WILLEMSTAD – The informal economy will become an important research focus for the Central Bank of Curaçao and Sint Maarten in the coming years, as concerns grow over its impact on public finances, productivity and long-term economic growth.
In its Research Agenda 2026–2028, the CBCS identifies labor market dynamics as one of its main economic research themes. Within that theme, the bank specifically points to the informal sector as a growing concern for Curaçao and Sint Maarten.
According to the CBCS, informal activity erodes the tax base, leads to a misallocation of resources and ultimately reduces potential output. This means that the problem is not only fiscal, but also economic. When workers and businesses operate outside the formal system, governments collect less revenue, social protection becomes weaker and productivity becomes harder to measure or improve.
The bank wants future research to examine the size of the informal sector and explore ways to help informal employment transition into formal work. This could become an important policy area for Curaçao, where businesses often complain about high operating costs, administrative burdens and competition from informal operators.
The issue is also linked to labor flexibility. The CBCS suggests that Curaçao and Sint Maarten should move beyond the traditional debate over permanent versus flexible employment and instead focus more directly on the difference between flexible and informal work.
The bank argues that properly regulated flexible employment can potentially improve labor market inclusion and provide workers with better access to social protection. However, if flexible work is poorly designed or poorly enforced, it can push workers further into informality.
This research direction comes at a time when Curaçao is trying to strengthen public finances, broaden the tax base and improve economic resilience. A large informal sector makes those goals harder to achieve because it limits government revenue while placing pressure on formal businesses and workers.
The CBCS agenda does not yet present new figures on the size of the informal economy, but it clearly identifies the issue as a structural risk. The findings from future studies could influence discussions on tax enforcement, labor regulation, social security, business costs and economic reform.
For policymakers, the message is clear: reducing informality is not only about collecting more taxes. It is also about creating a fairer, more productive and more resilient economy.