The annual report on Costa Rica’s “State of the Nation” shows some disheartening realities with 20 percent of households stuck in a cycle of poverty and exclusion.

While some families in extreme poverty, notably in rural areas, got a foothold out of their dire situation over the past year, this appears mainly due to government aid programs, and not due to permanent economic solutions or changes for these families.

This is information presented by sociologists and other experts who each year compile data and analyze all facets of Costa Rican society, environment, economy and politics in a study called “Estado de la Nación.”

Between 2015 and 2016, the percentage of households in poverty fell 1.2 percentage points, according to income measurements, for a total of 20.5 percent of households in poverty.

However, last year 31.5 percent of Costa Rican households suffered some form of poverty (either monetary, multidimensional or both).

Slight changes from year-to-year have failed to truly solve the exclusion of the bottom one-fifth of Costa Rican society from stable and well-paid employment, educational opportunities, and other means to live a decent life, said the 2017 report.

“An estimate 61 percent of the reduction of poverty … is explained by the transfers of social programs. The effect was greater in rural areas and among those in extreme poverty,” says the report, which was presented yesterday.

The State of the Nation Report 2017 says Costa Rica has failed to address the structural problems underlying poverty, namely those relating to employment and economic productivity, warning that,

“Sooner or later, the serious social problems of the country will negatively affect the availability of resources, as has happened in the past.”

According to the research program’s director, Jorge Vargas Cullel, the key to breaking the cycle of  poverty is by supporting the productive sectors that provide stable and good-paying employment.

Currently, the good paying jobs are in small segments of the economy, whereas the informal sector continues to burgeon with its attendant problems of unstable, low-paying and vulnerable jobs.

“Commerce and non-traditional agriculture are the sectors that have the greatest capacity to generate productive linkages, but at the same time they are the least capable of boosting employment,” explained the report.

Since 2014, the country has seen expanded employment for people with low educational qualifications, especially in traditional industries, agriculture, commerce, and non-specialized services, said the report.

In 2016, the economy grew by 4.3 percent, but its structure remained virtually unchanged, and there has been an overall deterioration in the quality of jobs: with more informality, lower salaries, and greater underemployment.