Formal employment on the rise in Nicaragua

March 14, 2014

Over 3,100 new employees were affiliated to the Nicaraguan Social Security Institute (INSS, for its acronym in Spanish) in January 2014, a monthly growth of 4.5 percent. The Government of Nicaragua expects a 10 percent growth in the number of Social Security affiliates this year.

Overall, Nicaragua’s labor force consists of 3.2 million people and its working age population comprises 4.1 million people, demonstrating the abundant labor force available. The country’s workforce is young and dynamic as 76 percent of the population is under de age of 39 and the human talent is known to be flexible and highly productive, with good working habits and fast learning skills.

Additionally, Nicaragua is one of the most reliable markets in the region, which has also enhanced formal employment in the country. In the 2013 Labor Market Risk Index, published by the Economist Intelligence Unit, Nicaragua is positioned as the country with the second most reliable labor market in Central America. The report measures indicators such as unions’ strength, labor disputes, wage restrictions, and hiring and firing restrictions.

Furthermore, the Government of Nicaragua, union leaders and the private sector have worked together to urge the protection of formal employment in Nicaragua through the Tripartite Agreement, which consensually establishes the minimum wage under the Free Zone Regime for every year in order to provide predictability in labor costs and to foster the growth of formal employment in the manufacturing sector. In 2012 the agreement was renewed for a third time for the period between 2013 and 2017. Currently, the Free Zones Regime employs 109,310 people.

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