Introduction: The Happiness Paradox of Costa Rica

Imagine walking through a vibrant village market where laughter fills the air, friends greet each other warmly, and the
scent of fresh produce mingles with a crisp breeze. One might assume such scenes would unfold in the streets of a
wealthy, prosperous nation, but instead, they play out in a small country with a modest economy, far removed from the
centres of global finance. Despite its limited economic power, this country ranks among the happiest places on earth—
a striking contrast to wealthier nations where material success and financial growth are often seen as the main pathways
to a fulfilling life.
The Myth of Wealth as the Key to Happiness
In today’s world, wealth is often seen as synonymous with happiness. High GDPs, luxury lifestyles, and influential
corporations are presented as the ultimate benchmarks of progress, shaping a collective belief that economic growth
directly translates into greater life satisfaction. Success stories from powerful economies reinforce the idea that
happiness is closely tied to prosperity and consumer abundance. Yet, when we look beyond these traditional measures
of success, we find an intriguing reality: some of the happiest places on earth are not the wealthiest. These countries
don’t dominate global markets, boast sky-high incomes, or live in luxury. Surprisingly, they often achieve high levels
of happiness and well-being with far fewer material resources. World Happiness Report
The Happiness Index: A Broader Measure of Well-Being
This paradox challenges the conventional assumption that high incomes correlate with personal contentment. Some of
the countries that score highest on happiness indices, such as the World Happiness Report and the Happy Planet Index,
focus instead on values like community well-being, environmental sustainability, and the quality of personal
connections. These indices take a more comprehensive view of happiness, considering factors like social support,
physical health, life satisfaction, and ecological impact—elements often absent in traditional economic measures.
Countries with lower GDPs tend to perform better on these indices, suggesting that happiness may not be as tightly
linked to wealth as commonly assumed. [Link]
Interestingly, high-GDP nations, despite their economic success, often grapple with rising stress, mental health issues,
and social isolation. Their focus on constant growth, consumerism, and production sometimes overshadows the deeper
sense of contentment that their citizens seek. Environmental degradation, high work demands, and endless consumption
may detract from the true quality of life.
A New Definition of Wealth: The Costa Rican Model
In contrast, countries that achieve high happiness scores with modest GDPs seem to define wealth in a way that resonates
more deeply with the human experience. Instead of chasing higher incomes and greater consumption, these nations often
emphasize values prioritizing personal and collective well-being. Costa Rica is one of the most striking examples of this
phenomenon. Known for its lush natural beauty and strong community ties, Costa Rica consistently ranks as one of the
happiest countries in the world, despite having a modest economy. Its success lies not in its material wealth but in its
unique blend of social cohesion, environmental mindfulness, and a culture deeply connected to nature.
Exploring Costa Rica’s path to happiness offers valuable insights into how a small country can create a sense of well-
being that goes beyond financial success. Through its distinctive cultural values, environmental priorities, and social
policies, Costa Rica has developed a model of well-being that celebrates balance, sustainability, and the importance of
community. This approach challenges the idea that prosperity equals happiness and offers a blueprint for other nations
seeking to prioritize the well-being of their citizens over material gain.
History and Culture: Foundations of Costa Rica’s Identity
1. Indigenous Roots and the Foundations of Costa Rica’s Cultural Identity
Costa Rica’s cultural identity traces back to its indigenous peoples, including the Chorotega, Bribri, and Boruca. These
societies were characterized by their deep connection to the land and nature, emphasizing sustainability and
environmental stewardship. For example, the Chorotega people are famous for their ceramic artistry, and the Diquís
Valley, home to the mysterious stone spheres, reflects the advanced craftsmanship of these civilizations. The values of
living harmoniously with the environment were central to their cultures, setting the stage for Costa Rica’s modern
environmental consciousness. [Link]
These early societies, while not as large or centralized as those of the Aztecs or Incas, laid the groundwork for the
principles of sustainable living that remain prevalent in Costa Rican culture today. They fostered a relationship with
nature that would influence the country's later environmental policies.
2. Spanish Colonial Influence and the Road to Independence (1502-1821)
The arrival of Christopher Columbus in 1502 marked the beginning of Spanish colonization. However, unlike other
Latin American territories that were rich in gold and silver, Costa Rica’s lack of precious resources led the Spanish to
focus on small-scale agriculture. This early period resulted in a more egalitarian society, where the colonial system did
not fully mirror the rigid hierarchies seen in other parts of Latin America. This helped to shape the peaceful and
cooperative society that would define modern Costa Rica. History of Costa Rica
After declaring independence from Spain in 1821, Costa Rica solidified its commitment to democratic governance. Its
geographical isolation and lack of military conflict contributed to a culture of peace that would later become a national
hallmark.
3. Coffee Economy and Democratic Development (1840s-1948)
Following independence, Costa Rica's economy shifted toward coffee cultivation, with coffee exports becoming the
country’s primary source of income by the mid-19th century. Coffee was so valuable that it came to be referred to as the
“golden bean.” This agricultural boom spurred economic development, which was channelled into the establishment of
a strong education system and modern infrastructure. By the 1850s, the rise of the middle class in Costa Rica was
supported by the profits from coffee exports. Costa Rica Coffee history
However, this period was not without its tensions. Political unrest culminated in the 1948 Civil War, after which Costa
Rica made a historic decision: it abolished its military. Resources, once allocated for defence, were redirected into social
welfare programs such as universal healthcare and education, paving the way for the country’s modern-day commitment
to peaceful coexistence and social stability.
4. Environmental and Economic Evolution in the Modern Era (1970s-Present)
From the 1970s onwards, Costa Rica emerged as a global leader in environmental conservation. The country made
groundbreaking decisions to preserve its natural heritage, setting aside vast portions of its land for national parks and
protected areas. By the early 21st century, Costa Rica had achieved an impressive feat: nearly 99% of its electricity came
from renewable sources such as hydropower, wind, and solar energy. This remarkable shift in energy production made
Costa Rica a beacon for sustainability worldwide. Costa Rica Tourism
This commitment to the environment was matched by Costa Rica’s economic diversification. Along with its thriving
eco-tourism industry, the country attracted international investment in the fields of high-tech manufacturing and medical
devices, further establishing itself as a hub for sustainable growth.
5. Land and Environment: Costa Rica’s Pristine Tapestry of Nature
Costa Rica is home to 5% of the world’s biodiversity, despite occupying just 0.03% of the Earth’s landmass. The
country’s commitment to environmental conservation is reflected in the extensive network of national parks and wildlife
reserves that protect its rainforests, volcanic regions, and pristine coastlines. Policies focused on biodiversity protection
have helped the nation balance development with environmental sustainability, fostering an eco-tourism industry that
attracts millions of visitors annually. Costa Rica’s innovative Payment for Environmental Services (PES) program has
also incentivized private landowners to preserve forests and other natural resources. Costa-Rica-biodiversity. These
conservation efforts not only preserve the natural beauty of Costa Rica but also promote a model of sustainable
development that other countries look to emulate.
6. The Costa Rican People: Living the “Pura Vida” Lifestyle
One of the most cherished aspects of Costa Rican culture is the concept of “pura vida” (pure life). This phrase embodies
the Costa Rican approach to life, emphasizing gratitude, joy, and an appreciation for the simple pleasures in life. Costa
Ricans, affectionately known as “Ticos”, live by the principle of “pura vida”, which has become synonymous with the
country's relaxed lifestyle and sense of contentment. The people of Costa Rica are often seen as optimistic, peaceful,
and community-oriented—values that are at the heart of the nation’s happiness rankings.
Costa Rica’s universal healthcare system and high literacy rates contribute significantly to the high quality of life
experienced by its citizens. With healthcare accessible to all citizens and a strong focus on education, the country
promotes the well-being of its people in ways that go beyond economic wealth. Costa Rica Lifestyle
7. A Dynamic and Green Economy: Sustainability Meets Growth
The Costa Rican economy has evolved from its dependence on agriculture to become a leader in green technology and
sustainable practices. In recent years, Costa Rica has attracted global companies like Intel, which established
manufacturing facilities in the country, benefiting from its educated workforce and stable economy. Costa Rica also
fosters medical device manufacturing and technology innovation, industries that align with the nation’s sustainable
growth model.
As of today, nearly 99% of the country’s electricity is generated from renewable energy sources, and the nation continues
to push forward with initiatives aimed at carbon neutrality. Costa Rica is on track to become the first carbon-neutral
country by 2050, a testament to its commitment to sustainable development. Costa Rica Sustainability

8. Government and Society: A Bold Experiment in Peace and Progress

Costa Rica is renowned for its political stability and commitment to peace. After the civil war in 1948, the country made
the radical decision to disband its military forces. Resources that would have gone into defence were instead invested
in education, healthcare, and social welfare programs. Today, Costa Rica enjoys one of the highest standards of living
in Latin America, with a well-functioning democratic system and a focus on social welfare. Costa Rica Politics
This focus on social progress, combined with the country’s commitment to democratic values and equality, has earned
Costa Rica the title of the "Switzerland of Central America". The peaceful nature of the country, along with its focus on
social welfare, has helped it become one of the most stable and prosperous nations in the region.
9. Cultural Life and Heritage: The Heartbeat of Costa Rican Identity
Costa Rican culture is a vibrant blend of indigenous, Spanish, and Afro-Caribbean influences. This rich heritage is
celebrated through music, dance, art, and festivals. Traditional music often features the marimba, while folklore comes
alive during festivals with colourful costumes and spirited dances. Family gatherings and community events are central
to Costa Rican culture, where people cherish moments together and pass down stories, crafts, and recipes that have
defined their way of life for generations.
The “Pura Vida” philosophy permeates daily life, encouraging simplicity, gratitude, and harmony with others and the
environment. Artisans in local villages continue to produce crafts such as intricately painted oxcarts, a symbol of Costa
Rican heritage. Adorned with vivid designs, each oxcart tells a story of rural life and artistic passion. Costa Rica’s
culinary traditions reflect this cultural fusion, blending indigenous ingredients with Spanish influences to create dishes
like Gallo Pinto, a national favourite.
As Costa Rica evolved from its indigenous roots to its post-independence development, its strong foundations in peace,
sustainability, and social welfare became key factors in shaping the nation's modern identity. The country’s commitment
to democratic values, environmental protection, and high quality of life has not only created a stable and prosperous
society but also earned it a prominent place on global indices measuring well-being. One such measure is the Happy
Planet Index (HPI), which evaluates the success of nations in providing long and happy lives to their citizens while
maintaining a sustainable balance with the planet. Costa Rica’s remarkable performance on the HPI underscores the
successful integration of these core values into the nation's overall well-being. Let’s take a closer look at how the
components of the HPI contribute to Costa Rica’s position as a global leader in sustainability and happiness.

The graphs provided illustrate trends in Costa Rica’s Happy Planet Index (HPI) and its components from 2006 to 2021,
including Life Expectancy, Ladder of Life (a wellbeing measure), Wellbeing, Carbon Footprint, and overall HPI. Let’s
break down each component and analyse their implications for the HPI:
1. Life Expectancy
Trend: Life expectancy has remained relatively stable, staying between 78 and 80 years over the observed period.
However, there's a slight dip around 2021.
Explanation: High life expectancy in Costa Rica reflects its robust healthcare system, which emphasizes preventive
care and primary healthcare access. This stability indicates Costa Rica’s strong focus on health and wellness as a public
policy priority.
Implications for HPI: A stable and high life expectancy positively contributes to HPI, indicating that Costa Ricans
generally enjoy long, healthy lives, a crucial factor in subjective wellbeing and overall happiness.
2. Ladder of Life (0-10)
Trend: The "Ladder of Life" score, representing subjective wellbeing, fluctuated slightly but generally stayed around 7.
There was a minor decline around 2016-2017, followed by some recovery.
Explanation: The "Ladder of Life" scale measures people’s perceived quality of life, which is shaped by factors like
economic stability, personal security, and social connections. The steady level suggests Costa Ricans have relatively
high life satisfaction.
Implications for HPI: The consistent Ladder of Life score reflects sustained life satisfaction, supporting a high HPI.
Subjective wellbeing is integral to HPI, as it reflects how people feel about their lives overall, rather than only objective
measures like income.
3. Well-being
Trend: The Wellbeing score stayed around 7 over the years but shows a projected decline post-2021.
Explanation: Wellbeing is influenced by multiple factors, including health, social conditions, and environmental
quality. The projected decrease could indicate future challenges in sustaining these conditions, possibly due to economic,
environmental, or social pressures.
Implications for HPI: A drop in well-being would negatively impact HPI, as it reflects people’s overall quality of life.
Monitoring and maintaining wellbeing would be essential to keep HPI high, emphasizing the need for policies that
address both mental and physical health, alongside environmental concerns.
4. Carbon Footprint (tCO2e)
Trend: Costa Rica's carbon footprint remained relatively low, between 2 and 4 tons of CO₂ equivalent per capita,
showing slight variations but a projected gradual increase post-2021.
Explanation: Costa Rica has achieved a low carbon footprint through investments in renewable energy, forest
conservation, and sustainable policies. However, the projected rise could be due to increased development or population
growth.
Implications for HPI: A low carbon footprint positively impacts the HPI by promoting environmental sustainability
and reducing ecological stress. Increasing footprints might reduce HPI, as environmental degradation diminishes the
quality of life and future sustainability. Continued efforts in eco-friendly policies would help Costa Rica maintain a
lower footprint.
5. Happy Planet Index (HPI)
Trend: The HPI for Costa Rica has remained relatively high, fluctuating between 50 and 65. The trend shows stability,
with minor decreases in recent years.
Explanation: HPI combines well-being, life expectancy, and ecological impact (carbon footprint) to provide a measure
of sustainable happiness. Costa Rica’s high HPI reflects its success in maintaining high life satisfaction and life
expectancy alongside a low ecological impact.
Implications for HPI: The HPI suggests Costa Rica is a model for sustainable well-being, balancing quality of life with
environmental stewardship. However, any decline in well-being or an increase in the carbon footprint could lower HPI.
Thus, policies must aim to sustain well-being while keeping the ecological impact low.
Summary and Implications
Costa Rica’s high HPI can be attributed to its high life expectancy, moderate well-being, and low carbon footprint.
Maintaining these factors is crucial for future HPI. As Costa Rica continues to develop, balancing economic growth
with environmental sustainability will be essential to preserving high life satisfaction and a low ecological footprint. A
declining well-being trend or rising carbon footprint could impact future HPI negatively, underlining the need for
proactive measures in health, social welfare, and environmental policies.
Building on the analysis of Costa Rica’s Happy Planet Index (HPI) and its key components, we can now explore the
broader trend in Costa Rica’s happiness index from 2013 to 2023. While the HPI reflects the country's overall
sustainability in balancing well-being and environmental impact, the happiness index provides a more direct measure
of how the population perceives their quality of life over time. By examining these two metrics together, we gain a
clearer understanding of how Costa Rica's social, economic, and environmental policies have influenced both the
objective and subjective aspects of happiness. The following section delves into the trends and implications of Costa
Rica's happiness index from 2013 to 2023.
Happiness Index (2013 - 2023):

• Trend: Costa Rica's happiness index has shown a relatively stable trend from 2013 to 2023, with minor
fluctuations. The index was around 7.26 in 2012 and slightly declined through the following years. In 2014, it
dropped to 7.23, and by 2015, it had reduced further to 7.09. From 2016 to 2019, the index stayed in the range
of approximately 7.07 to 7.17, showing resilience despite global challenges. However, a notable dip occurred
in 2021, with the index falling to 6.58. After that, there was a gradual recovery, reaching 7.08 in 2023.
• Explanation: The consistent ranking of Costa Rica among the higher happiness scores reflects its stable social
and environmental policies, strong healthcare and education systems, and focus on sustainable living. The
temporary drop in the happiness index around 2020-2021 aligns with the global impact of the COVID-19
pandemic, which may have affected economic stability, mental health, and social well-being. Costa Rica’s
recovery trend after 2021 suggests resilience in its social fabric and policies that prioritize citizens' well-being.
This stability can positively influence long-term economic and social outcomes by fostering a supportive and
balanced environment for its citizens. World Data Atlas - Costa Rica Happiness Index
Having explored the trends in Costa Rica’s happiness index, we now turn to a more in-depth statistical approach to
understand the determinants of the country's Happy Planet Index (HPI). While the happiness index offers valuable
insights into how Costa Ricans perceive their well-being, the regression analysis provides a statistical model to quantify
the impact of various socioeconomic and environmental factors on HPI. By analyzing factors such as life expectancy,
education spending, income inequality, greenhouse gas emissions, forest area, and GDP per capita, this regression model
helps us identify the key drivers of Costa Rica’s sustainable happiness. In the following section, we will examine the
results of this analysis to better understand the relationships between these variables and Costa Rica's HPI.
Determinants of Costa Rica’s Happy Planet Index (HPI)
Introduction
Regression analysis explores the socioeconomic and environmental factors influencing Costa Rica’s Happy Planet Index
(HPI)—a measure that balances human well-being, life expectancy, ecological impact, and sustainability. By examining
Costa Rica’s life expectancy, education spending, income inequality (Gini Index), greenhouse gas (GHG) emissions,
forest area, and GDP per capita, we can identify the unique contributions of each factor to the HPI, reflecting Costa
Rica's commitment to sustainable and holistic development.
Regression Equation
The regression equation derived from the model is:
HPI=−394.52+(1.21⋅Life Expectancy)+(8.58⋅Education Spending)+(1.33⋅Gini Index)+(19.05⋅GHG Emissions)+(0.02⋅
Forest Area)−(0.20⋅GDP per Capita)
Analysis of Each Variable’s Influence on HPI
1. Life Expectancy (Coefficient = 1.21)
Interpretation: Life expectancy has a significant positive effect on the HPI. The coefficient of 1.21 means that for each
additional year in life expectancy, the HPI score is projected to increase by 1.21 units. This aligns with the understanding
that longevity is a key component of a country’s overall happiness and well-being. Higher life expectancy often results
from access to quality healthcare, better living conditions, and a healthy environment—all elements that contribute
positively to HPI.
Implication: Costa Rica’s focus on healthcare, including preventive care and accessible health services, likely
contributes to higher life expectancy. By prioritizing health, the nation ensures that its population lives longer, healthier
lives, which directly correlates with happiness and satisfaction. The importance of life expectancy in the HPI score
reflects Costa Rica’s commitment to the health and welfare of its people as central to sustainable happiness.
2. Government Education Spending (Coefficient = 8.58)
Interpretation: Government expenditure on education as a percentage of GDP has a substantial positive impact on the
HPI, with each additional percentage point increase in education spending associated with an 8.58-point rise in HPI.
This indicates that education plays a significant role in the country’s happiness, possibly by providing citizens with
knowledge and skills that improve their quality of life, increase employability, and raise awareness about environmental
sustainability.
Implication: Higher investment in education is often linked to a more informed and capable society, fostering values of
inclusivity and environmental consciousness. Costa Rica’s dedication to education empowers citizens to make informed
decisions that positively impact both personal well-being and societal well-being. This contributes to a higher HPI score,
as education promotes not only economic growth but also social and environmental awareness—key elements in
achieving sustainable happiness.
3. Gini Index (Coefficient = 1.33)
Interpretation: The Gini Index measures income inequality, and its positive coefficient (1.33) suggests a nuanced
relationship with HPI. While high-income inequality can negatively impact happiness in many societies, Costa Rica’s
moderate inequality appears to have a positive relationship with HPI, perhaps due to the country’s strong social safety
nets, community support systems, and access to public services, which help mitigate the adverse effects of income
inequality on well-being.
Implication: Costa Rica’s social structure may allow it to maintain a high level of happiness despite some level of
income inequality. The country’s community values, accessible healthcare, and educational systems help ensure that
citizens have a good quality of life, even if income distribution is not entirely equal. This reflects Costa Rica’s ability to
balance economic inequality with strong social support mechanisms, reinforcing that societal well-being is maintained
even amidst moderate inequality.
4. Greenhouse Gas (GHG) Emissions (Coefficient = 19.05)
Interpretation: The positive coefficient for GHG emissions (19.05) is unexpected, as high emissions are typically
associated with negative environmental impacts. However, in Costa Rica’s case, this result may reflect the nation’s
proactive approach to offsetting emissions through extensive conservation efforts and renewable energy initiatives.
Costa Rica is well-known for its commitment to sustainability, and it has achieved significant reductions in net emissions
by conserving natural resources and investing in renewable energy.
Implication: Costa Rica’s approach to managing GHG emissions demonstrates that economic activities that produce
emissions can coexist with high HPI if balanced by environmental sustainability measures. The high coefficient indicates
that Costa Rica’s economic activities, such as tourism and agriculture, may generate emissions, but their environmental
policies effectively neutralize the potential harm. This highlights Costa Rica’s model of managing emissions sustainably,
balancing environmental impact with economic and social benefits.
5. Forest Area (Coefficient = 0.02)
Interpretation: The coefficient for forest area (0.02) is positive, though modest, indicating that each additional square
kilometre of forest area slightly increases HPI. Forests play a critical role in Costa Rica’s ecosystem, providing habitat
for biodiversity, regulating the climate, and offering recreational spaces for residents, all of which enhance quality of
life.
Implication: Costa Rica’s commitment to forest conservation supports both environmental stability and the happiness
of its citizens. Forests contribute to cleaner air, more green spaces, and better resilience to climate change, all of which
are appreciated by the population and contribute to a higher quality of life. Forest conservation aligns with Costa Rica’s
vision of sustainable development and contributes positively to its HPI.
6. GDP per Capita (Coefficient = -0.20)
Interpretation: GDP per capita has a slight negative effect on HPI, suggesting that higher levels of wealth do not
necessarily increase happiness in Costa Rica. This result reflects the Costa Rican perspective that economic prosperity
alone is not a primary driver of happiness.
Implication: Costa Rica’s focus on well-being, social equity, and environmental conservation over pure economic
growth is consistent with this finding. The negative relationship between GDP per capita and HPI highlights Costa
Rica’s holistic approach, where quality of life, community, and ecological health are more valuable than income alone.
Summary of Findings:
The regression analysis reveals that Costa Rica's high HPI is primarily driven by its focus on health, education, and
environmental conservation, rather than economic wealth. Life expectancy and education spending are key contributors
to the HPI, supported by strong social systems that mitigate income inequality. Despite a slight negative relationship
with GDP per capita, Costa Rica's approach prioritizes quality of life, community, and sustainability, positioning it as a
model of sustainable happiness.
Disclaimer:
This analysis provides insights into the relationships between various socioeconomic and environmental factors and
Costa Rica’s Happy Planet Index (HPI). The findings should be understood as theoretical contributions, and further
empirical research is needed for a comprehensive understanding of the underlying dynamics.
Building on the insights from the regression analysis, which highlighted the key socioeconomic and environmental
drivers of Costa Rica’s Happy Planet Index (HPI), the next section of this report delves deeper into specific indicators
that further illuminate the factors shaping the country’s overall well-being and sustainability. By examining economic
indicators, health metrics, education outcomes, and the employment landscape, we can gain a more nuanced
understanding of how these elements contribute to Costa Rica's prosperity and its model of sustainable development.
Additionally, qualitative indicators will be explored to provide a holistic view of the factors influencing happiness and
quality of life in Costa Rica.
Economic Indicators and Trends: A Path to Sustainable Growth

1. GDP (current US$ in Billions)

• Trend: The GDP of Costa Rica shows a consistent upward trend from 2000 to 2023, with noticeable growth
accelerations around 2010 and a steep rise toward 2023.
• Explanation: This steady increase in GDP reflects Costa Rica’s economic development over the years, likely
fueled by sectors such as ecotourism, technology, and renewable energy. The jump towards the end may also be
influenced by recovery efforts and economic stimulus measures following global disruptions like the COVID-
19 pandemic. Costa Rica’s focus on sustainable development and attracting foreign direct investment has
positively impacted its economic growth, allowing it to grow consistently.
2. Inflation, Consumer Prices (Annual %)
• Trend: Inflation shows volatility in the early 2000s, peaking around 16% and then gradually stabilizing. From
around 2010 onwards, inflation trends downward, reaching low levels, with a brief spike around 2022 followed
by a sharp drop.
• Explanation: The high inflation rates in the early 2000s could be attributed to global economic volatility,
including rising oil prices or internal economic adjustments. The stabilization in inflation after 2010 reflects
Costa Rica’s effective monetary policies, likely involving interest rate management and currency stability
efforts. The spike in 2022 could be linked to global inflation pressures from supply chain disruptions and
increased commodity prices due to factors like the pandemic and geopolitical events. The subsequent drop
indicates a return to more stable pricing, which aligns with recent international trends in reducing inflation.
3. GDP per Capita (current US$ in Thousands)
• Trend: The GDP per capita shows a positive trend, with gradual growth from 2000 to around 2020, and a
sharper rise toward 2023.
• Explanation: The GDP per capita increase indicates economic improvement per individual, suggesting rising
standards of living in Costa Rica. The spike toward the end may correlate with the overall economic recovery
and growth following the pandemic, reflecting effective economic management and development policies.
Growth in sectors like tourism, agriculture, and technology has likely played a role in increasing per capita
income, allowing Costa Rica to improve its average wealth per person while maintaining population growth.
4. Population, Total (In Millions)
• Trend: The population graph shows a steady and gradual increase from 2000 to 2023, without sharp changes.
• Explanation: Costa Rica’s population growth rate is relatively stable, reflecting natural growth and limited net
migration. The stability in population growth is an advantage for economic planning, as it allows the government
to forecast and meet the needs of its citizens. With a manageable population growth rate, Costa Rica can more
effectively focus on sustainable economic growth, environmental conservation, and social welfare.
Health Indicators: Assessing Well-being and Longevity

Costa Rica's Health Indicators

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Life expectancy at birth, total (years)

Mortality rate, under-5 (per 1,000 live births)
Maternal mortality ratio (national estimate, per 100,000 live births)
Mortality rate, infant (per 1,000 live births)

The chart shows trends in Costa Rica’s health indicators over time, including life expectancy at birth, infant mortality
rate, under-5 mortality rate, and maternal mortality ratio from 2000 to 2022. Let’s analyse each indicator and its trend
in detail.
1. Life Expectancy at Birth (total years)
• Trend: The life expectancy at birth has shown a consistent upward trend, with only slight fluctuations,
indicating improvements in overall health, quality of life, and longevity. Costa Rica's life expectancy remains
high compared to many countries, reflecting strong healthcare and social support systems.
• Explanation: Costa Rica’s public healthcare system, known as the Caja Costarricense de Seguro Social
(CCSS), is renowned for providing universal healthcare. This system has contributed to better preventive care,
high vaccination rates, and accessible medical services, which have positively impacted life expectancy (World
Bank - Costa Rica Healthcare). Additionally, Costa Rica’s stable environment, clean water, and healthy diets
contribute to longer life spans. The government's efforts toward reducing poverty and ensuring access to
healthcare for all have played a critical role here (Pan American Health Organization - Costa Rica).
2. Mortality Rate, Under-5 (per 1,000 live births)
• Trend: The under-5 mortality rate has gradually declined over the years, indicating improvements in child
healthcare, nutrition, and vaccination programs.
 • Explanation: Costa Rica has implemented successful public health policies targeting child mortality, such as
widespread immunization, improved access to nutrition, and sanitation improvements (WHO - Child Mortality
Costa Rica). Programs promoting maternal and child health have been effective in reducing early childhood
diseases and preventing premature deaths. Investments in health infrastructure and education have empowered
parents to seek timely healthcare, further reducing child mortality rates (World Bank Data).
3. Maternal Mortality Ratio (per 100,000 live births)
• Trend: The maternal mortality ratio shows a declining trend, though the change is more gradual compared to
other indicators.
• Explanation: Maternal health in Costa Rica has benefitted from skilled birth attendants, better prenatal and
postnatal care, and education on maternal health (Pan American Health Organization). Programs focusing on
reducing maternal mortality often involve healthcare professionals trained in emergency obstetric care,
improving maternal outcomes. However, challenges still remain due to geographic and socio-economic
disparities, as rural or indigenous communities sometimes face barriers to accessing consistent medical care
(World Bank Data on Maternal Mortality). The gradual decline shows that while healthcare for pregnant women
has improved, some areas still require attention to reduce maternal mortality further.
4. Infant Mortality Rate (per 1,000 live births)
• Trend: Similar to the under-5 mortality rate, the infant mortality rate has declined, showing consistent
improvements in neonatal and infant health services.
• Explanation: Decline in infant mortality can be attributed to Costa Rica’s focus on maternal health, high
vaccination coverage, and improvements in neonatal care (WHO Costa Rica - Infant Mortality). Efforts to
provide antenatal care, skilled birth attendance, and initiatives for breastfeeding and newborn care have been
instrumental. The government’s investment in healthcare accessibility, even for vulnerable populations, has led
to lower infant mortality rates (World Bank Data on Infant Mortality).
Education Indicators: Measuring Access, Quality, and Impact

Costa Rica's Education Indicators

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The chart presents three key educational indicators in Costa Rica from 2000 to 2022: government expenditure on
education as a percentage of GDP, primary school enrollment rate, and educational attainment at least completed lower
secondary education (for population aged 25+).
1. Government Expenditure on Education (% of GDP)
• Trend: Government expenditure on education as a percentage of GDP has remained fairly steady over the years.
 • Explanation: Costa Rica has consistently invested a significant portion of its GDP in education, maintaining
one of the highest education budgets in Latin America. This commitment reflects the government's focus on
human capital development and its belief that education is fundamental to economic and social progress. High
investment levels support public schooling, teacher salaries, infrastructure, and educational resources, which
has kept education accessible and equitable across the country (World Bank - Costa Rica Education
Expenditure).
2. School Enrolment, Primary (% Gross)
• Trend: The primary school enrolment rate remains consistently high, reflecting near-universal enrolment in
primary education.
• Explanation: Costa Rica has achieved universal primary education, a milestone attributed to its well-developed
education policies. Compulsory education laws ensure that children enrol in and complete primary school. In
addition, the Costa Rican government provides various programs to reduce dropout rates and improve school
retention, especially for children from disadvantaged backgrounds (UNESCO - Costa Rica Primary Education).
The high enrolment rate indicates that almost all school-age children are entering primary school, laying a strong
foundation for literacy and further education.
3. Educational Attainment, At Least Completed Lower Secondary (% of Population 25+)
• Trend: The rate of educational attainment for completing at least lower secondary education among adults (age
25+) shows a slow but steady increase over time.
• Explanation: This gradual increase suggests that more adults are completing secondary education, which may
be linked to sustained government efforts to improve educational access, quality, and retention rates. Over the
years, Costa Rica has implemented initiatives to expand secondary education opportunities, particularly in rural
areas. These programs have encouraged students to continue their education beyond the primary level (OECD
- Education in Costa Rica). However, the slow rate of increase reflects the challenges of achieving universal
secondary education, especially among older populations who may not have had access to the same level of
educational resources in the past.
Employment Landscape: Analysing Trends, Opportunities, and Challenges

Costa Rica's Employment Landscape

100%

80%

60%

40%

20%

0%
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2016
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Labor force participation rate, total (% of total population ages 15-64)

(modeled ILO estimate)
Unemployment, total (% of total labor force) (national estimate)

The chart shows two employment indicators in Costa Rica from 2000 to 2022: the labor force participation rate and the
unemployment rate. Here’s a detailed analysis of each indicator:
1. Labor Force Participation Rate (% of Total Population Ages 15-64)
Trend: The labor force participation rate has remained close to 100% over the years.
Explanation: Costa Rica’s consistently high labour force participation rate reflects a strong level of engagement from
the working-age population. This trend is influenced by several factors:
• Economic Structure: Costa Rica’s economy is diversified across sectors such as agriculture, manufacturing,
services, and tourism, creating opportunities for a wide range of skills and education levels. This diversity
enables the majority of the working-age population to participate in the workforce.
• Social Investment: Costa Rica is known for its high investment in education and healthcare, contributing to an
educated and healthy workforce that is well-prepared for employment opportunities (World Bank - Costa Rica
Social Investment).
• Stable Political Environment: Costa Rica’s stable democratic government fosters a secure environment for
employment, which likely supports consistent workforce participation rates (ILO Costa Rica Labor Force Data).
2. Unemployment Rate (% of Total Labor Force)
Trend: The unemployment rate fluctuates over the years, with a notable increase starting around 2018 and peaking
in 2020.
Explanation:
• Global Financial Crisis and Aftermath: Although Costa Rica was not severely impacted by the 2008 global
financial crisis, it did experience some economic slowdown, leading to minor increases in unemployment during
that period. Certain sectors, like manufacturing and exports, faced reduced demand, which affected employment
levels.
• Structural Economic Changes: Costa Rica’s shift from an agriculture-based economy to one focused on
services and technology sectors may have impacted employment rates, especially for workers from traditional
sectors who may require reskilling or additional training (OECD - Costa Rica Economic Assessment).
• COVID-19 Pandemic Impact: The sharp rise in unemployment in 2020 is primarily due to the COVID-19
pandemic, which severely impacted Costa Rica’s tourism and services sectors—key areas of employment.
Lockdowns, travel restrictions, and reduced consumer spending led to significant job losses across industries,
with tourism being especially hard-hit due to the dependence on international visitors (World Bank - COVID-
19 Economic Impact on Costa Rica).
• Post-Pandemic Recovery: The unemployment rate begins to decrease after 2020 as Costa Rica gradually
recovers from the pandemic. Government support programs and the return of global tourism helped reduce
unemployment, although full recovery remains an ongoing process Post-Covid Costa Rica
Social and Environmental Indicators: Assessing Inequality and Sustainability
1. Gini Index (Income Inequality)
Trend: The Gini index fluctuates around 48–52, with occasional peaks but no clear long-term increase or decrease in
inequality.
Explanation: Income inequality in Costa Rica has remained relatively stable. Government policies in education,
healthcare, and social welfare have helped maintain this stability. However, economic transitions from traditional sectors
to service-oriented industries have created disparities, as some groups struggle to access new, higher-paying jobs without
reskilling.
2. Access to Electricity (% of Population)
Trend: Access to electricity has steadily increased, nearing universal access over time.
Explanation: Costa Rica’s investment in infrastructure has led to nearly 100% electricity access, aligning with its
renewable energy goals. The country generates over 98% of its electricity from renewable sources, primarily
hydropower, reinforcing both social and environmental objectives.
3. Forest Area (sq. km)
Trend: A steady increase in forest area is observed, peaking in recent years.
Explanation: Costa Rica’s reforestation and conservation policies, including payment for ecosystem services and eco-
tourism incentives, have significantly boosted forest cover. These efforts have reversed past deforestation rates, with
over 50% of the country now covered by forests, supporting biodiversity and sustainable tourism.
4. Total Greenhouse Gas Emissions Excluding LULUCF per Capita (t CO2e/capita)
Trend: Greenhouse gas emissions per capita show moderate fluctuations with a gradual upward trend, followed by a
dip and a recent rebound.
Explanation: Despite Costa Rica’s carbon-neutral electricity sector, emissions from transportation remain high due to
dependence on road transport. The recent dip reflects reduced economic activity during the COVID-19 pandemic, with
emissions rebounding post-pandemic. The challenge remains to decarbonize transportation to align with Costa Rica’s
net-zero goals.
Building on the insights from Costa Rica's economic and social indicators, it becomes evident that the country's
remarkable achievements in happiness and sustainability are deeply rooted in its strategic policies and initiatives. The
success of Costa Rica in balancing economic growth with environmental preservation and social well-being highlights
a unique model for sustainable development. In the following sections, we will explore how Costa Rica’s commitment
to environmental conservation, renewable energy, social welfare, and community-centered philosophies has propelled
the country to the forefront of global happiness and sustainability rankings. These initiatives not only exemplify Costa
Rica's vision but also provide valuable lessons for other nations, including India, that seek to balance economic progress
with social and environmental well-being
How Costa Rica Achieved High Happiness and Sustainability?
1. Environmental Commitment and Conservation- Costa Rica’s dedication to environmental preservation is a
cornerstone of its national strategy. About 30% of the country's land area is designated as protected, allowing
for rich biodiversity and sustainable tourism.
• Conservation Efforts: Costa Rica doubled its forest cover between the 1980s and 2005, primarily through
reforestation and initiatives like the Payment for Environmental Services (PES) program. PES incentivizes
landowners to protect forests, significantly helping curb deforestation. This initiative has earned international
recognition and is often cited as a model for balancing economic needs with environmental priorities. Learn
more about this initiative in the World Economic Forum.
• Biodiversity Hotspot: Costa Rica is a biodiversity-rich nation, housing about 6% of the world's biodiversity
despite occupying only 0.03% of the planet’s surface. The government's commitment to protecting this
biodiversity has fostered ecotourism, which supports economic growth without damaging natural ecosystems.
 2. Renewable Energy Success- Costa Rica has committed to clean energy, generating around 99% of its electricity
from renewable sources such as hydroelectric, wind, and geothermal power. This commitment has helped Costa
Rica achieve carbon-neutrality goals while ensuring reliable electricity access for its population.
• Clean Energy Leadership: Costa Rica's long-standing focus on renewable energy makes it a global leader in
sustainable power generation. This model demonstrates how a country can rely on clean energy without
sacrificing economic development.
3. Peaceful Society Through Military Absence-- Costa Rica abolished its military in 1949, reallocating the
defence budget to social services, education, and healthcare. This has contributed to a stable, peaceful society
and enabled higher investments in citizens' well-being.
• Redirection of Military Funds: Funds that would have gone toward defence are used to build robust healthcare
and education systems. This decision not only helped create a peaceful society but also allowed Costa Rica to
provide universal healthcare and free primary education, boosting its life expectancy to 80 years. Read more in
the World Economic Forum.
4. Pura Vida Philosophy- “Pura Vida,” or “Pure Life,” is a national philosophy in Costa Rica that emphasizes a
laid-back, community-cantered approach to life. This lifestyle promotes resilience, gratitude, and satisfaction,
contributing to Costa Rica's high happiness levels.
• Emphasis on Life Satisfaction: The “Pura Vida” mindset prioritizes relationships, personal contentment, and
a relaxed lifestyle, all of which are central to Costa Rican culture. It helps reduce stress and encourages social
bonds, which are crucial for mental well-being.
5. Education and Health Investments- Costa Rica’s focus on education and healthcare has improved quality of
life significantly. Free access to primary education and universal healthcare contributes to a high literacy rate of
over 98% and a life expectancy comparable to that of developed nations.
• Universal Healthcare and Education: Costa Rica’s prioritization of healthcare and education has helped build
a more equal and prosperous society, reducing poverty and ensuring a higher standard of living. Learn about
Costa Rica’s social investments in the World Economic Forum.
6. Ecotourism Model- Ecotourism plays a significant role in Costa Rica’s economy. By promoting tourism that
respects the environment, Costa Rica has managed to attract millions of tourists each year while preserving its
natural landscapes.
• Sustainable Tourism: Costa Rica’s sustainable tourism sector not only boosts local economies but also
emphasizes environmental respect. With policies in place to ensure minimal environmental impact, ecotourism
serves as a major income source while supporting conservation.
Lessons for India from Costa Rica
1. Strengthening Conservation Policies- India, with its own wealth of biodiversity, can adopt Costa Rica’s model
by strengthening protected areas and initiating community-based conservation programs.
• Incentivizing Conservation: India could adopt Payment for Ecosystem Services models to encourage
conservation among landowners. By protecting biodiversity-rich areas, India can create job opportunities in
ecotourism and preserve its natural heritage.
2. Expanding Renewable Energy Investments- Costa Rica's success in renewable energy can inspire India to
advance its clean energy goals. Although India has ambitious renewable energy targets, there’s room for more
decentralized systems and innovations.
• Accelerating Renewables: India can leverage its natural resources to expand solar, wind, and hydroelectric
power, potentially meeting its goal of 500 GW of renewable capacity by 2030. Costa Rica’s success underscores
the economic and environmental benefits of clean energy.
3. Investing in Social Welfare Systems- Costa Rica’s strong healthcare and education systems highlight the long-
term benefits of social investment. While India cannot eliminate its military, reallocating a portion of defence
spending to education and healthcare could significantly improve public welfare.
• Public Health and Education: Increasing funding for programs like Ayushman Bharat and public schools,
particularly in rural areas, could yield a healthier, better-educated population. Investing in social services would
reduce poverty and enhance life quality.
4. Building a Community-Focused Culture- India can draw inspiration from Costa Rica’s emphasis on well-
being and social connections. Encouraging community engagement, mindfulness, and mental health awareness
can promote a happier, more cohesive society.

• Promoting Mental Health and Well-Being: Community-based mental health programs, combined with the
Indian tradition of mindfulness, can enhance social harmony and resilience.
5. Promoting Ecotourism- India has the potential to boost its ecotourism sector, benefiting both the economy and
the environment. By focusing on responsible, nature-based tourism, India can protect ecosystems while
supporting sustainable local development.

• Sustainable Tourism Initiatives: States like Kerala, Uttarakhand, and Himachal Pradesh could benefit greatly
from sustainable tourism models. Ecotourism also aligns with India’s goals for biodiversity conservation and
rural development.