Tuesday 25 January 2022

In Costa Rica, the 10% of the richest people accumulate 50% of the total income

In addition, the research presented by the College of Economic Sciences highlights that in the last decade men have obtained approximately 11% higher income from work than women.

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QCOSTARICA – On December 7, the World Inequality Report 2022 was presented in Paris, France, in whose launch the Colegio de Ciencias Económicas de Costa Rica (Costa Rican College of Economic Sciences) participated on behalf of the country with an investigation on wage inequality gender in Costa Rica in the last decade.

“From the study carried out by the College of Economic Sciences, there are data on income inequality by gender and other figures on the gap between people in poverty and those who accumulate greater wealth. As an institution, we are proud to present this research in a high-level setting that allows us to share and compare figures that are essential for decision-making; Mainly in the environment we live in, it is vital to carefully analyze the data and what it reflects on the needs we have as a country. Income inequality and the gender gap must be central themes of economic and social policies,” explained Ennio Rodríguez, president of the College of Economic Sciences.

Growth of inequality

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The World Inequality Report 2022 shows that, in Costa Rica in 2021, 10% of the people with the greatest wealth accumulated 50% of the country’s income (20% is accumulated only by the 1% of the richest people), while the 50% of people with less wealth barely accumulated 10% of the income.

Another way to illustrate these data is to think that the 10% of the people with the greatest wealth earned 25 times the income of the 10% of the people with the least wealth. “It should be noted that Costa Rica compares favorably with the results of the Latin American region. The total for the region shows that the 10% of the people with the greatest wealth accumulated 55% of the income generated in 2021 in the region, while the 50% with the least wealth accumulated only 10%” added economist Luis Vargas.

On the other hand, when comparing Costa Rica with European countries (which are the majority of the OECD), it is a more unequal country. In European countries, the 10% of people with the greatest wealth accumulated 36% of total income and the 50% with the least wealth close to 20%.

Image from 2costaricarealestate.com

Gender differences in income from work

Also, the results of the research of the College of Economic Sciences entitled: “Gender Labor Earnings Gap in Costa Rica Over the Last Decade: What Drives It and the Effect of the Covid-19 Pandemic”, indicate that the gender wage gap in Costa Rica has consistently favored men over the past decade by 11%.

According to Vargas, “despite the higher education and relative labor participation of women, the gender pay gap persists. The result occurs despite the fact that in the last decade women have accumulated higher levels of education and relative participation in the labor market compared to men.”

Data from the National Institute of Statistics and Census of Costa Rica (INEC) Continuous Employment Survey show that in the last 10 years there have been periods where women’s earnings exceed men’s. However, once an estimate is made that takes into account factors related to the wage gap, such as human capital (educational level and experience) and those associated with employment (level of qualification of the occupation or whether the job is part-time or full-time), it is obtained that men’s salaries exceed those of women in the entire period analyzed (adjusted gap).

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“The study also concludes that, to a large extent, this gap can be explained by gender discrimination in the labor market and the weakness of care networks in an environment in which women assume more than proportionally the tasks of caring for children and older adults in homes”, explained Ennio Rodríguez.

The research also analyzes the effect of Covid-19 on the gender pay gap, in which case women are less affected than men. However, the labor market goes beyond wages, which only consider those who manage to stay in the labor market. When exclusion and reintegration into the labor market are analyzed, it can be seen with great clarity that women have been much more affected by the pandemic than men.

Source: Colegio de Ciencias Económicas en la Segunda Conferencia Mundial sobre Desigualdad; Revista Summa

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