Labour Mobility: Challenge or Chance Labour Mobility: Challenge or Chance? EVIDENCE FROM THE BALTICS AND POLAND IN THE 21ST CENTURY Mihails HAZANS, University of Latvia and IZA (Bonn) mihails.hazans@lu.lv Baltic Sea Labour Forum ROUND TABLE Berlin, June 15, 2017

Post-2000 emigration waves (1) 2000-2003: Personal characteristics. PL & EE vs. LV & LT. High human capital threshold, especially in LV and LT. Large emigration potential but actual emigration limited (net outflow 0.5% from PL, 1% to 2% from Baltics) & geo-diversed. 2004-2008: Institutional and market factors. Free-movement within EU (implemented gradually). Lower migration costs, lower human capital threshold. Pull factors more important than push. Post-accession emigrants are less educated Net outflows: EE ≈ 2%, LV and PL ≈ 3%, LT ≈ 5%.

Post-2000 emigration waves (2) 2009-2010: Crisis-driven emigration. Lost jobs, lost perspectives, "new movers“ and shift towards permanent emigration /less so in PL/ Outflows from the Baltics doubled or almost doubled compared to the pre-crisis levels in 2009 (LV), 2010 (LT) and 2012 (EE) Outflows from PL slowed down (yet during the two crisis years the stock of Polish emigrants in EU/EFTA countries increased by 10%) Economic and non-economic push factors, better social security abroad, as well as family-related factors gain importance The shares of both low-skilled and tertiary-educated among emigrants might increase. 2011-2015: Outflows are shaped by networks, along with already formed but not yet implemented emigration intentions. Emigration has become “the new normal”, and the Baltic/Polish diasporas will keep growing in the years to come PL/EE vs. LV/LT : different trends Overall in 2009-2015 net outflows: LV >8%, LT > 7%, EE >3%, PL > 2%

CHALLENGE: Natural decrease of population and net emigration of nationals. The Baltic countries and Poland, 2000-2015

CHALLENGE: Change in size of selected cohorts (in % of population on 01.01.2004). Latvia and Lithuania, 2004-2013 NB: Polish results are not reflected in official demographic statistics

CHALLENGE: The countries which host most of the Baltic emigrants have better demographic prospects than the Baltic countries “Natural" aging caused by declining birth rates is much more pronounced in the Eastern EU member states: here, the recent rates are 30 to 40 % lower than those observed in 1970s-1980s, while in most comparison countries this gap ranges between 5 and 20 % (Germany – 25%) In terms of either recent birth rates or post-enlargement rates of natural change of population, Latvia and Lithuania are among the three "demographically worst cases" in the Eastern part of EU, while Estonia and Poland perform significantly better. The Baltic countries and Poland feature substantially lower birth rates and rates of natural change than the UK, Ireland and Norway In terms of the rate of natural change Latvia and Lithuania perform worse than Germany, and Estonia performs worse than Finland

Brain drain CHALLENGE: Skill composition and selectivity of Baltic emigrants

Shares, flow selectivity and stock selectivity of tertiary educated emigrants from Latvia, 2000-2014, by destination and arrival period (Emigrant survey data)

Tertiary-educated emigrants from Latvia and stayers by field of study, 2014

Emigration intentions in Latvia, 2013-2016 (population aged 18-64) Emigration intentions in Latvia, 2013-2016 (population aged 18-64). How big is the probability that in the near future you might move to work abroad ?

CHANCE: Return migration and immigration of foreigners, NMS, 2011 - 2015 (% of population in the beginning of 2011)

CHANCE: Evidence from survey of return migrants, Latvia, 2016 Share of self-employed and entrepreneurs almost two times higher among returnees Remigrants earnings on average by 45% higher One-third of emigrants see themselves as difficult-to-replace employees (among those with higher education received abroad: 43%) Of those difficult-to-replace, 75% say that skills which make them “unreplacable” have been completely of to some extent developed abroad Among difficult-to-replace workers with higher education received abroad, 95% say: foreign education and experience helped them to become “unreplacable” Just 15% of returnees had no adaptation difficulties in Latvia Access to relevant information for returnees is one of the bottlenecks In this context, Lithuania provides examples of good practices: -virtual one-stop agency for returnees (Migration Information Centre) - virtual platform connecting emigrants with their municipalities of origin

Brain drain challenge (LV, LT, PL; RU) Conclusions Demographic challenge for sending countries such as LV and LT; to a lesser extent PL and EE Brain drain challenge (LV, LT, PL; RU) Chance for emigrants (survey evidence reveals high satisfaction) But also some chance for sending countries due to brain circulation

THANK YOU!