Abstract
This chapter analyzes the direct and indirect income effects of international labor migration and remittances in selected CIS countries. The analysis is based on CGE models for Moldova, Ukraine, Georgia and Kyrgyzstan. We find that these countries would experience a sharp contraction of private consumption and substantial decline in GDP in the absence of remittances. Because of the important contribution of migration and remittances to stabilizing and sustaining incomes, enhanced opportunities for legal labor migration should figure prominently in any deepening of bilateral relations between CIS countries and the EU under the ENP.
Acknowledgements
This chapter summarizes the findings of ENEPO Work Package 8: Analysis of Outward Migration in Selected CIS Countries. The country case studies on which this chapter is based are described in detail in Atamanov et al. (2009). They were authored by Matthias Luecke and Toman Omar Mahmoud (Moldova); Vitaliy Vavryschuk (Ukraine); Kseniya Tereshchenko and Ainura Uzagalieva (Georgia); and Aziz Atamanov and Roman Mogilevsky (Kyrgyzstan).
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Notes
- 1.
Data from the World Development Indicators database (which we use in Figs. 7.1–7.3 for the sake of consistency over time) are only available through 2008. More recent information on output developments in the selected CIS countries is provided, inter alia, by the IMF Regional Economic Outlook for Europe, and IMF Regional Economic Outlook for Middle East and Central Asia: http://www.imf.org/external/pubs/ft/reo/reorepts.aspx
- 2.
This section draws extensively on Fagernas (2004).
- 3.
We also explored the feasibility of using a recursive-dynamic CGE model to complement our comparative-static simulations. A more explicitly dynamic structure would reflect the investment process more accurately and thereby provide additional insights into the growth effects of remittances. However, the additional assumptions required to implement a recursive-dynamic model turned out to be far-reaching. Overall, we would have introduced a high level of arbitrariness into the analysis such that the more detailed description of the investment process in the recursive-dynamic model would ultimately have been meaningless.
- 4.
For an overview over the main CGE modeling approaches with references to appropriate literature, see Robinson (2003).
- 5.
The original case study on which this section is based was authored by Matthias Luecke and Toman Omar Mahmoud (see Atamanov et al. 2009).
- 6.
The original case study on which this section is based was authored by Vitaliy Vavryschuk (see Atamanov et al. 2009).
- 7.
The original case study on which this section is based was authored by Kseniya Tereshchenko and Ainura Uzagalieva (see Atamanov et al 2009).
- 8.
The original case study on which this section is based (see Atamanov et al. 2009) was authored by Aziz Atamanov and Roman Mogilevsky.
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Luecke, M. (2012). Income and Distribution Effects of Migration and Remittances. In: Dabrowski, M., Maliszewska, M. (eds) EU Eastern Neighborhood. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-21093-8_7
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