## Labor Force Participation in Colombia ## Source details **Canonical URL:** [Labor Force Participation in Colombia](https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025146.pdf) ## Other formats - [Markdown version](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025146.pdf.md) - [Structured JSON version](/-/media/files/publications/selected-issues-papers/2025/english/sipea2025146.pdf.json) --- ### Background - Colombia’s labor force participation (LFP) rose from less than 50 percent of the working-age population in the 1950s to 68 percent in 2010-12, and declined to around 63 percent thereafter. - Male LFP has oscillated around 80 percent, while female LFP rose from 12 percent in the 1960s to 55 percent in the middle of last decade, falling to 52 percent since then. - Female LFP starts to drop sharply at 45-49 years old—about 10 years earlier than male LFP. - Colombia’s current gender gap in LFP is almost 25 percent, second only to Mexico among the compared countries. - The decline in Colombia’s LFP predates the pandemic: during 2013-19, Colombia’s female participation dropped almost 3 ppts while the average for the largest regional economies was broadly unchanged or increased. - While Venezuelan migration coincided with LFP declines, existing literature suggests migration alone does not fully explain the drop: regions with greater migration inflows did not experience larger LFP declines; one study finds a small negative causal effect of migration on participation of 0.3 percentage points. ### Data, Methodology, and Key Statistics - Microdata: Colombian household survey (Gran Encuesta Integrada de Hogares) with migration modules for individuals 15-64 years old; over 576 thousand observations in 2023, of which 54 percent were women. - Econometric approach: probit regressions for LFP (women and men) including household characteristics (head, married), young children, elders, education, Venezuelan migrant status, age, rural/urban, and per capita homicide rate. Robustness analysis includes 2019 and 2024 regressions and individual-year regressions for 2013–2019. - During 2000-19: - Colombia’s labor grew on average 2.3 percent per year—0.3 ppts faster than in LA8 countries. - Population growth contributed 1.3 percent in Colombia (1.1 on average in LA8). - Working-age population (“demographics”) contributed 0.7 percent in Colombia (0.6 in LA8). - Employment growth was 0.5 percent in Colombia vs 0.3 percent in LA8. - Labor force participation growth was −0.3 percent in Colombia—the lowest among LA8 countries. - Table 1 (2013–19 marginal effects): the “children” variable shows a declining marginal effect during the pre-pandemic period (from 0.0440 in 2013 to 0.0287 in 2019). ### Drivers and Econometric Findings - Childcare and eldercare constraints: - Having young children (less than 5 years old) reduces women’s probability of participating in the labor force by around 6 percentage points. - Having elders living at home reduces women’s probability by an additional 2 percentage points. - Venezuelan migrants: - Venezuelan migrants tend to be more educated and younger (28 years old on average) than Colombians (32 years old on average); these differences help explain higher migrant LFP. - After controls, being a Venezuelan migrant boosts the probability of participating in the Colombian labor force by about 10 percentage points on average—9 ppts for women and 12 ppts for men. - About 74 percent of Venezuelan migrants actively sought a job, compared with 63 percent of locals. - Literature finds heterogeneous effects: small negative effect on less-skilled Colombians’ participation, no evidence of negative effects among high-skilled Colombian females, and a positive effect for high-skilled Colombian women with young children. - Crime (homicide rate) is statistically significant but with a small coefficient; other forms of insecurity may not be captured by this measure. - Robustness: no major differences observed when using 2024 data. ### Impact on Growth and Counterfactuals - Historical contribution: - In the two decades up to the pandemic, labor dynamics contributed on average with 0.7 percentage points to Colombia’s annual real growth rate. - Demographic drag: - Negative population changes are expected to reduce the labor contribution to long-term growth by 0.1-0.2 ppts going forward. - Birth rates have plummeted since the pandemic: the number of births per year declined from more than 200 thousand in 2019 to less than 90 thousand last year. - Counterfactual scenarios (IMF staff calculations): - If LFP returned to its peak, Colombia’s long-term growth rate could increase by 0.3 ppts. - If the gender gap in labor participation were narrowed to 10 percent (the average in advanced economies), the contribution from labor could boost long-term growth by 0.6 ppts. - Further integrating migrants into the labor force would add to these gains. - Additional benefit: increasing LFP would reduce funding pressures on Colombia’s pension system. ### Policy Recommendations - Enhance work flexibility to accommodate caregiving responsibilities and encourage higher female participation. - Expand childcare and eldercare services to reduce the negative labor force participation effects associated with young children and elder dependents. - Better integrate migrants into the formal labor market: - Expand access to formal labor markets through integrated approaches. - Deepen active labor market policies including job search assistance and labor protections. - Formalize migrant workers and ease access to the formal labor market to reduce misallocation and mismatch. - Accelerate and strengthen labor market integration efforts to reap economic gains from migration. *Source: IMF Selected Issues Paper SIP/2025/146* ### Section 1 ### Labor Force Participation in Colombia ### Background - Colombia’s labor force participation (LFP) rose from less than 50 percent of the working-age population in the 1950s to 68 percent in 2010-12, and declined to around 63 percent thereafter. - Male LFP has oscillated around 80 percent, while female LFP rose from 12 percent in the 1960s to 55 percent in the middle of last decade, falling to 52 percent since then. - Female LFP starts to drop sharply at 45-49 years old—about 10 years earlier than male LFP. - Colombia’s current gender gap in LFP is almost 25 percent, second only to Mexico among the compared countries. - The decline in Colombia’s LFP predates the pandemic: during 2013-19, Colombia’s female participation dropped almost 3 ppts while the average for the largest regional economies was broadly unchanged or increased. - While Venezuelan migration coincided with LFP declines, existing literature suggests migration alone does not fully explain the drop: regions with greater migration inflows did not experience larger LFP declines; one study finds a small negative causal effect of migration on participation of 0.3 percentage points. ### Data, Methodology, and Key Statistics - Microdata: Colombian household survey (Gran Encuesta Integrada de Hogares) with migration modules for individuals 15-64 years old; over 576 thousand observations in 2023, of which 54 percent were women. - Econometric approach: probit regressions for LFP (women and men) including household characteristics (head, married), young children, elders, education, Venezuelan migrant status, age, rural/urban, and per capita homicide rate. Robustness analysis includes 2019 and 2024 regressions and individual-year regressions for 2013–2019. - During 2000-19: - Colombia’s labor grew on average 2.3 percent per year—0.3 ppts faster than in LA8 countries. - Population growth contributed 1.3 percent in Colombia (1.1 on average in LA8). - Working-age population (“demographics”) contributed 0.7 percent in Colombia (0.6 in LA8). - Employment growth was 0.5 percent in Colombia vs 0.3 percent in LA8. - Labor force participation growth was −0.3 percent in Colombia—the lowest among LA8 countries. - Table 1 (2013–19 marginal effects): the “children” variable shows a declining marginal effect during the pre-pandemic period (from 0.0440 in 2013 to 0.0287 in 2019). ### Drivers and Econometric Findings - Childcare and eldercare constraints: - Having young children (less than 5 years old) reduces women’s probability of participating in the labor force by around 6 percentage points. - Having elders living at home reduces women’s probability by an additional 2 percentage points. - Venezuelan migrants: - Venezuelan migrants tend to be more educated and younger (28 years old on average) than Colombians (32 years old on average); these differences help explain higher migrant LFP. - After controls, being a Venezuelan migrant boosts the probability of participating in the Colombian labor force by about 10 percentage points on average—9 ppts for women and 12 ppts for men. - About 74 percent of Venezuelan migrants actively sought a job, compared with 63 percent of locals. - Literature finds heterogeneous effects: small negative effect on less-skilled Colombians’ participation, no evidence of negative effects among high-skilled Colombian females, and a positive effect for high-skilled Colombian women with young children. - Crime (homicide rate) is statistically significant but with a small coefficient; other forms of insecurity may not be captured by this measure. - Robustness: no major differences observed when using 2024 data. ### Impact on Growth and Counterfactuals - Historical contribution: - In the two decades up to the pandemic, labor dynamics contributed on average with 0.7 percentage points to Colombia’s annual real growth rate. - Demographic drag: - Negative population changes are expected to reduce the labor contribution to long-term growth by 0.1-0.2 ppts going forward. - Birth rates have plummeted since the pandemic: the number of births per year declined from more than 200 thousand in 2019 to less than 90 thousand last year. - Counterfactual scenarios (IMF staff calculations): - If LFP returned to its peak, Colombia’s long-term growth rate could increase by 0.3 ppts. - If the gender gap in labor participation were narrowed to 10 percent (the average in advanced economies), the contribution from labor could boost long-term growth by 0.6 ppts. - Further integrating migrants into the labor force would add to these gains. - Additional benefit: increasing LFP would reduce funding pressures on Colombia’s pension system. ### Policy Recommendations - Enhance work flexibility to accommodate caregiving responsibilities and encourage higher female participation. - Expand childcare and eldercare services to reduce the negative labor force participation effects associated with young children and elder dependents. - Better integrate migrants into the formal labor market: - Expand access to formal labor markets through integrated approaches. - Deepen active labor market policies including job search assistance and labor protections. - Formalize migrant workers and ease access to the formal labor market to reduce misallocation and mismatch. - Accelerate and strengthen labor market integration efforts to reap economic gains from migration. *Source: IMF Selected Issues Paper SIP/2025/146* ### Section 2 ### sipea2025146 - Section 2 ### Publication information - New York, NY: United Nations Department of Economic and Social Affairs, Population Division. *Source: sipea2025146 - Section 2* --- _Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025146.pdf_