Changes in the School to Work Transition and Its Effect on Educational and Income Inequality

Arodys Robles, Universidad de Costa Rica

The 1980s financial crisis that affected Costa Rica decreased spending in education. Economic policies since have not resulted in an increase of social spending. As a consequence the country was not able to respond to high growth rates of children 5 to 17 during the 1980s. This decrease in enrollment seriously modified the characteristics of the work force. A substantial percentage of the labor force will be those cohorts whose enrollment ratios particularly in secondary school dropped during the 1980s. The paper examines the links between this drop in school enrollment and current and persistent levels of income inequality. Using censuses and household surveys carried out during the 1980s and 1990s I map changes in school to work transitions and their relationship to current household composition and income. Preliminary results show that a substantial part of income inequality is due to educational inequality generated by a decrease in social spending.