Incidence of Coronavirus in Unemployment in Costa Rica

Unemployment is a worrying issue for the population of Costa Rica, due to the social and economic implications it has on Costa Ricans. Unfortunately, in recent years Costa Rica has been immersed in a very worrying unemployment crisis, over time, different governments have tried to combat the unemployment rate, but the circumstances remain the same or worse than ten years ago, the Institute of Statistics and Census of Costa Rica (as quoted by Avendaño, M. 2020) shows the behavior that the unemployment rate has had in recent years through the following figure:

Source: Institute of Statistics and Census of Costa Rica

In the year 2020, Costa Rica reached the highest unemployment rate in the last ten years, in fact, at the beginning of 2020 according to the National Institute of Statistics and Census (INEC) set a 12.4% unemployment rate, but the tragedy does not stop there, the figures become even more worrying at the end of 2020.

The health crisis that began in the country in March 2020 has not only affected the health of Costa Ricans, but also contributed to the increase in unemployment and thus caused the growth of poverty and inequality of the Costa Rican population.

The country closed in 2020 with an unemployment rate of 20%, corresponding to 487,675 people out of work, this figure is influenced by the confinement that had to be made by the pandemic that we are currently still living in. The confinement caused the closure of many companies which caused labor contracts to be either paused or even terminated. There are other variables that have been accumulating for years, these being the mismanagement of resources controlled by the social sector, corruption, the economic models that have been applied based on macroeconomic aspects such as fiscal deficit, the level of inflation and GDP growth. However, the main cause of this historical figure recorded in Costa Rica in 2020 in relation to unemployment is Covid-19, as confirmed by Madrigal, L. (2021).

According to the 2020 Q4 employment report, Costa Rica's unemployment rate jumped 7.6 percentage points compared to the fourth quarter of 2019, this was fueled by the economic effects of the COVID-19 pandemic. In 2020, the highest unemployment rate was reached in the second quarter at 24% and began to decline at a rate of two percentage points per quarter.

There is a difference between unemployment in the II quarter of 2019 and what is presented in the II quarter in 2020:

It is worth noting that, within this data, there is a group of the population that leads in these figures, women are the ones who became unemployed the most in 2020, Leitón, P. (2021) states "the unemployment rate affected women more with 25.2%, while in the case of the male population it was 16.4%, both statistically significant increases of 8.6 and 6.9 percentage points (respectively)" (paragraph 5). Consequently, the impact of the increase in the unemployment rate in Costa Rica also causes an increase in informal jobs, underemployment and, therefore, a decrease in the quality of life of the population.

Now, Costa Rica finds itself in a very complex panorama with the relation of unemployment and Covid-19. According to the Central Bank in the Macroeconomic Program 2021-2022, with the arrival of the vaccines to the country, they hope to make the measures of confinement more flexible and reactivate the economy with the opening of businesses, which consequently can activate the labor activity for Costa Ricans. The hope of Costa Ricans is in the hands of future governments and their actions to reduce this figure that has become a record for the country.

References:

Avendaño, M. (2020). Tasa de desempleo sube a un histórico nivel del 20,1% por crisis del coronavirus: 190.000 personas perdieron su trabajo. Recuperado de https://www.elfinancierocr.com/economia-y-politica/tasa-de-desempleo-alcanza-un-historico-nivel-del/5XZFNO4IOFCMBNZPNVZYNVT4T4/story/.

Instituto Nacional de Estadísticas y Censos (2020) Tasa de desempleo nacional fue del 23.2%. Recuperado de https://www.inec.go.cr/noticia/tasa-de-desempleo-nacional-fue-de-232#:~:text=%2D%20Poblaci%C3%B3n%20desempleada%20fue%20de%20544,mercado%20laboral%20en%20Costa%20Rica.

Madrigal, L. (2021). 487.675 personas terminaron el 2020 sin trabajo; tasa de desempleo cerró en 20%. Recuperado de https://delfino.cr/2021/02/487-675-personas-terminaron-el-2020-sin-trabajo-tasa-de-desempleo-cerro-en-20.