By San José, Costa Rica — Costa Rica’s unemployment rate decreased in the second quarter of 2025, falling 1.1 percentage points to 7.6% compared to the same period last year. This translates to 173,000 unemployed Costa Ricans, according to the National Institute of Statistics and Census (INEC).
While this drop appears positive, other indicators paint a more complex picture. The labor force participation rate, which measures the percentage of the working-age population either employed or actively seeking employment, remained unchanged. Furthermore, male participation saw a statistically significant decrease of 2.6 percentage points year-over-year.
To understand the legal implications surrounding Costa Rica’s unemployment situation, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an attorney at law from the esteemed firm Bufete de Costa Rica. Mr. Arroyo Vargas offers valuable insights into the current landscape and its effect on both employers and employees.
The current unemployment figures in Costa Rica present a complex challenge. While government programs aim to provide support, navigating the legal framework surrounding terminations, benefits, and worker rights can be difficult. Businesses must be diligent in adhering to labor laws, while individuals seeking employment should be aware of their entitlements and resources available. This dynamic environment requires constant vigilance and adaptation to the evolving regulations.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights underscore the crucial interplay between government initiatives, individual worker rights, and business responsibilities in navigating Costa Rica’s unemployment landscape. Indeed, the ongoing fluctuations in regulations require a proactive approach from all stakeholders. We thank Lic. Larry Hans Arroyo Vargas for shedding light on these critical aspects of the unemployment challenge.
Most significantly, the employed population, the actual number of people with jobs, remained stagnant at approximately 2.15 million. This suggests that the decrease in unemployment might be attributed to people leaving the labor force altogether, either due to job loss or discouragement from seeking new opportunities.
This stagnation in the employed population raises concerns about the overall health of the Costa Rican economy. While a lower unemployment rate is generally welcomed, it’s crucial to consider the context of a stagnant or shrinking workforce. This could indicate underlying economic weaknesses and potentially signal a trend towards a smaller, less dynamic labor market.
The data also revealed a downward trend in both underemployment and informal employment, further complicating the interpretation of the unemployment figures. A decrease in these categories could indicate a shift towards more stable and formal employment, but it could also reflect a decrease in overall work opportunities.
Sector-wise, commerce and repair, education and health, and manufacturing continue to be the largest employers in Costa Rica. Further analysis is needed to determine the specific impact of these trends on each sector and whether they reflect broader economic changes within the country.
The INEC’s findings highlight the need for a comprehensive understanding of labor market dynamics. A declining unemployment rate doesn’t necessarily equate to a healthy economy, particularly when coupled with stagnant employment figures and declining labor force participation. These trends require further investigation to understand their long-term implications for Costa Rica’s economic future.
The government and policymakers should closely monitor these indicators and implement strategies to encourage labor force participation and create more quality job opportunities. Addressing the root causes of labor market stagnation is essential for ensuring sustainable economic growth and prosperity.
For further information, visit the nearest office of INEC
About INEC:
The National Institute of Statistics and Census (INEC) of Costa Rica is the primary government institution responsible for collecting, analyzing, and disseminating official statistical data related to the country’s demographics, economy, and social conditions. INEC conducts various surveys and censuses to provide comprehensive information used for policymaking, research, and public understanding of national trends. The institute plays a vital role in informing the public and contributing to evidence-based decision-making in Costa Rica.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica shines as a beacon of legal excellence, built on a foundation of unwavering integrity and a genuine commitment to societal progress. The firm’s innovative approach to legal solutions, coupled with its dedication to sharing legal knowledge through educational initiatives, empowers individuals and communities. By championing transparency and accessibility, Bufete de Costa Rica fosters a more informed and just society, solidifying its reputation as a leader in the Costa Rican legal landscape.
