Skip to main content

2009-10-07 | project

Conservation Polices and Labor Markets: Unraveling the Effects of National Parks on Local Wages in Costa Rica

The parks’ entrance location and the possibility of agricultural workers to switch to service activities can be important tools to take advantage of the economic benefits of parks.

Despite of the clear global environmental benefits of increasing the amount of protected areas, how these conservation policies affect the well being of individuals in nearby localities is still under debate. Using household surveys with highly disaggregated geographic reference, we explore how national parks have affected wages in Costa Rica. We show conditions in which the effects on local welfare can be positive or negative in different parks or even within different areas of a park. Wages close to parks are higher only when located close to tourists’ entrances. Workers close to entrances are not only employed in higher paid activities (non-agricultural activities) but also receive higher payments in these activities. Agricultural workers, however, are never better off close to parks (close or far from the entrance). Also, workers close to parks but far away from tourists’ entrances earn similar or lower wages than those workers far away from parks. Our results are robust to different econometric approaches (OLS and matching techniques). The parks’ entrance location and the possibility of agricultural workers to switch to service activities can be important tools to take advantage of the economic benefits of parks.