The Nicaragua Jobs Diagnostic appliesthe Bank's standard Jobs Diagnostics tool to exploretrends and macro drivers of economic and jobstransformation, labor market outcomes from the supply side,and sources of job creation from the perspective of thedemand or private sector sides. The report shows that thedistributions of jobs and production (value added) do notshow significant changes over the last 15 years. Thisfinding is directly linked to the slow urbanization and thepredominance of subsistence agriculture in rural areas, thusreinforcing and urging the need to shift the Nicaraguaneconomy towards higher productivity, employment creation,and formalization to support future growth in jobs. Therecommendations address structural and short-term challengesfocusing on labor and jobs growth. This report will servethe country and sector teams as an entry point to explorefuture areas of interest, as it is designed to serve as abaseline to understand the economic transformation trendsuntil 2018; particularly in the event of the shock thatshrank the economy by more than 3 percent