Making a successful transition to a more inclusive labour market in Costa Rica

Costa Rica needs to make the most of labour market policy levers that help workers navigate a flexible labour market in a way that unlocks the potential for sustained wage and productivity growth and encourages the creation of good-quality employment. This includes: i) a stronger, well-developed collective bargaining framework ii) greater employment security via better enforcement of minimum wages as well as a well-designed unemployment insurance system iii) removal of existing barriers to labour force participation and access to formal jobs of under-represented groups and iv) investment in active labour market policies and upskilling programmes. The new Labour Procedure Reform passed in 2016 is a step in the right direction and in particular can help to foster better working conditions. Nevertheless, strong efforts will be critical for their successful implementation.