OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Making growth more inclusive in Costa Rica

In the past 30 years Costa Rica has grown steadily and social indicators have improved markedly. Well-being indicators are comparable or even above the OECD average in several dimensions, such as health, environment or life-satisfaction. This paper reviews the social progress that Costa Rica has achieved and identifies reducing inequality and poverty as the main challenges. To tackle those challenges, the paper argues that there is a need to upgrade existing social assistance programmes to maximise their impact. Social policies should put more emphasis on getting more people into formal work, including by raising their skill levels. This is the most effective way to get people out of poverty. Education is the area where the largest gap with respect to OECD countries is observed. Policy efforts are also warranted to tackle informality, which is increasing rapidly, and to close the gender gap in the labour market. The health and pension systems play a fundamental role in maintaining social cohesion in Costa Rica and it is crucial to modernise them and to make them sustainable in the face of demographic challenges. Costa Rica exemplifies the benefits of preserving natural resources in generating growth and employment opportunities, thereby providing a way out of poverty. Building on its achievements in this area, Costa Rica should reinforce environmental protection efforts, such as reducing emissions from the transport sector and improving wastewater treatment.


Keywords: poverty, labour market, inequality, inclusive growth
JEL: H42: Public Economics / Publicly Provided Goods / Publicly Provided Private Goods; J16: Labor and Demographic Economics / Demographic Economics / Economics of Gender; Non-labor Discrimination; J60: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Mobility, Unemployment, Vacancies, and Immigrant Workers: General; O54: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: Latin America; Caribbean; I24: Health, Education, and Welfare / Education and Research Institutions / Education and Inequality; Q20: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Renewable Resources and Conservation / Renewable Resources and Conservation: General; I2: Health, Education, and Welfare / Education and Research Institutions; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions; J01: Labor and Demographic Economics / General / Labor Economics: General; J08: Labor and Demographic Economics / General / Labor Economics Policies; O15: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Economic Development: Human Resources; Human Development; Income Distribution; Migration; I10: Health, Education, and Welfare / Health / Health: General; I30: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: General
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