Labor & Employment
In Costa Rica, labor and employment practices are governed by the Labor Code, which sets out the rights and obligations of workers and employers and establishes minimum standards for working conditions, such as maximum working hours, overtime pay, and mandatory rest, to ensure that workers receive fair treatment. The country’s labor law requires businesses to pay their employees a minimum salary and provide them with benefits. Moreover, the government offers social security benefits such as health insurance, retirement, and disability benefits to workers (Global Data, 2023), which can increase the cost of doing business in the country.
In Costa Rica, public holidays are treated as regular working days and are compensated accordingly. This also applies to non-Christian employees, who can request time off on days other than Sundays (Melendez & Bonilla, 2023). Additionally, wages are determined through collective bargaining or other means to establish a fair living wage. However, the Costa Rican government sets the minimum wage based on an individual’s qualifications (Minimum Wage, 2023). For instance, a semi-skilled worker will earn more than an unskilled worker, who is expected to receive CRC 12,139.07 daily. These factors can challenge foreign companies seeking to compete in the Costa Rican market. Nevertheless, Costa Rica has an open economy and actively encourages foreign investment.
Factors of production
Costa Rica’s economy relies on four key factors of production: land, labor, capital, and entrepreneurship. The country’s abundant natural resources, such as fertile soil and diverse flora and fauna, make land a crucial factor in agriculture and tourism (LT & C, 2019). The land allows the production of a wide range of agricultural products, including coffee, bananas, pineapples, and other tropical fruits (Sis International Research, 2021), and a popular tourist destination due to its stunning natural beauty, including its beaches, national parks, and wildlife reserves.
Labor is another essential factor with a degree of competition. This highly educated workforce contributes to Costa Rica’s reputation as a hub for innovation and technology (Bui, 2023). The government has invested heavily in education, which has led to a significant improvement in the quality of the workforce. As a result, Costa Rica has attracted foreign companies that require skilled labor. Capital includes both physical and financial assets, and the country has made strides in recent years to attract foreign investment and improve infrastructure (Passright, 2023), resulting in the development of modern transportation networks, world-class telecommunications systems, and state-of-the-art industrial parks. Finally, entrepreneurship plays a vital role in the country’s economy, with many startups and small businesses that drive job creation and economic growth in various industries, ranging from technology and biotech to tourism and agriculture (Cinde Invest in Costa Rica, 2023), due to the educated and skilled workforce that provides a valuable resource for entrepreneurs looking to start and grow a business.
