Under a relative liberal market model of growth and social inclusion programs, in the last decade Peru has had one of highest rate of economic growth and declining levels of poverty and its severity in Latin America. However, more than 60% of the labor force in its 24 regions is still employed in informal activities of low productivity indicating absence of a significant structural change. This paper presents evidence suggesting that such declining rates may be explained by the regional labor reallocation measure of structural change between informal and formal activities rather than social inclusion programs and regional economic growth.