The COVID-19 pandemic had a devastating impact on Argentina's labor market. According to data from INDEC's Permanent Household Survey (EPH), the unemployment rate surged to 13.1% in the second quarter of 2020 — the highest level recorded since 2004 — while the employment rate collapsed to 33.4%, leaving millions of workers outside the formal economy. Mandatory quarantine measures (ASPO and DISPO) interrupted economic activity across virtually every sector, with the hardest-hit industries including hospitality, retail trade, construction, and transportation. The scale of the disruption was unprecedented in recent Argentine history.
A gradual but uneven recovery
From the second half of 2020 onward, the labor market began a cautious recovery as restrictions eased and economic activity partially resumed. By the fourth quarter of 2021, unemployment had fallen to 7.0%, the lowest figure recorded since 2016, and the employment rate climbed to 43.6% — a historic high in the EPH series. The sectors that led the rebound were those most affected by the initial closure: construction expanded 53.7% year-on-year in the second quarter of 2021, while hotels and restaurants posted a 51.4% increase over the same period. These gains reflected both the release of pent-up demand and a low base effect from 2020. Our dashboard on employment and wages tracks these dynamics in detail across sectors and regions.
Informality: a persistent structural challenge
Despite the headline improvement in unemployment figures, structural vulnerabilities in the labor market persisted. As of the fourth quarter of 2021, informal employment — defined as workers without social security contributions — accounted for 33.3% of all salaried workers in Argentina. This figure had barely improved from pre-pandemic levels, indicating that much of the job creation during the recovery took place outside formal employment arrangements. Informal workers lack access to unemployment insurance, paid sick leave, and retirement contributions, making them significantly more exposed to economic shocks. Our dashboard on the Permanent Household Survey provides a detailed breakdown of informality rates by region and age group.
Gender gaps and unequal recovery
The recovery also revealed significant gender disparities. Approximately 422,000 women who had lost their jobs during the pandemic had not re-entered the labor market by mid-2021, according to EPH estimates. Women were disproportionately concentrated in the sectors most affected by lockdown measures — domestic service, retail, and care work — and faced additional barriers to re-employment due to increased caregiving responsibilities during school closures. The female labor force participation rate recovered more slowly than the male rate, widening a gap that had been gradually narrowing before 2020. Policies targeting childcare support and flexible work arrangements were identified as key levers for accelerating women's labor market reintegration.
What the data tells us going forward
The post-pandemic labor market recovery in Argentina was notable in its speed but incomplete in its depth. The combination of high informality, persistent gender gaps, and regional inequalities — with the Greater Buenos Aires metropolitan area showing faster recovery than Northwestern and Northeastern regions — meant that headline unemployment figures masked continued hardship for large segments of the workforce. The experience highlighted the importance of monitoring not just unemployment rates but also employment quality indicators such as formality, hours worked, and real wages. Our dashboard on COVID-19 contextualizes the health crisis that drove these labor market disruptions. A complete picture of the recovery requires looking at all of these dimensions together rather than any single indicator in isolation.
