The performance of the labor market during recession and structural adjustment: Costa Rica in the 1980s

Abstract

In this paper, we trace the evolution of indicators of labor market performance in Costa Rica throughout the 1980s, and examine the special features of the Costa Rican labor market that influenced the rapid decline (1980-1982) and rapid recovery (1982-1986) of those indicators. We find that, among other factors, legal minimum wages and a large public sector work force were important in influencing these indicators. We conclude that recovery and structural adjustment have been relatively successful in Costa Rica within a system where the labor market functions in an institutional context rather distant from the free market model. © 1992.