Costa Rica labor market shows stagnation despite economic growth

Costa Rica is experiencing a disconnect between economic growth and labor market stability. While the real GDP increased by 25% between 2019 and 2025, the number of employed persons in the second quarter of 2026 remained nearly identical to levels seen seven years ago.

Youth unemployment is a critical concern, estimated at 18% by the National Institute of Statistics and Censuses (INEC), which is triple the national average of approximately 6%. Only 36 out of every 100 young people participate in the labor market, and 55% earn less than the minimum wage. Additionally, one-fifth of the youth population is neither studying nor working.

Although the overall unemployment rate fell from 11.9% in 2019 to 7.0% in 2026, data suggests this is due to 132,169 people leaving the workforce entirely rather than new job creation. Recent employment growth has been split, with 53% entering formal roles and 47% entering informal sectors, the latter of which has disproportionately affected women.