Costa Rica's Social Spending Among Lowest in OECD - Expat Community

Costa Rica’s Social Spending Among Lowest in OECD

Aug 30, 2023 | Costa Rica, News & Articles | 0 comments

(Social spending of OCDE countries).

Costa Rica finds itself near the bottom in terms of social spending as a percentage of its Gross Domestic Product (GDP) among the Organization for Economic Co-operation and Development (OECD) member countries. Data from 2020 reveals Costa Rica allocated 14.5% of its GDP to social investment, trailing behind countries such as France and Italy, which invested 31.6% and 30.1% respectively. The nation’s spending falls below the OECD average of 21.1%, and while it offers almost universal primary education and healthcare, the poverty rate remains at 20% for the last 25 years.

Social Challenges and OECD Observations

The OECD’s Economic Surveys for Costa Rica in February 2023 highlight substantial social challenges, such as persistent poverty rates and growing inequality. Contributing factors include high unemployment rates, a significant portion of the workforce in informal employment, and anticipated demographic shifts. The OECD suggests a more integrated approach to social protection, pointing out the current fragmented system with 21 entities overseeing more than 35 social programs.

Recommendations for a Way Forward

To improve social outcomes, the OECD recommends Costa Rica to focus on enhancing child social protection, targeting the 40% of children affected by poverty. Additionally, measures to address gender inequality in the workforce, especially for women in low-income households, are advised. The looming demographic changes necessitate a revamp of the current pension system. As the elderly population is set to grow exponentially, the country needs to consider linking the retirement age with life expectancy and introducing universal pensions, ensuring sustainable support for its aging population.


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