How Two Years of the Covid-19 Pandemic Reshaped Migration to Costa Rica and Panama
It is no secret that the Covid-19 pandemic that was confirmed by the World Health Organization almost two years ago reduced and reshaped migration flows around the world. The 2022 World Migration Report, published by the United Nations International Organization for Migration, says that “there is no doubt that Covid-19 has reduced migration. The most recent international migrant stock estimate indicates that migration has been sharply disrupted, with migrant stock lower by around 2 million globally compared with (pre-pandemic) long-term trends.”
The same report asserts that this situation has been further complicated because countries have been forced to re-evaluate their migration and border policies for “the new post-pandemic world.” This has led to a wide array of problems from forced immobility to increasing migrant vulnerability for the less privileged. Two years into the pandemic and some of these problems persist, while other migration patterns continue to evolve. For example, at the beginning of the pandemic, there was a perception that there would be mass migration from the United States, but data showed otherwise.
A migration boom in Costa Rica and Panama
The effects of the pandemic on migration patterns have been different everywhere. For instance, in Costa Rica and Panama, neighboring Central American countries, international migrant stock rose significantly during the first year of the pandemic. According to data from the United Nations Department of Economic and Social Affairs, in 2020 the foreign population in Costa Rica jumped 20% to more than half a million, in comparison to 2019. In Panama, it increased around 70% between 2019 and 2020, to more than 310,000 immigrants at the end of the first year of the pandemic.
These growths are not necessarily because of the pandemic, but they coincide with changing migration patterns worldwide. Mario Rodríguez, from the Immigration Team at Outlier Legal Services (which has offices both in Costa Rica and Panama), says that “some of the changes that the pandemic has had have to do mainly with the increase of our clients due to the good management of health in Costa Rica. Because of our affordable health services and their acceptable quality, the number of people who want to come to the country has increased.”
Besides their health services and them being relatively stable democracies, Costa Rica and Panama share attributes that make them attractive for foreign people looking to move overseas, be it because of pandemic-related motives or because of other reasons. The two biggest trends that we have seen so far in that regard are digital nomads and seniors that choose these countries to start a new life.
Digital nomads looking for paradise
One of the biggest migration trends of the last two years has to do with the possibilities opened by the transition to remote work for millions of employees around the world. The term ‘digital nomad’ existed way before the pandemic and referred to people with jobs that could be done remotely, via the internet. Before the pandemic, only 5 out of 100 European employees worked from home, but that share has skyrocketed since Covid-19 changed work everywhere. The consultancy firm MBO Partners estimates that almost 30% of the United States population could be digital nomads by 2025.
The digital nomads phenomenon is still difficult to read outside of the context of the pandemic, but some countries have launched initiatives to take advantage of the trend. Costa Rica and Panama are two of them. These tropical countries are issuing visas for digital nomads that give incentives including tax exemptions, the validity of driving licenses issued overseas, and access to local banking. Nevertheless, keep in mind that while these visas are already available in Panama, in Costa Rica the law that creates them was passed but they are yet to be implemented because of bureaucratic government procedures.
Media sites from all around the world have talked about digital nomads in Panama and Costa Rica. For example, the Spanish newspaper El País interviewed several remote workers last December — many of them actually lived or were planning to live in both countries, one season at a time. “I encourage all entrepreneurs who want to become digital nomads, it’s a wonderful way of life, and to those people who say it’s a passing fad, I would say the same thing was said about social media for example,” said one of them. The US National Public Radio also did a segment on digital nomads in Costa Rica, and both countries are included in best-of lists for work from home, including one from Forbes magazine.
Data cited by the Tony Blair Institute for Global Change shows that more than 60% of active digital nomads are from the US or the UK and have a median income of $80,000 per year. They are mostly university educated and they tend to work in software of web development, startups, marketing, and the creative industries.
The best places to retire
A Google search of “retiring in Costa Rica or Panama” will lead to millions of results of debates about whether it’s better to retire in one country or the other. You may even find articles about North American citizens who chose to retire in Panama during the Covid-19 pandemic, saying things like “it is an act of insanity to stay in the US.” On the other hand, authorities have discouraged travel and moving overseas during the pandemic, and experts on international retiring have said that this is a good time to research for places to live — to think about where to retire abroad when the pandemic ends.
In that sense, Costa Rica and Panama also do very well. For two years in a row, these countries have topped the International Living magazine’s annual list of the best places to retire. In 2021, Costa Rica took the number one spot and Panama came in second place, but this year the tables have turned, with Panama leading and Costa Rica following its steps. Easy permanent residence processes in Panama and the quality and price of the medical services in Costa Rica are just some of the reasons these countries have such good fame among people planning to or retiring overseas.
This ranking was done taking into account the Covid-19-related policies of each country, among other factors that remain important regarding the choice of places to retire abroad. Before the pandemic, around 30,000 US expats were living in Panama, and around 120,000 lived in Costa Rica. No recent data is available for American citizens or for people from other countries living in Costa Rica or Panama since the pandemic started, but it’s not a wild guess to say that the pandemic has definitely changed migration patterns to these Central American magnets for expats.
Costa Rica and Panama have lots to offer expats, and we here at Oulier love helping people achieve their dreams, so if you have any questions about moving here let us know. We’ll help you out as soon as possible.
