This study seeks to explain whether social policy preferences of formal and informal workers in Latin America and the Caribbean are triggered by diverging factors. Differences in welfare state costs and benefits for these labour market groups are likely to fuel diverging incentives. Building on canonical insights from political economy theory, I analyse formal and informal workers’ preferences employing a hierarchical model on pooled survey data from LAPOP 2008 and 2010. The article tests whether informal workers are driven mainly by economic self-interest to increase gains from non-contributory public welfare goods. While economic self-interest is an influential factor for formal workers, it is unexpectedly much less so for informals. Also an increased economic insecure environment reflected by higher unemployment rates does not exceptionally motivate informals to turn towards the state for welfare provision. Informalization seems to reflect a retreat from the state also in terms of the welfare system.
