The labor market in Chile faces significant challenges, especially in the context of informality and digitalization. According to data from May, the country has more than 16 million people of working age, of which approximately 10,2 million are part of the labor force. However, the employment rate reveals an alarming gender disparity: while 66.9% of men are employed, only 47.8% of women manage to access formal employment (INE, 2024).

Informality is a growing phenomenon, particularly among micro-entrepreneurs. A report from the Economic Context Observatory of the Diego Portales University highlights that the informal employment rate among male micro-entrepreneurs has increased from 60.3% to 62.3%, and among women, from 65.1% to 69.5%. This situation is exacerbated by the lack of formalization.

Female micro-enterprises present a series of particularities compared to male micro-enterprises, among which the following points stand out (EME6):

Formalization: The proportion of informal micro-enterprises, defined as those without starting activities in the Internal Revenue Service, is 63.2% for women and 41.7% for men.

Sector: Women’s participation is mainly in commerce and services.

Income: 70.4% of women earn income equal to or less than the minimum wage (USD 475).

Financing: 31.8% of female micro-entrepreneurs have applied for a bank loan, compared to 68% of men. 50.2% of women have been able to obtain a loan and 54.9% have obtained financing from a government program or non-profit institutions.

The Micro-entrepreneurship Survey indicates that the reasons for not formalizing are “the business is temporary” (58.0%), “I think I will not be able to access social benefits” (54%), or “the business is too small or the activity is infrequent” (51%).

According to the “Training Route of the SME – Metropolitan Region of Santiago” (2023) report, among informal entrepreneurs, the main difficulty in formalizing is the family economic situation (87.79%), followed by the cost of procedures (86.92%) and the time the procedures take (82.85%). 39.24% of respondents have not tried to formalize. The results vary according to the educational level, as entrepreneurs with a lower educational degree place more importance on the cost of procedures, with 80.95%, while those with university education give it less importance (68.42%).

Regarding the reported barriers to the formalization of activities, the Ministry of Finance of Chile documents that the lack of connectivity and digital skills is an important factor. ICTs can become a fundamental tool for enterprises to increase their competencies and competitiveness (Cepal, 2013). When inquiring about the use of ICTs for the promotion and dissemination of their business, only 23.3% of female micro-entrepreneurs declare using them, and the main reasons for their low use are that they do not believe it is necessary to boost their business (61.8%) or that they do not know how to use these tools (26.2%).

Regarding the digitalization of enterprises, the “Metropolitan Region Entrepreneurs Survey Report” (Durney and Bravo 2023) indicates that the lower the degree of formalization, the greater the use of social networks. Conversely, the higher the degree of formalization, the greater the use of websites with online shopping carts.

Among the reasons for the differentiated use of technology are cultural and economic factors that account for the existence of a digital divide that segments the levels of possession, knowledge, and use of technology, creating a digital gap in the dimensions of access, use, and appropriation. Addressing informality and promoting digitalization are crucial steps to strengthen the labor market in Chile, especially for women who face significant barriers.