Impact of Education on Poverty Reduction in Costa Rica: A Regional and Urban-Rural Analysis

Abstract

In this article we analyze the relationship between levels of education and poverty for the different planning regions and also according to urban and rural areas. For the purposes of the study we use the methodology of Unsatisfied Basic Needs (UBN) to measure poverty in amultidimensional way: Access to decent shelter, access to health, access to knowledge, and access to other goods and services (consumption capacity), based on a complete data base of the Housing and Population Census of 2011. Through the application of the Propensity Score Matching, we compareindividuals with similar characteristics, but differing in that some of them have higher levels of education compared to the others. We then analyze both groups' poverty levels (according to the type of UBN) with the purpose of establishing whether individuals with greater levels of educationpresent lower levels of poverty incidence or, on the contrary, there is no relation of causality of levels of education with respect to levels of poverty for both groups of individuals. Based on empirical evidence we conclude that achieving greater levels of education helps people from rural andurban areas and people living in the different planning regions of Costa Rica to escape poverty. Using the methodology of propensity score matching, it is demonstrated that higher levels of education are accompanied by lower levels of poverty by type of UBN, for different planning regions and alsocomparing urban and rural areas of the country. For example, overall it shows that people who finish secondary education reduce poor shelter between 8.0% and 33.0%, reduce low levels of knowledge between 26.0% and 44.0%, and reduce poor consumption between 12.0% and 30.0%. This is also consistentwith the results of finishing secondary education in urban and rural areas since completing secondary education in urban areas would have a significant impact on reducing poverty of shelter in about 36,0%, poverty of access to knowledge in 48,0%, and in 22,0% regarding access to other goods andservices (consumption capacity). While completing secondary education in rural areas would reduce poverty of shelter in 18,0%, poverty related to access to knowledge in 30,0%, and poverty in consumption capacity in 32,0%. (Journal abstract)