This report focuses on firms and labor markets in Latin America and the Caribbean during the COVID-19 crisis and recovery. Through a balance sheet analysis, it shows how larger firms have navigated the crisis by cutting back on variable costs and investment, depleting their productive capital. It also shows that small and medium-size enterprises suffered more in closures and restrictions on credit access, and the unprecedented impacts on labor markets, where participation rates and particularly women suffered the most. Moreover, labor informality has increased and is now more endemic than ever. The report provides a set of recommendations for policymakers and suggestions for international financial institutions to assist productive firms to invest, support the growth of new firms, and enhance labor market performance.

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