Strong socio-economic performance but progress has stalled recently in Costa Rica

Costa Rica has recorded many social and economic achievements and currently enjoys levels of well-being similar to the OECD average. But recent years have seen serious strains arise in the social contract. Unemployment has increased steadily since the global crisis to well above its historical average and it is now higher than the Latin American average. Increasing inequality, little progress in tackling poverty and a high risk of economic exclusion of the low-skilled all call for policy reforms that promote a more dynamic and inclusive economy that better responds to the challenges of technological change and globalisation. Existing policies are outdated and no longer effective in today’s dynamic, export-oriented economy which requires greater flexibility and more high skilled and technically-skilled workers. Immigration, mainly of low-skilled labour from Nicaragua, has been high in the past three decades but migration policy has only recently shifted to link migration with integration and economic development.