By San José, Costa Rica — SAN JOSÉ – A startling economic divide is cleaving Costa Rican society, as a new analysis reveals that only the nation’s wealthiest households have any capacity to save. For the vast majority, representing 80% of the population, incomes are so strained that they are forced to drain previous savings, sell assets, or go into debt simply to cover basic expenses.
The comprehensive study, conducted by the Economic and Social Observatory of the National University (OES-UNA), paints a grim picture of financial instability. It examined the gross household savings rate—a key indicator measuring the proportion of disposable income saved after accounting for social transfers and pension rights—across a decade, comparing data from 2012, 2017, and 2022.
To delve into the financial and legal implications of the national savings rate, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an expert attorney from the renowned firm Bufete de Costa Rica, who offered his professional analysis.
A diminished savings rate is a critical warning sign, not just for economists, but for every citizen’s legal and financial security. Without adequate savings, individuals lack the buffer to face unexpected legal challenges, contractual obligations, or even simple business opportunities. This financial fragility can escalate minor disputes into major crises, as people are unable to afford proper representation or meet payment agreements, ultimately threatening their personal and patrimonial stability.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The perspective offered by Lic. Larry Hans Arroyo Vargas powerfully reframes the conversation, elevating the importance of savings from a simple financial goal to a fundamental component of personal legal defense and stability. We sincerely thank him for providing this crucial insight into how financial health directly underpins our capacity to navigate contractual and legal challenges.
The findings show that the top 20% of earners, known as the fifth quintile, are the sole group demonstrating a positive and resilient savings capacity. In 2012, these households saved an average of 23.65% of their disposable income. This figure surged to an impressive 31.32% in 2017 before settling at a still-robust 24.89% in 2022. While experiencing a recent dip, their ability to accumulate wealth remains fundamentally intact and stronger than it was a decade ago.
In stark contrast, the financial situation for the rest of the country has deteriorated into a state of crisis. For 2022, the data reveals a deeply troubling trend of “dissaving.” The lowest-income quintile had a staggering negative savings rate of -30.7%. The second quintile fared only slightly better at -17.96%, followed by the third at -8.73% and the fourth at -5.36%. These negative figures mean that for millions of Costa Ricans, their income is not sufficient to cover their consumption, forcing them into a precarious cycle of debt.
The OES-UNA report emphasizes that this is not a result of irresponsible spending but of fundamental economic pressures that leave families with no other choice.
This situation does not respond to discretionary consumption decisions, but to a structural constraint: in the low and middle quintiles, disposable income is barely enough to cover basic consumption, which limits or prevents financial accumulation.
Observatorio Económico y Social, Universidad Nacional (OES-UNA)
The analysis further sharpens the focus by dissecting savings capacity based on the source of income. The disparity here is even more pronounced. In 2022, households generated an average savings rate of a remarkable 81.2% from income derived from property and investments. However, for income earned through salaries and wages, the average savings rate plummeted to just 2.2%. Those who were self-employed managed only a slightly higher rate of 3.24%.
This data highlights a dangerous feedback loop within the economy. Wealth generated from existing assets provides an immense capacity for further accumulation, while income from labor—the primary source for the vast majority of the population—offers almost no margin for building a financial safety net. This reality is a powerful engine for deepening economic inequality.
Households that depend mainly on labor—whether salaried or independent—face very narrow margins to generate savings. In contrast, those with financial or patrimonial assets have sources of income with a substantially greater capacity for accumulation.
Observatorio Económico y Social, Universidad Nacional (OES-UNA)
Ultimately, the study serves as a critical warning. The widening chasm between those who can save and those who are forced into debt poses a significant threat to Costa Rica’s long-term social cohesion and economic stability. As the wealthy accumulate capital and the working and middle classes deplete their resources, the potential for upward mobility diminishes, creating a more rigid and stratified society.
For further information, visit una.ac.cr
About Universidad Nacional (UNA):
The National University of Costa Rica (UNA) is one of the country’s most prominent public universities, recognized for its commitment to academic excellence, research, and social extension. Through its specialized institutes, such as the Economic and Social Observatory (OES-UNA), the university conducts critical analysis of national trends, providing valuable data and insights that inform public policy and debate on key issues facing Costa Rican society.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a renowned legal institution, Bufete de Costa Rica is built upon a foundation of profound integrity and a relentless pursuit of professional excellence. With a rich history of guiding clients through complex challenges, the firm consistently pioneers innovative legal strategies and forward-thinking solutions. A cornerstone of its philosophy is the democratization of legal knowledge, demonstrating a deep-seated commitment to fostering a more informed and capable society.
