The design of the Colombian pension system exacerbates income inequality and poverty after retirement age. High informality rates (over 60% of total employment, according to OECD) imply that many workers in Colombia have a low probability of qualifying to get a contributory pension. Despite the targeted support provided to the vulnerable population through pension assistance programs, this support  tends to be low compared to other countries in Latin America and the Caribbean.

The relationship between informality and inequality after retirement plays a central role in the discussion of policies affecting the labour market. One dimension that has not been explored in the public policy debate is how policies aimed to mitigate climate change (and more specifically the creation of green jobs) can affect the distribution of workers between the formal and informal sectors, and how it can have an impact income inequality after retirement.

Find out more about the Extension in Colombia

This project seeks to contribute to the public policy debate by analysing the effects that scenarios of a green economic transformation may have on income inequality after retirement, via the reallocation of workers between the formal and informal labour markets. 

The project will aim to answer following questions, in the Colombian context:

• What are the environmental properties of jobs?
• How can economic transformation towards a more sustainable economy change the composition and transitions between the formal and informal sector?
• What is the impact on inequality and fiscal viability of implementing those policy scenarios?

In addition, the project will evaluate prospective scenarios during the discussion of the pension reform in the  Colombian Congress and will develop a simulation model for the use of the Ministry of Finance and Public  Credit.

The project will be implemented in three stages:

• The research team will first characterize the environmental properties of jobs in Colombia.
• In the second stage, the team will calibrate the transition matrices between employment states and wages to introduce to the microsimulation model. In this stage, the team will propose the economic transition scenarios to simulate.
• In the final stage of the project, the team will prepare a final report with the simulation results and policy discussion.

You will find below the different research papers related to this project:

• Quantifying Green Job Potential in Colombia: A Task-Based Approach (November 2024)
• Greening Colombia’s Energy: The Future of Jobs and Pensions (August 2025)

Labour market panel surveys (LMPS) are household surveys that allow to observe the evolution of labour market dynamics by following the same individuals over several years. Conducted in Egypt in 1998, 2006, 2012 and 2018, these surveys have become the focus of research on the labour market, human development, migration, the (de)composition of families and social protection. They make it possible to analyse the impacts of the various tax and monetary reforms undertaken in the country. The data also sheds light on the opportunities and challenges women face in the labour market. 

This research partnership supports the implementation of the fifth wave of the ELMPS survey in Egypt by providing co-financing dedicated to data collection and dissemination. The objective of this collaboration is to support the production of the wave, as well as presentation chapters of this wave, four of which will be published as research papers to deepen knowledge on the Egyptian labour market. Particular attention will be paid to the analysis of the labour market situation in Egypt following the Covid-19 pandemic, thus providing relevant insights in this post-pandemic context.

The new ELMPS 2023 wave is largely based on the questionnaire of the 2018 ELMPS survey, which addressed issues such as demography, employment, income, migration and well-being. 

This edition differs from previous editions in several ways:

• It incorporates questions dedicated to assessing the impact of the Covid-19 pandemic;
• It broadens its coverage by including new components, such as the digital economy (gig economy) and employment measurement in the emerging green and circular economy sectors;
• It provides for a skills-based module, with the inclusion of a wider variety of skills, which will assess the extent to which workers' skills match the needs of the labour market.

These improvements are intended to ensure more comprehensive and representative data, thus providing a solid foundation for informed public policy development.

The ELMPS 2023 database will be made available on the ERF website. 

Research papers will focus specifically on:

• The role of internal migration in territorial dynamics; 
• The evolution of the insurance system and its coverage; 
• Technology in the labour market and its use; 
• The green economy and the labour market. 

A book will be published covering the themes of 1) labour supply; 2) employment structure; 3) inequalities; 4) mismatch between labour supply and demand; 5) gender and occupational segregation; 6) international migration; 7) social protection; 8) technology in the workplace; 9) green economy; 10) small and medium-sized enterprises (SMEs); 11) care activities (paid and unpaid); 12) food security and resilience to shocks.

Contacts: 

• Dr. Cecilia Poggi, Research Officer, AFD
• Prof. Ragui Assaad, Humphrey School of Public Affairs, University of Minnesota