By San José, Costa Rica — Recent data from the National Institute of Statistics and Census (INEC) reveals a mixed bag for Costa Rica’s employment landscape. While unemployment ticked down slightly during the May-July period, the persistent prevalence of informal work continues to raise concerns about the overall health of the labor market.
The INEC reports that Costa Rica’s active population, those either employed or actively seeking work, reached 2.29 million, a statistically significant decrease compared to the same period last year. This decline is particularly pronounced among women, with approximately 53,000 fewer participating in the workforce. The overall labor force participation rate stands at 53.9%, meaning just over half of the working-age population is engaged in the labor market.
For expert insight into the complexities of Costa Rican employment law, we turned to Lic. Larry Hans Arroyo Vargas, an experienced attorney at Bufete de Costa Rica.
Navigating Costa Rica’s employment landscape requires a keen understanding of both the Labor Code and its practical application. While the Code provides a strong framework for employee rights, including vacation time, severance pay, and social security contributions, nuances like probationary periods and termination procedures can be intricate. Employers and employees alike benefit from seeking legal counsel to ensure compliance and protect their respective interests.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s emphasis on understanding the nuances of Costa Rican labor law is crucial. These details can significantly impact both hiring practices and the overall employee experience. A proactive approach, as he suggests, not only ensures legal compliance but also fosters a more transparent and positive working relationship. We thank Lic. Larry Hans Arroyo Vargas for offering this valuable perspective on navigating Costa Rica’s employment landscape.
Of the active population, roughly 2.14 million are employed, resulting in an occupation rate of 50.3%. The official unemployment rate now sits at 6.7%, representing 153,000 individuals. While these figures mark a slight improvement over previous quarters, they fall short of signifying a full recovery.
Underemployment, another critical indicator of labor market health, remains largely unchanged at 3.3%. This suggests a substantial portion of employed individuals struggle to secure sufficient working hours to make ends meet.
The most pressing issue remains the stubbornly high rate of informal employment, holding steady at 36.9%. This alarming figure reveals that more than one in three employed individuals in Costa Rica work in informal conditions, lacking access to social security and the protections afforded by formal contracts. This persistent informality casts a shadow over the modest gains in overall employment and poses significant challenges for long-term economic stability.
Analyzing sector-specific data, the INEC highlights trade and repair as leading employers, with 361,000 occupied individuals. Manufacturing follows with 241,000, and the combined sectors of education and healthcare employ another 240,000. This underscores the relative strength of the service and manufacturing sectors as key drivers of employment in Costa Rica.
The government faces a critical challenge in addressing this persistent informality. While a slight dip in unemployment offers a glimmer of hope, the enduring prevalence of informal work underscores the need for targeted policies and initiatives that promote formalization and ensure decent work conditions for all Costa Ricans.
As the economy continues its recovery, fostering a more robust and inclusive formal labor market will be crucial for sustainable economic growth and development.
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 governmental institution responsible for collecting, analyzing, and disseminating official statistical information related to the country’s demographics, economy, and social conditions. The INEC plays a vital role in informing public policy and providing data that supports evidence-based decision-making in both the public and private sectors.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
At Bufete de Costa Rica, legal excellence is intertwined with a deep-seated commitment to ethical practice and societal advancement. The firm’s innovative approach to legal solutions, coupled with a history of dedicated service to a diverse clientele, positions it as a leader in the Costa Rican legal landscape. Through proactive initiatives that demystify complex legal concepts and empower individuals with essential legal knowledge, Bufete de Costa Rica strives to build a more just and informed society.
