In much of Latin America, the boundaries between formal and informal work are blurry at best. On paper, government statistics might present a tidy division, but anyone familiar with street life, microenterprise, or professional freelancing knows the reality is more tangled. For policymakers, researchers, and advocates, the question isn’t just how many people are working informally—it’s how those numbers are shifting, and what that means for livelihoods and policy response. Here, ISIC codes—especially when used as proxies—offer a structured way to bring some order to the complexity.
Take ISIC 7290, a catchall for “Other professional, scientific and technical activities.” It might sound like the domain of consultants and lab technicians, but in practice, it captures a wide swath of informal professionals: tutors, designers, translators, independent advisors, and the like. These are the types of roles that have grown in number and visibility, especially as digital platforms and remote work have expanded options—and blurred the old boundaries between formal contracts and the informal hustle.
The methodology starts with household survey data. Many national statistics offices in Latin America regularly ask households about economic activity, employment status, and sources of income. The trick is to carefully code responses—mapping self-reported job types to ISIC 7290 or similar categories. It’s rarely perfect; people describe their work in idiosyncratic ways, and “side gigs” may go unmentioned. Still, with consistent rules, analysts can approximate the size and structure of the informal professional sector.
Next comes the comparison: household survey data versus official business registries. For a given region or city, tally up the number of people reporting 7290-type work, and compare that to the number of formally registered firms in that ISIC category. The difference—the “missing middle”—gives a rough sense of informal participation. If surveys show 10,000 designers and consultants, but only 1,500 are registered, you can infer the remainder are working informally, or at least outside the formal regulatory umbrella.
Tracking this gap over time reveals shifts in the labor market. A rise in informal 7290-type employment, especially during economic shocks or pandemic periods, signals both vulnerability and adaptation. It can mean displaced workers are finding new paths—some by necessity, others by choice—outside traditional payroll jobs. It can also point to where policy intervention might matter: training programs, legal simplification for micro-entrepreneurs, or targeted support for digital upskilling.
The real power of this approach lies in its replicability. By using ISIC codes as a common language, the methodology can be rolled out across national and regional surveys. Comparisons between cities, countries, or time periods become possible—not just for researchers in the know, but for policymakers looking for benchmarks or warning signs. And when governments and multilaterals see where informal professional labor is growing, they’re better placed to design targeted, evidence-based responses.
Of course, there are always caveats. Surveys have blind spots; registries are never complete. Informal workers might underreport, or shift back and forth between formal and informal roles as circumstances change. But the discipline of using ISIC proxies—anchoring the messy reality of informal labor in a shared, recognizable framework—makes it possible to see patterns that might otherwise be lost.
In the end, assessing informal labor in Latin America is about more than numbers. It’s about understanding a world where adaptation is constant, and where the lines between risk and resilience, precariousness and opportunity, are redrawn every day. ISIC codes won’t solve every measurement challenge, but they offer a way to make sense of change—one that’s both rigorous and, in its own way, hopeful.