Costa Rica shed more than 56,000 jobs in the first quarter of 2026 compared with the same period last year, while an additional 118,000 people dropped out of the labor force entirely, according to the latest Continuous Employment Survey released by the National Institute of Statistics and Censuses (INEC).
The figures, covering the January–March 2026 quarter, point to a labor market that is contracting rather than recovering. Our country’s employed population fell from 2,211,416 a year earlier to 2,155,040, a net loss of 56,376 jobs. The national employment rate slipped to 50.3 percent, down 1.9 percentage points year on year and the lowest reading in recent quarters.
Women bore the brunt of the contraction. INEC reported that 45,229 women left the ranks of the employed over the past 12 months, and the female employment rate fell to 38.2 percent, compared with 62.3 percent for men. The participation gap widened further: the female non-participation rate climbed to 58.4 percent, meaning nearly six in ten working-age women in Costa Rica are neither employed nor actively seeking work.
Perhaps the most striking figure in the report is the surge in inactivity. The population outside the labor force reached 1.97 million people, an increase of 117,848 over the same quarter of 2025. Of that total, 1.25 million are women and 717,000 are men. INEC noted that 97.5 percent of those outside the workforce reported they were not available to work, citing reasons that include unpaid caregiving duties, study, illness and discouragement after extended job searches.
Counterintuitively, the headline unemployment rate fell rather than rose, settling at 7.1 percent nationally, with 6.4 percent for men and 8.1 percent for women. INEC was explicit that the decline does not reflect job creation. Instead, the agency attributed it to a shrinking labor force: when fewer people actively look for work, fewer are counted as unemployed, regardless of whether they have jobs.
Sectoral data underscored where the losses are concentrated. The manufacturing industry, long a pillar of formal employment in Costa Rica and a key driver of export growth, lost 38,000 positions year on year, a statistically significant drop. Within manufacturing alone, female employment fell by 28,000. The financial services and insurance sector shed another 25,000 jobs over the same period. Together, the two sectors account for the majority of the quarter’s net employment decline.
Commerce and repair remained our country’s largest employer, absorbing roughly 15.8 percent of the workforce, followed by education and health at around 11 percent and manufacturing. Telework continued to plateau, with 9.1 percent of salaried employees — about 145,000 people — working remotely, well below pandemic-era highs.
Informal employment showed no improvement. Some 824,000 Costa Ricans, or 38.2 percent of those with work, were employed informally during the quarter, meaning they are not registered with the Caja Costarricense de Seguro Social and lack access to public health coverage and pension contributions. Informality remains particularly entrenched among independent workers, where roughly 85 percent operate outside the formal system.
The first-quarter results extend a trend that has been building since late 2025, when participation rates first began slipping despite a stable headline jobless figure. Economists have pointed to weakness in the export-oriented industrial base, the slowdown in financial services hiring and persistent barriers to women’s labor market entry — particularly the lack of affordable childcare and eldercare — as structural factors weighing on participation.
INEC has not yet released a full regional breakdown for the quarter, and the agency typically follows up its quarterly bulletin with a more detailed report in the weeks ahead. Once that comes out, we will let you know.
