Institute for Research on Labor and Employment

Labor relations in construction in Central America have been deregulated and informalized in recent years (UPF 2012, BWI 2013), as part of a longer and broader process of informalization in this region. Though official statistics report only slightly higher rates of informality in construction than economywide (in Guatemala, for example, 31.3% in construction compared to 30.8% overall; computed from INE 2014, Tables 4.1 and 4.4), there is reason to believe these are serious underestimates (for example, the ILO [2012] estimates 77.8% of construction employment in neighboring Mexico is informal, more than twice the official estimate; comparable estimates are not available for Central America).

In this context, Guatemala and Costa Rica present an instructive contrast. Guatemala is much poorer, with GNP per capita around half of Costa Rica’s level, and for construction draws heavily on rural migrants, many of them indigenous, in construction. Wealthier Costa Rica relies on Nicaraguan migrants in construction. At the same time, in both countries much housing is self-built by families.