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Migration Experience of the Baltic Countries in the Context of Economic Crisis

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Abstract

The Baltic countries, which experienced intensive outflow of labor during the first 5 years after joining the EU, also provide an interesting case for a study of the migration response to economic shocks. The behavior of Baltic migrants was different from that of their counterparts from other NMS. During the economic crisis of 2009–2010 and its aftermath, mobile citizens of other countries which joined EU in 2004 responded primarily to the worsening economic situation in old member state host countries: emigration slowed down, while return migration intensified.

The authors thank the anonymous referees as well as the editors of this volume for providing a number of suggestions that helped to improve the chapter significantly. We remain responsible for any mistakes still present.

Financial support from European Social Fund Research Project: 2013/0055/1DP/1.1.1.2.0/13/APIA/VIAA/040 “The emigrant communities of Latvia: National identity, transnational relations, and diaspora politics” (Institute of Philosophy and Sociology, University of Latvia in cooperation with Faculty of Economics and Management, University of Latvia) is gratefully acknowledged. The chapter greatly benefited from guidance and useful comments by the editors, as well as from fruitful discussions with the authors of the other chapters in this volume during IZA/CEUR Workshops in Budapest (2011–2012), and colleagues in other meetings. The usual disclaimer applies.

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Notes

  1. 1.

    Kahanec and Zimmermann (2010) review evidence on the early post-enlargement mobility in a broader EU context. Kahanec (2012) extends analysis to cover also the 2007 enlargement and the beginning of the economic crisis. Kahanec et al (2016) provide econometric analysis of migration flows in EU15 + EFTA + EU12 over the period of 1995–2010.

  2. 2.

    This was the case both in fixed prices (as shown in Fig. 1) and in PPS (not shown).

  3. 3.

    In the case of Estonia, however, the situation might be affected by the fact the main destination country, Finland, is geographically and linguistically very close, which makes psychic cost of staying abroad lower and pressure to return smaller.

  4. 4.

    NINO statistics reflects only immigrants aged 16 and more; it has been adjusted upwards assuming, for each year and sending country, the same proportion of children among immigrants to the UK as among immigrants to other EU/EFTA countries.

  5. 5.

    These results are based on data covering outflows to the UK, Germany, the Nordic countries, Ireland, Austria, and the Netherlands, which accounted for more than 90 % of the total emigration from each of the Baltic countries to the EU and OECD destinations in 2012.

  6. 6.

    The official Lithuanian figure for 2010 is an exception: many of the previous years’ emigrants signed out from the population register in 2010 to avoid compulsory health insurance payments; see OECD (2012: p. 248).

  7. 7.

    Hazans (2003, Tables A4.1–A4.4) provides a detailed comparison of earnings.

  8. 8.

    These results, based on Eurobarometer 64.1 data, refer to the population aged 18–65 years; see Hazans (2012: Table 3) for Estonia and Latvia.

  9. 9.

    Brucker et al. (2009, Tables 6.7–6.8), in the case of UK in 2004–2007, report returns of just 2 % per year of schooling and find that 82 % of tertiary-educated immigrants from the NMS were over-qualified for their jobs. In the same period, 40–60 % of tertiary-educated Estonian and Latvian mobile workers and more than 60 % of their Lithuanian counterparts were over-qualified according to Hazans and Philips (2010, Fig. 7).

  10. 10.

    See Figs. 1 and 6 above; on wage cuts, see Hazans (2013c: Figure 4.7); Masso and Krillo (2011, Table 14).

  11. 11.

    During the crisis years in Latvia, for workers with less than 20 years of contribution, this was the case already after 6 months of registered unmeployment.

  12. 12.

    Hazans (2012, Fig. 6.3; 2013c: Table 4.5) provides evidence for Estonia and Latvia.

  13. 13.

    Kaczmarczyk et al. (2010) use SI = GM/GS − 1 with similar properties; the advantage of my measure is in having symmetric (opposite) values for GM/GS = k and GM/GS = 1/k.

  14. 14.

    For Estonia, this finding is supported also by results in Anniste et al. (2012), who used data on registered emigration.

  15. 15.

    The Estonian case is not perfectly comparable to the other two because some of the Estonians working in Finland commute to/from Estonia (mostly on weekly basis but in some cases more often); yet a substantial part of these commuters are registered as residents of Finland. This makes exact identification of Estonian emigrants in Finland difficult. Commuters are, on average, less educated than settled emigrants.

  16. 16.

    The UK Population Census data are likely to overestimate the share of tertiary-educated immigrants and under-estimate the share of low-educated. First, the low-educated immigrants are more likely to avoid participation due to language problems. Second, due to complicated design of the question on educational attainment and specific terminology used in it, many of the immigrants (especially the low-educated) choose only the answer “Foreign qualification.” The imputation algorithm used by ONS when producing publicly-available tables on educational attainment by country of birth is not sending-country-specific and classifies 69 % of these immigrants as highly-educated. I assume that the bias is not big enough to change the conclusions from Fig. 8 (lower panel) qualitatively. This assumption is supported from data from online survey of Latvian emigrants conducted in 2014 (see footnote 18 below), with the non-weighted share of tertiary-educated among 3091 post-2000 emigrants living in the UK being 40 %. However, this issue calls for further investigation.

  17. 17.

    Note that due to data limitations pre- and post-accession are proxied by 2001–2005 and 2006–2009 in Figs. 8 (lower panel) and 9.

  18. 18.

    See Hazans (2015a, 2015c), Mierina (2015). The survey has been designed and conducted in the framework of interdisciplinary research project “The emigrant communities of Latvia: National identity, transnational relations, and diaspora politics” implemented by Institute of Philosophy and Sociology, University of Latvia in cooperation with Faculty of Economics and Management, University of Latvia and supported by European Social Fund Project 2013/0055/1DP/1.1.1.2.0/13/APIA/VIAA/040.

    Comparison of the respondents’ distribution by host country, age, gender, and period of leaving with data from other sources does not show any significant selection bias. Moreover, the distribution of repondents from the UK and Ireland by educational attainment is largely consistent with the data from the year 2011 Population Censuses in these countries.

  19. 19.

    Except for the most recent emigrants, the stock SI are smaller that the flow ones because during the period between arriving to the host country and 2014, the share of university graduates among emigrants was growing slower than among young stayers.

  20. 20.

    Anniste et al. (2012: Table 1), using data on registered emigrants from Estonia, find that the proportion of minorities among emigrants declined from 48 % in 2000–2003 to 28 % in the post-accession period (2004–2008). This also support our expectations on the pattern of ethnic selectivity.

  21. 21.

    See Kahanec and Fabo (2013) for a recent analysis of gender and family on emigration intentions in the EU.

  22. 22.

    Ministry of Education and Science, unpublished data.

  23. 23.

    Due to data limitations, Germany, Austria, and Switzerland are excluded.

  24. 24.

    See footnote 18, Hazans (2015a), Mierina (2015) for details.

  25. 25.

    Note that median, across all years, tenure of Latvian mobile workers in the LFS data is less than 1 year.

  26. 26.

    Masso et al. (2014) provide evidence for substantial downskilling among Estonians working abroad.

  27. 27.

    Note that in the post-accession period, the total inflow or returnees during the moving 10-year window was growing over time.

  28. 28.

    By contrast, Masso et al. (2014) do not find an earnings premium for return migrants in Estonia.

  29. 29.

    World Bank online database, assessed on June 30, 2015.

  30. 30.

    In 2014, only 35 % of Latvian emigrants sent home remittances on a regular basis according to the survey described in footnote 18, Hazans (2015a, 2015c) and Mierina (2015).

  31. 31.

    The effect of emigration on total labor force participation is theoretically ambiguous. Changes in the age structure caused by emigration suggest a negative effect, while higher real wages and lower hiring standards tend to increase the participation rate, especially among disadvantaged groups (Hazans and Philips 2010; Hazans 2011a). In fact, the activity rate of the Latvian working age population was much higher in 2011–2012 than in the pre-accession period, but it could have been even higher in absence of emigration.

  32. 32.

    For details, see http://www.ieguldilatvija.lv/

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Hazans, M. (2016). Migration Experience of the Baltic Countries in the Context of Economic Crisis. In: Kahanec, M., Zimmermann, K.F. (eds) Labor Migration, EU Enlargement, and the Great Recession. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-45320-9_13

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