Costa earned her Bachelors of Arts degree in economics and mathematics from the University of California, Berkeley in 1986.
She is currently a researcher on their programs on the Development of the American Economy and on Aging and the director of the NBER working group Cohort Studies since 2000 as well.
Costa has also worked for the California Center for Population Research, holding the position of associate director from 2007 to 2017.
Her research has covered several topics including but not limited to retirement, elderly living, older age mortality and morbidity, trends in population health and leisure, CPI bias, and social capital.
Costa has been awarded the Alfred P. Sloan Research Fellowship and was a fellow at both the Center for Advanced Study in the Behavioral and Social Sciences and NBER.
Her paper, "The Evolution of Retirement: An American Economic History 1880-1990" received the TIAA-CREF's 1998 Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security.