Migrant labor plays a key role in Costa Rica's economy, mainly in low-skilled sectors such as agriculture, construction, domestic work, and services. Its contribution to GDP is around 12%, but the duality of the labor market implies many migrants work in informal settings. This paper shows how informality has gained relative importance in the labor market, both for nationals and especially for migrants. Despite their importance in the economy, there are currently no systematic mechanisms that enable estimating future migrant labor demand.

The prospective exercise in this paper shows a slow and steady increase of the total number of migrant laborers active in the Costa Rican economy at the 2030 horizon. This increase in migrant workers is explained by economic growth but maintaining their affluence in the traditional sectors that require their labor and not diversifying into other sectors. In fact, pre-pandemic, their relative importance in the economy was expected to stabilize, if not reduce. That is, a stabilization in the growth of migrant labor demand in Costa Rica was expected, mainly due to the to the consolidation of labor sectors as receivers of this migrant population and the stable trend shown in migratory flows in recent years. However, the uncertainty generated by the Covid-19 crisis makes forecasts challenging, and now migrant labor demand is expected to substantially decrease in the short run, and the recovery to pre-Covid-19 levels is projected to be relatively slow.