The Central Bank of Colombia published a labour market analysis comparing Colombia’s unemployment rate with other large Latin American economies and attributing Colombia’s persistently higher unemployment mainly to a structurally higher labour supply. While unemployment has trended down since 2021, it remained around 10% in the second quarter of 2024 to 2025 versus a regional average of 6.5%. Using harmonised data for Argentina, Brazil, Chile, Mexico, Peru and Colombia, the analysis finds Colombia’s employment rate has converged toward the regional average of around 60%, but its labour force participation rate remains higher, at about 1.5 percentage points above the regional average (65.70% versus 64.23% in June 2025). The decomposition shows that since 2023 the unemployment gap has been explained primarily by higher participation rather than weaker employment, and estimates that if Colombia’s participation matched the regional average its unemployment rate would be close to 7%, around 2.5 percentage points below the level observed in the first half of 2025.
Central Bank of Colombia 2026-01-19
Central Bank of Colombia research links Colombia’s persistently higher unemployment to stronger labour force participation
The Central Bank of Colombia's analysis attributes the country's higher unemployment rate to a structurally higher labour supply, with unemployment around 10% in mid-2025 versus a regional average of 6.5%. The study highlights that Colombia's employment rate aligns with the regional average, but its labour force participation rate is 1.5 percentage points higher, suggesting that if participation matched the regional average, unemployment could decrease to approximately 7%.