Costa Rica’s Brain Drain: A Hidden Threat to National Progress

Although Costa Rica is home to just around five million people, its citizens are remarkably global. From Europe to North America, Costa Ricans can be found not just traveling, but living and working abroad—often with university degrees in hand. For many, higher education has opened the door to new opportunities in more prosperous countries. But this freedom comes at a price: as talent leaves, the very development Costa Rica invested in is diverted elsewhere. What begins as personal mobility may become a national challenge. This newly obtained freedom of movement can, over time, hinder the future development of this country.

The Role of Education in Costa Rica’s Economic Development

After the end of the civil war in 1948, Costa Rica has taken a unique development path compared to its regional neighbors. The so-called Ochomogo Economic Miracle (1949–1980) was marked by deep social and economic reforms. The abolition of the military helped to enable the redistribution of public funds toward public and social services like education and healthcare. Those state services steadily improved, and during this period, life expectancy skyrocketed—from just 47 to 73 years. Since the 1980s, Costa Rica has continued to diversify its economy. A milestone in this transition was the arrival of Intel in the 1990s. Within a year, the export of microprocessors had overtaken traditional export goods like bananas and coffee. Tourism has been another pillar of economic growth. Since 1999, the revenue generated from tourism exceeds the ones from banana, pineapple, and coffee combined. Last year, it contributed 8.2% to GDP and employed 8.8% of the workforce. What sets Costa Rica apart, however, is that it managed to achieve this economic transformation while remaining committed to environmental sustainability. Through initiatives like the "Pago por Servicios Ambientales" (PSA), the country increased forest coverage from just 21% in 1987 to over 60% by 2020—all while growing its GDP from $4.5 billion to over $80 billion. Yet perhaps the most strategic long-term investment has been in education. Public education spending has been standing at 6-7% of GDP for the last 15 years—the highest in Latin America and well above the global average of 4.48%. This commitment laid the groundwork for a remarkable expansion of higher education: from just a handful of universities in the 1980s to today’s network of five public and 54 private institutions. Within the age group of 18-23-year-olds (including students outside the official age group), enrollment in higher education soared from 8.6% of the population in 1970 to over 50% nowadays, and the number of accredited university programs nearly tripled within the last 10 years. Costa Rica has come a long way from an agrarian economy toward a modern economy driven increasingly by knowledge, education, and technological integration. From a once-categorized developing country to an emerging market economy. From barely having any universities to offering its youth the opportunity for high-profile education. But turning that investment into long-term national wealth depends on one critical factor: whether the country’s highly educated youth chooses to build their future at home. This is where the dilemma unfolds.

Why Talent leaves

Brazil has been the first country to lose the label of a developed economy again and has now regressed to a developing economy. Like many other emerging market economies, Costa Rica's economic and social development has lost momentum in recent years as well. There are several reasons for this. But one major factor seems to be the phenomenon of young, highly educated professionals, fresh out of university, leaving Costa Rica to base their career abroad. While there is no concrete data on this so-called “brain drain”, statistics show that 56% of Costa Rican emigrants name better job opportunities as their primary reason to leave the country. Costa Rica is far from alone in facing this challenge. The pattern is well-documented across the Global South: a country reaches the point where it can offer higher education to its population—but just as these educated individuals become economically productive, they emigrate. These people are likely to become very productive to the economy, pay the highest taxes, generate the most value, and are also most likely to push innovation that would make the country wealthier—yet they take their potential elsewhere and move to one of the around 30 so-called fully developed countries. The reasons are quite simple. In many countries, people leave to escape violence, persecution, or systemic corruption. In other countries, including Costa Rica’s case, the motivations tend to be more pragmatic: higher salaries, better job prospects, and improved quality of life. Developed economies offer what emerging markets still struggle to provide—competitive wages, political stability, reliable healthcare, low crime, clean environments, and functioning institutions. Given the choice, it is hard to blame anyone for leaving. Still, the economic implications can be intense. Developing countries invest in their youth through education, but when it is time for graduates to return that investment—by building careers and contributing to domestic prosperity—they instead generate wealth for other nations. They base their career in already wealthy countries, and boost their economy even further by buying goods to settle down and through lifelong taxation. The emigrating students end up costing the governments more than they return. For countries like Costa Rica, this represents a net loss: a financial and intellectual deficit. The students themselves are not to blame. Their decisions are rational, even necessary. But the effects of this structural dilemma are deeply felt—and if left unaddressed, they will only intensify.

The Consequences

On a global scale, countries with huge economic potential are struggling to fulfill it. Demographically, most developing countries are perfectly set up for economic development. They are, unlike a lot of the developed states, not lacking the young workforce that is going to financially support an aging population. Instead of being able to make full use of this demographic advantage, young skilled workers are going to wealthy countries and end up helping them combat their demographic decline and labour shortage. Why does this matter so much? The developed economies end up receiving a young, qualified worker without having invested in their education. The worker spends his life paying taxes in the already wealthy country. Those economies receive some of the most skilled professionals to drive innovation and make industries more progressive. This way, they increase the country's competitiveness against alternatives from developing countries. On the flip side, this means less economic competitiveness for poorer countries. It makes it harder for not fully industrialized countries seeking to close the economic gap with wealthier countries. And eventually, to reduce global inequalities. So what specifically does this mean for Costa Rica? Although comprehensive data on Costa Rica’s brain drain is scarce, the signs are concerning. The World Bank stated that between 1990-2000 about 9% of Costa Rica's higher-educated population moved abroad each year. This was lower than the Central American average of 13%. However, the number most likely heavily increased from 9% due to factors such as economic globalization and a higher interest of local students to pursue postgraduate degrees abroad. Another study found that only 23% of Costa Rican scientists who leave the country eventually return. In addition to the challenges Costa Rica shares with other countries affected by brain drain, it also faces several issues unique to its own context. No other Latin American country invests as much in education as Costa Rica does, with 6-7% of GDP each year. However, businesses have still been claiming to struggle to find qualified workers, especially in the fields of IT, engineering, and medicine. So there seems to be a mismatch between the level of education and the available jobs. This also results in roughly 41% of university graduates working in jobs below their level of education. Those graduates will often be unsatisfied and therefore less productive in their jobs. This will motivate a few of them to leave Costa Rica. But even when these professionals stay, the country often fails to harness their full potential. What ends up arising is a hidden capital outflow in the form of know-how and training costs out of Costa Rica. Unlike countries such as Mexico or Argentina, Costa Rica has yet to implement structured return programs. Few incentives exist for those who leave to ever come back. This brings us to the key question: how can this cycle be broken?

What are other countries doing against it?

Brain drain is not an irreversible fate. Countries around the world are demonstrating that talent can be retained or recaptured through clever return strategies, engaging the diaspora,and building attractive local economies. Argentina, for instance, was able to return hundreds of scientists through the so-called Raíces-Program, where they are promoting the return of researchers through grants, research centers, and government networks. China has been promoting student exchange programs, which can lead to foreign-educated workers deciding to settle in the host country. The Philippines significantly lowered the bureaucratic burden of coming back to the home country by also introducing dual citizenship. The probably most effective examples have been put forward by countries like Taiwan and South Korea. Those countries have heavily invested in a certain sector of industry and the start-up landscape, aiming to become the world leader in one of those areas. For Taiwan, this has been the semiconductor industry. This way, they have been able to strengthen domestic innovations. The effect is that qualified workers stay and some foreign ones even come because of attractive jobs and start-up opportunities in this leading sector.

What can be done in Costa Rica?

So which lessons can be drawn from these international examples? For Costa Rica, which is already training a highly qualified young generation, the next step is to make their opportunities visible and exploitable at home. Government programs with targeted scholarships, professorships, or tax breaks for returnees could be put in place. Exchange programs to visit Costa Rican universities could be emphasized more. A return strategy is an important part of combating the brain drain. But even more important is to break the cycle of people fresh out of university wanting to base their professional career somewhere else in the first place. Two key drivers behind this trend appear to be: 1. Expectations on a certain quality of life for qualified workers. 2. Discrepancy between degrees and labour market requirements. Therefore, the key factor is to improve living conditions. Reducing social inequality, improving infrastructure, offering affordable housing, and most importantly: offering a career perspective for young people in Costa Rica must be top priorities. Doing so will be expensive. To tackle these heavy challenges, the main objective has to be to make businesses want to settle in Costa Rica and create high-profile jobs, ideally outside of San Jose to reduce regional disparities and create opportunities beyond the capital. This can be done through a combination of competitive tax incentives, reliable legal and regulatory frameworks, investment in regional transportation and digital infrastructure, and stronger links between universities and the private sector to align education with labor market needs. Costa Rica must position itself not only as a beautiful place to visit but as a smart place to build. Yet development must be carefully managed to avoid environmental degradation, particularly in rainforest regions vital to Costa Rica’s biodiversity and climate leadership. Importantly, Costa Rica should not continue to rely primarily on tourism as a long-term source of national wealth. Instead, investing in industries that are projected to grow globally—like clean energy, climate resilience technologies, precision agriculture, and advanced digital services—can generate more stable, future-proof economic development. This could also realign the desired degrees of students with domestic job opportunities. If done strategically, Costa Rica can become not just a hub of biodiversity but of innovation and opportunity. Costa Rica ranks lowest in Central America on the Brain Drain Index, scoring just 2.9 out of 10. In contrast, every other country in the region, except Panama, scores above 5, with El Salvador topping the list at 8.7. However, it is essential to address this trend early before it becomes more deeply entrenched. If no action is taken to address the growing mismatch between the labor market and the emerging generation of workers, more young people may find themselves pushed into underemployment or the informal sector. Conditions that can increase social instability over time. This would represent a serious setback for Costa Rica’s development. As outlined, brain drain is not an irreversible trend. It can be managed—and even reversed—but doing so requires political awareness, strategic vision, and the will to act. The window of opportunity is open. The question is whether Costa Rica is ready to step through it.