Analysis of income inequality in Costa Rica

The purpose of this paper is to analyze income inequality in Costa Rica, a small Latin American country, with the human capital theory approach. The results show a difference of returns to schooling, as evidenced by a large gap between secondary and university graduates' incomes. An even larger difference is observed between illiterate people and those with just a primary education. The implication from this study is that a policy should be in place to improve the level of educational attainment to reduce the inequality in the income distribution. This study also finds significant differences of income when gender and zoning factors are considered, suggesting that the Government of Costa Rica will have to increase its effort to raise the level of education for women and for those live outside the metropolitan areas