In observance of the UN International Day for the Eradication of Poverty
By Valeria Lentini and Bruno Carayon, UNHCR Associate Information Management Officer in Costa Rica
In Costa Rica, UNHCR has ramped up its efforts to produce relevant socioeconomic data on asylum seekers, refugees, and host communities. These have led to numerous analyses, including two recent studies that provide important insights into the socioeconomic conditions of Nicaraguans in the country: Comparative Analysis of the Living Conditions and Experiences of the Nicaraguan Population in Costa Rica vis-a-vis the Costa Rican Population and Characteristics and Economic Impact of Migrants and Refugees in Costa Rica.
Conducted with the University of Costa Rica’s Institute of Research in Economic Sciences (IICE), alongside the IMF and the IADB, these two studies reveal both the contributions and vulnerabilities of Nicaraguans in Costa Rica. The findings provide valuable insight for the government and development partners as they develop evidence-informed policies and programmes that address Nicaraguans’ needs and support sustainable solutions. We highlight some of these key insights here.
Nicaraguans in Costa Rica are overall poorer, tend to be less educated, and earn less
Nicaraguan refugees and migrants account for 7% of Costa Rica’s population, making them the second largest proportion of a foreign-born group in Latin America. Although they are predominantly of working age and have higher labour force participation rates than locals—64% compared to 53% of Costa Ricans aged 15 and older—Nicaraguans face significant challenges.
The comparative analysis shows that poverty affects 28% of Nicaraguans compared to 20% of locals, while 11% live in extreme poverty (vs. 7% for nationals). These gaps are in part attributed to lower educational attainment: 63% of Nicaraguans aged 18-35 have not completed secondary education, compared to 33% of Costa Ricans (IICE, 2024).
Further, Nicaraguans in Costa Rica tend to hold low-skilled jobs, concentrated in five sectors: agriculture, construction, accommodation services, commerce, and housekeeping, which together account for 71% of their employment (vs. 43% for nationals). Their wage earnings are also lower, averaging 37% less than nationals, and 14% less when controlling for similar socio-demographic characteristics.
Although Nicaraguans face higher poverty rates than the average Costa Rican, their relatively small share of the entire population means their poverty does not contribute to an elevated national poverty figure for Costa Rica, as has been mistakenly hypothesized in the past. The national poverty rate in Costa Rica of around 20% is similar when including or not the share of Nicaraguans living in poverty.
Figure 1: Monthly estimates of the total poverty rate at the national level and by type of household (January 2017-February 2024)
Note: own estimates with data from the Encuesta Nacional de Hogares (ENAHO) and the Encuesta Continua de Empleo (ECE). The bars represent 95% confidence intervals. The values of each June are those observed in the ENAHO.
Nicaraguans’ social and tax contributions exceed the cost of providing them with public health and education
Moreover, and contrary to popular belief, Nicaraguans are not a drag on Costa Rica’s economy. According to IMF-IADB-UNHCR (2023), macroeconomic estimations from 2017 to 2021 show that their social contributions (health, pensions, and other social contributions) and tax revenue (through income and consumption taxes) exceed the costs of providing them with health and education. This undermines the notion that they add pressure on Costa Rica’s social security system since they are, in fact, net contributors. Furthermore, the proportion of Nicaraguan workers directly contributing to the social security system is comparable to that of Costa Ricans; however, if they return to Nicaragua later in life, they will have effectively subsidized the Costa Rican pension system, as pensions are not transferable between the two countries.
What is concerning, however, is the lower coverage and value of social transfers Nicaraguans in poverty receive. According to data from IICE (2024), in 2023, only 39% of Nicaraguan households in poverty received some kind of social transfers compared to 52% of locals. Additionally, while contributing to the economy, Nicaraguans in the labour market, are also more likely to work informally (45% compared to 36% of Costa Ricans), which compounds their vulnerability.
The evidence is clear, as are the challenges and opportunities
These studies highlight that more integrated policies for improving employment conditions, social inclusion, and access to services for the Nicaraguan population in Costa Rica would not only benefit the refugees and migrants’ wellbeing but allow them to increase their contributions to Costa Rica.
To that end, UNHCR will continue to advocate for greater inclusion of the Nicaraguan refugee population in the national statistical system, while also expanding partnerships between the government, development actors, academia and international organizations for rigorous diagnostics and evaluations of programmes and policies which help inform more effective solutions.