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Labor Demand Dynamics in Costa Rica

Author

Listed:
  • Alonso Alfaro-Ureña

    (Economic Division, Central Bank of Costa Rica)

  • Valerie Lankester-Campos

    (Department of Economic Research, Central Bank of Costa Rica)

Abstract

This paper studies the determinants of the labor demand in Costa Rica through firm level data. It also characterizes formal employment during the last 15 years through a set of stylized facts. The results suggest that: (i) the neoclassical theory of employment holds, (ii) wages are a stronger determinant for labor demand in the manufacturing and construction industries, (iii) employment is more persistent in larger firms, (iv) larger and more technological industries adjust their headcount more heavily to changes in wages and revenue and (v) Costa Rican labor demand is more sensitive to changes in wages but less to changes in production than similar economies. *** Resumen: El presente documento estudia los determinantes de la demanda laboral de la economía costarricense, para lo cual se utilizan datos a nivel de firma. Además, describe el empleo formal mediante un conjunto de hechos estilizados. Los resultados sugieren que: (i) la teoría neoclásica del empleo se cumple, (ii) los salarios son un determinante más fuerte de la demanda laboral en la industrias manufactureras y de construcción, (iii) el nivel de empleo es más persistente en las firmas grandes, (iv) las firmas más grandes y tecnológicas ajustan en mayor medida su planilla ante cambios en salarios e ingresos y (v) la demanda laboral costarricense es más sensible a cambios en los salarios pero menos a cambios en la producción que la de economías similares.

Suggested Citation

  • Alonso Alfaro-Ureña & Valerie Lankester-Campos, 2019. "Labor Demand Dynamics in Costa Rica," Documentos de Trabajo 1906, Banco Central de Costa Rica.
    • Handle: RePEc:apk:doctra:1906
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    File URL: https://repositorioinvestigaciones.bccr.fi.cr/handle/20.500.12506/316
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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