compromises the sustainability of firms since they have less access to technology, training programs, and loans. Furthermore, informal firms have less access to government subsidies, and their workers experience higher turnover ratios. The chapter concludes that the measures to reduce informality must be focused on the following areas: tax reduction, labor market flexibility, and launching educational programs for informal firms.