PERMANENT OR CIRCULAR MIGRATION?

Transcription

1 PERMANENT OR CIRCULAR MIGRATION? Policy Choices to Address Demographic Decline and Labour Shortages in Europe Editors Elmar Hönekopp Heikki Mattila Assistant Editor Alin Chindea English Language Editor Mark Griffith April 2008

2 The authors prepared this report as independent consultants to the International Organization for Migration. Opinions expressed in this document are those of the authors and do not necessarily refl ect the views of IOM. IOM is committed to the principle that humane and orderly migration benefi ts migrants and society. As an intergovernmental body, IOM acts with its partners in the international community to: assist in meeting the operational challenges of migration: advance understanding of migration issues; encourage social and economic development through migration; and uphold the human dignity and well-being of migrants. Publisher: International Organization for Migration (IOM) Regional Mission for Central and South Eastern Europe 1065 Budapest, Révay utca 12, HUNGARY Tel: ; Fax: mrfbudapest@iom.int; Web site: Graphic Design and Printing: Strém Kiadóház Ltd 2008 International Organization for Migration (IOM) ISBN All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission from the publisher.

3 T ABLE OF CONTENTS List of Contributors 5 Introduction 7 Population and labour force forecasts for selected European countries: assumptions and results Background and assumptions of population and labour force forecast The futures of population and labour force in selected European countries Critical assessment of results and conclusions 30 The Czech Republic Population developments Labour market developments Migration and employment of migrants Free movement of labour within the EU Real and potential brain drain the Czech labour market Political discussions of migration and the labour market Main stakeholders in economic migration and its management International aid Recruitment programmes as examples of active policy Conclusions Recommendations 66 Hungary Historical background Demographic developments Labour market developments Migration and the employment of migrants Formulating migration policies Conclusions 104 Italy The economic and social system at a glance The dynamics of immigration Migrants insertion into the labour market Population, labour force trends and immigration Migration policy 137 3

4 Poland Labour market developments Migration and employment of migrants Formulating migration policies: changes in the making 166 Portugal Demography: Recent Trajectory and Projected Developments The Labour Market: Linking Population and Output Migration Flows to and from Portugal: Economic and Labour Market Impacts Policy Options Formulating migration policies 204 Romania Demographic developments Labour market developments Migration and employment of migrants Implications of the recent developments Formulating migration policies Cooperative policy to manage eastern borders 250 Slovak Republic Demographic and labour force developments Concise characterization of recent developments in the Slovak economy Immigration and labour market nexus Emigration and labour market nexus Weak points of labour migration practices in Slovakia and developments in the country s migration policy Proposals, recommendations and policy options 289 Ukraine Demographic situation Labour market developments Migration and employment of migrants Formulating migration policies What do the trends and projections imply? 332 4

5 L IST OF CONTRIBUTORS Alexandre Abreu is a Ph.D. Candidate at the Department of Economics, School of Oriental and African Studies in the University of London and a researcher at the Centre for Geographical Studies within the University of Lisbon. alexabreu@fl.ul.pt Monica Alexandru has researched and written extensively on migration and traffi cking in Romania and is currently a PhD candidate in Sociology at the University of Bucharest. alexandru_monica@yahoo.com Jakub Bijak is a Senior Researcher at the Central European Forum for Migration and Population Research, International Organization for Migration, specializing in the application of quantitative methods in demography. j.bijak@cefmr.pan.pl Boris Divinský holds a M.Sc. in Human and Regional Geography from the Comenius University in Bratislava and co-chairs the Working Group for Justice and Home Affairs within the National Convent on the EU (consultative body for the Slovak Government and Parliament). He is currently a freelancer. altiplano@centrum.sk Dušan Drbohlav is Associate Professor in the Faculty of Science, Department of Social Geography and Regional Development at Charles University in Prague. drbohlav@natur.cuni.cz Ágnes Hárs is Senior Research Fellow at the Kopint-Tarki Economic Research Institute in Budapest and she holds a Ph.D. in Economics from the Hungarian Academy of Sciences. h8129har@ella.hu Elmar Hönekopp was a senior researcher at the Institute for Employment Research (IAB) in Nuremberg where he was responsible for the research department for International Comparisons and European Integration and led the research fi eld Migration and Integration. He retired at the beginning of ce.hoenekopp@t-online.de Eva Janská is Associate Professor in the Faculty of Science, Department of Social Geography and Regional Development at Charles University in Prague. ejanska@centrum.cz Pawel Kaczmarczyk, PhD, is an assistant professor at the Chair for Demography, Faculty of Economic Sciences (University of Warsaw) and researcher at the Centre of Migration Research (University of Warsaw). p.kaczmarczyk@uw.edu.pl Anna Kicinger holds a MA in International Relations and is a Researcher at the Central European Forum for Migration and Population Research, International Organization for Migration, specializing in migration policy issues. kicinger@cefmr.pan.pl 5

6 Weronika Kloc-Nowak holds a MA in Sociology from the University of Warsaw. Since 2005 as a member of the Central European Forum for Migration and Population Research where she is focusing on studies of immigrant integration and international labour migration to and from Poland. w.nowak@cefmr.pan.pl. Marek Kupiszewski is a Founding Director of the IOM s Central European Forum for Migration and Population Research. He holds MSc in Mathematics and PhD and Habilitation in population geography. m.kupisz@twarda.pan.pl Sebastian Lăzăroiu is Associate Professor at the Faculty of Communication and Public Relations within the National School of Political Studies and Public Administration, and an Associate Professor at the Faculty of Sociology within the University of Bucharest. Since 2007, he has worked as an adviser to the President of Romania. slazaroiu@curs.ro Ella Libanova is Deputy Director at the Institute for Demography and Social Studies, NANU, in Kiev. She is also affi liated to the National Academy of Sciences of Ukraine, the International Union for the Scientifi c Study of Population; she is a member of the State Commission on Economic and Social Development and of the National Council on Statistics under the President of Ukraine. libanova@adm.gov.ua Olena A. Malynovska is Head of Department in the National Institute for International Security Problems, Kiev. She holds a Ph.D. in Public Administration and another in History and has occupied top positions within different state authorities dealing with migration issues. olena@history.kiev.ua Heikki Mattila is Regional Programme Offi cer within the International Organization for Migration, Mission with Regional Functions for Central and South-Eastern Europe. hmattila@iom.int Joanna Napierala is a PhD student at the Institute for Social Sciences (University of Warsaw) and Research Assistant at Centre of Migration Research, Faculty of Economic Sciences (University of Warsaw). j.m.napierala@uw.edu.pl João Peixoto is Associate Professor at the Department of Social Sciences and an active researcher since 1992 at the Centre for Research on Economic Sociology and the Sociology of Organizations, both organizations affi liated with the School of Economics and Management, at the Technical University of Lisbon. He is also a consultant at the Portuguese National Statistical Institute. jpeixoto@iseg.utl.pt Emilio Reyneri is Professor of Sociology of work at the Department of Sociology and Social Research of the University of Milan Bicocca. He is also a member of the network of excellence EQUALSOC (Economic changes, Quality of life and Social cohesion). emilio.reyneri@unimib.it Endre Sík is a professor at the Eötvös Loránd University, Department of Minority Studies, Budapest and senior researcher at TÁRKI, a Social Research Institute based in Budapest. He is also member of the network of excellence of European migration researchers (IMISCOE). sik@tarki.hu 6

7 I NTRODUCTION Heikki Mattila Recent migration news and developments in Europe have shown that labour migration touches on the economic, demographic and security interests of all European countries and is today one of the most keenly debated political issues. Diffi cult, if not impossible to manage to everybody s satisfaction, migration in general provides easy ammunition for attacks on governments by opposition parties. However neither governments nor opposition parties have yet been able to come up with magical measures to solve such persistent problems as the irregular markets of migrant labour force, or the brain drain suffered by sending countries. In any case, although research and experts (most recently the Attali Report in France in January 2008) repeatedly recommend more targeted proactive immigration measures to ease demographic and labour shortages, activ promoting of these goals is politically very diffi cult. The relevance of this EC/ARGO funded, policy-oriented research project European cooperation in labour migration: search for best practices was clear already at the design stage in late Moreover, the timeliness of the theme has since been further confirmed by labour migration developments and policy moves of European countries and the European Commission. One key goal of this project was to study and clarify the interests of the Central European new EU Member States. There were already in 2005 signs of labour shortages in the region, especially in Poland. As the largest of the new Members, Poland was topping the list of countries sending workers to the UK and Ireland. These were two of the three countries (along with Sweden) that did not introduce a transition period for citizens of new EU Members that joined in May The westbound exodus has made the region s countries, such as the Czech Republic, Slovakia, and Romania, lose labour force that is now increasingly in demand at home, following recent positive economic developments. The common European problems, the ageing of populations and the proportional (and often also absolute) decline of the labour force, which the UN Population Division in 2000 dramatically broke into the migration debate with its Replacement Migration Report, also motivated us to propose a thorough review of migration policies in selected European countries. In addition to countries from Central and Eastern Europe, selected Western European countries (Italy, the UK and Portugal) were recruited to this project in order to cover all parts of the EU, and to open dialogue between countries of destination and origin. Important from the viewpoint of the Central European countries, was to get useful lessons from states that had fairly recently passed from being large-scale sending countries to being migrant-receiving countries (Portugal and Italy).The special immigration schemes for the skilled and unskilled in the UK and experiences in dealing with sizeable shadow 7

8 Introduction economies with strong immigrant involvement in countries such as Italy and Portugal were seen as relevant for the Central European countries. In 2005 both Romania and Ukraine were third countries. Romania joined the EU in January 2007 and is in the situation where more than two million of its citizens have in very recent years emigrated to work abroad, while the need for labour force is ever more strongly felt at home. Ukraine has been widely seen as a labour reserve for Central and Western Europe now and in the future. It is indeed an important country of origin for immigrant workers of countries such as Poland, Hungary and Portugal, but its declining population and dire demographic prospects make emigration of its labour force look less desirable and potentially harmful for its own development. Therefore it was thought important to give space to Ukrainian researchers to analyze and highlight the labour migration interests of their country. Overall, the project wanted to give policy planners of participating countries a stronger knowledge base to articulate their interests among the EU countries, and thereby reach more coordinated and balanced outcomes between the sending and receiving countries. With so many ambitious objectives, the work agenda of the research became quite heavy. To support their migration policy recommendations, our researchers were asked to analyze thoroughly the demographic, economic and labour market foundations for migration policies in each of the nine participating countries. After such fundamental assessments, recent migration trends, policies and current debates were also studied and critically analyzed. Furthermore, as we were looking for best practices, researchers looked for any interesting practices, labour immigration schemes, permanent or temporary, that could serve as models to be applied elsewhere. Hence the second half of the project name:... search for best practices. To facilitate the task of the country researchers and allow for comparability, the Warsawbased and IOM-linked Central European Forum for Migration and Population Research (CEFMR) updated demographic and labour force projections for all participating nine countries. The demographic analysis confi rmed, among other things, the already familiar conclusion that migration of any reasonable magnitude can only partially remedy ageing and shrinking of the populations under study. Policy measures to manage migration therefore need to be part of a much larger policy design. Such a comprehensive policy should address, according to our researchers, a host of inter-related issues including the future funding of pensions, policies on education, family and housing, alongside continued efforts to mobilize domestic labour force reserves. As to immigration policy, a common conclusion was that well managed recruitment schemes for immigrant workers of various skill levels should be introduced by all European Governments, in order to prepare for the steep decline of domestic labour forces when the post-war baby boom generation starts to leave the labour markets at an accelerating pace from This is in spite of the known limitations of demographic 8

9 Introduction or labour market effects. The existing Czech programme to recruit skilled third country nationals was presented as an interesting and pioneering example for Central European countries, and for others too. It was also stressed that such programmes, which recruit highly skilled key professionals, have the potential to create new employment in the country of immigration. One of the most important recommendations of this project is that appropriately scaled and managed immigration schemes alongside active efforts to mobilize domestic labour reserves, are not contradictory policies, as often claimed in political debate. They do not exclude each other. On the contrary, in countries like Slovakia or Hungary with very steep demographic declines, such market-driven immigration schemes (along the Czech model) are to be recommended. These models should be one available policy instrument, along with active labour market policies to transform people s skills, rehabilitate the long-term unemployed, encourage labour mobility within the country, support new entrepreneurs and more. A more proactive migration policy is not easy amid politically sensitized migration debates. The ambition of this project was to strengthen the knowledge base of policy makers and encourage them to initiate new policies. Political decision makers need such support. The German experience of the Sussmuth Commission in looks like a very interesting example (and obviously a good practice) of an expert body which helped educate political decision makers on the complexities of migration. The Commission s work enabled them, at least to some extent, to overcome partisan interests in formulating policy and legislation. Since the design of this ARGO project in 2005 and its launch in 2006, many developments have further underscored the timeliness of the project and supported its fi ndings. Formerly high unemployment rates in Romania, Slovakia, Poland, (and Bulgaria) have come down. High emigration from these countries has further highlighted the need for immigration and recruitment to these countries, and possibly also return migration schemes. The European Commission has taken the initiative or encouraging closer cooperation between countries of origin and destination, promoting more matching foreign recruitment by Member States to meet their labour force needs, and advancing the goal of ethical recruitment through circular migration instead of permanent brain drain from third countries. Likewise, as planned in the European Commission s Work Programme in 2005, the EC introduced in late 2007 a proposal for a directive on recruiting highly skilled third country nationals. This proposal has already been subject of lively debate, with reserved approach from countries who fear that unifi ed rules could limit national interests. On the other hand, the directive proposal could also support introduction of such recruitment schemes in countries where political sensitivity on migration has so far obstructed recruitment of highly skilled workers from abroad to supplement domestic supply. And more support has been asked from the Commission: in the latter half of 2007, first the Prime Ministers of Romania and Italy (following turmoil in Italy, triggered by 9

10 Introduction violent incidents involving migrants) sent a joint message to the Commission asking the EC to better support Member States in managing migration. That appeal was in October followed by another: the Spanish Deputy Prime Minister and the Portuguese Prime Minister invited their EU partners 1 to increase cooperation towards a common European immigration policy. We hope that this publication can contribute with relevant facts and conclusions that both Governments and the European Commission fi nd useful. On behalf of the project management I want to thank all those who contributed, especially Elmar Hönekopp, the Research Coordinator of the Project, who gave substantial inputs to the design of the research and valuable comments and suggestions on the country reports. He also pulled together initial results at the concluding Conference of the project, arranged in June With regard to the demographic and labour force projections, Marek Kupiszewski and Jakub Bijak in the CEFMR laid important foundations, enabling comparisons between the countries covered by the national studies. Sincere thanks go of course to all the national researchers for their dedicated work in producing the richly informative national reports, and for further taking pains to condense versions for publication in this book: Dusan Drbohlav and Eva Janska in the Czech Republic, Agnes Hars and Endre Sik in Hungary, Emilio Reyneri in Italy, Marek Kupiszewski, Jakub Bijak, Anna Kicinger, Weronika Kloc-Nowak, Paweł Kaczmarczyk and Joanna Napierała in Poland, João Peixoto and Alexandre Abreu in Portugal, Monica Alexandru and Sebastian Lazaroiu in Romania, Boris Divinsky in Slovakia and Olena Malinovska and Ella Libanova in Ukraine. Thanks go also to Mark Griffi th for extensive English language editing no original contributor is a native English speaker. Finally, members of the project team in IOM s Regional Mission in Budapest, especially Alin Chindea and Monika Lazar, deserve thanks for their dedicated work on the project. 1 As reported by Migration News Sheet November 2007, published by Migration Policy Group (MPG). 10

11 C HAPTER ONE Population and labour force forecasts for selected European countries: assumptions and results Jakub Bijak and Marek Kupiszewski Introduction This chapter presents the assumptions and results of 50-year ( ) population and labour force forecasts 1 prepared for the countries analyzed in the project. It is intended to give a long-term demographic outlook at the future of populations of selected European countries and to set the scene for consideration of existing and future labour migration. The chapter consists of two parts. The fi rst part presents the assumptions of the population and labour force forecast, while the second part presents the results obtained in the forecast. 1.1 Background and assumptions of population and labour force forecast Forecast horizon, geographical scope, data sources and population dynamics model The forecast is prepared for the period (with 2004 as the base year), at five-year intervals ,, Population and demographic events are considered in five-year age groups, with the last (open-ended) group covering people aged 85+ for population and 75+ for the labour force. The geographical scope covers nine European countries analyzed in the ARGO 2005 project (hereafter: ARGO-9): the Czech Republic (CZ), Hungary (HU), Italy (IT), Poland (PL), Portugal (PT), Romania (RO), Slovakia (SK), and Ukraine (UA) and the United Kingdom (UK). Data on demographic variables (base population size and structure, fertility, mortality, and migration) come from two main sources, treated as complementary: the NewCronos database of Eurostat (epp.eurostat.ec.europa.eu, downloaded in February 2007), and the Recent Demographic Developments in Europe yearbooks of the Council of Europe 1 While well aware of the distinction between the terms forecast and projection, in the current study we always use forecast, as it refl ects our beliefs in the future developments of the components under study. We nonetheless readily concede that any forecast beyond the horizon of, say, 20 years, is in fact a projection. 11

12 CHAPTER 1 (in particular, the 2005 edition). Labour force participation data come from the ILO estimates available from the Laborsta database (laborsta.ilo.org, downloaded in February 2007), and consider only people aged 15+. Wherever necessary, the missing values have been supplemented by data from national statistical offi ces, or estimated on the basis of the available information. Subsequent subsections of this section present our assumptions on future developments of: (1) fertility, expressed in terms of total fertility rates; (2) mortality, in terms of life expectancies; (3) international migration fl ows, both within the system of nine countries under study (emigration rates per 1,000 population of a sending country), and net external migration flows; as well as (4) age-specifi c labour force participation rates. As our current study uses, wherever possible, the 2002-based CEFMR forecast on population and labour force, detailed qualitative and quantitative arguments on the assumptions concerning demographic and labour supply changes reproduce to a large extent those presented in the aforementioned research (Bijak, 2004; Bijak et al., 2004; Saczuk, 2004). The exceptions concern the addition of Ukraine, for which new scenarios have been developed, as well as a whole set of new assumptions concerning international migration flows. The study specifi es the assumptions for the 2004 forecast with special attention paid to those that differ in comparison to the assumptions made for the 2002 forecast. The forecast was prepared using the MULTIPOLES (MULTIstate POpulation model for multilevel Systems) model of population dynamics (for a detailed description of the model itself, see Kupiszewska and Kupiszewski, 2005). Assumptions on fertility Assumptions on target total fertility rates (TFR; children born per women aged 15 49) for 2054 are knowledge-based and as consistent as possible with other similar forecasts or projections (Eurostat, 2005; United Nations, 2007; national studies). The whole methodology and target values roughly follow the ones proposed in Bijak (2004), the only exceptions being Portugal (target TFR value modifi ed downwards by 0.1 due to recent fertility decline in that country) and Ukraine (new addition). For the purpose of the current study, four clusters of countries have been identifi ed, according to their common past TFR development patterns or to their cultural and geographical proximity. The following cluster-specific target TFRs have been assumed: 1.4 for South-Eastern and Eastern European countries (Romania, Ukraine); 1.5 for Central Europe (Czech Republic, Hungary, Poland, Slovakia), and for Italy; 1.6 for Portugal; 1.8 for the United Kingdom. In addition, an alternative high-fertility scenario has been prepared, where the values derived using the methodology described below have been additionally cumulatively increased by 0.01 a year, so as to reach targets higher than base targets by 0.5 child per woman. 12

13 Population and labour force forecasts for selected European countries The baseline 2004 TFR values and the 2054 targets have been bridged in the following way. Initially, until 2024, a polynomial Hermite interpolation was used, ensuring a smooth passage from the initial values to the target values reduced by 0.05, as well as from the initial slope (α = TFR 2004 TFR 2003 ) to the default zero. Afterwards, the 2024 and 2054 values were bridged linearly. The matrix formula for the Hermite interpolation is TFRt = s t H b, where t = 2005,, 2024, s t = (t 2004)/20, s t = [s t 3 s t 2 s t1 ], b = [TFR 2004 TFR α 0], and the Hermite coefficient matrix H is equal to: H = The 2004 sex and age-of-mother structures of births have been simplistically assumed constant throughout the forecast horizon. Assumptions on mortality The assumptions are based on life expectancy at birth (e 0, LE). In all countries under study mortality improvements are envisaged, resulting in an increase of LE for both sexes. We assume that in relatively high-mortality regimes these improvements can be mainly attributed to the reduction of age-specifi c mortality rates in the age group 0 19, in the first place concerning infant mortality. For most cases under study, however, mortality reductions are assumed to be equally distributed among all age groups. Only in the lowest-mortality countries, where infant mortality has been reduced to levels close to the biological minimum (due to technological life-saving developments, thus leaving hardly any room for further improvements), are the mortality decreases assumed to affect primarily adults (people aged 20 years or more). Historical data series on life expectancy have been collected from the 2005 Council of Europe yearbook, supplemented with Eurostat data for the lowest-mortality (highest-life expectancy) countries, including Japan. The series have been examined in order to approximate a linear trend of the maximum LE, following the proposition of Oeppen and Vaupel (2002). The estimated trends for both sexes (LE t = t for males, LE t = = t for females) were used to extrapolate maximum life expectancy until about 80 (males) and 85 years (females). Afterwards, the increase in maximum life expectancy is assumed to slow down. Contrary to Oeppen and Vaupel (2002), it can be argued that the linear increase in life expectancy in the 20th century was due to the decline in infant and child mortality, where currently there is not much left to improve (E. Tabeau, personal communication). Therefore, for the longer period the trend slope for males was reduced by 20%. For females the initial trend slope was reduced by 20% for 7 further years, by 40% for the next 10 years and by 60% for the remainder of the forecast period. The differentiation was made between the sexes, as a slow convergence of life expectancies for males and females was assumed, 13

14 CHAPTER 1 while the initial trend slope for females was greater than for males, which would produce the opposite effect. A comparison of the assumptions made in terms of life expectancy at birth, envisaged for 2050, is presented in Table 1. Table 1: Target life expectancies at birth for 2050 Target e 0 assumed for 2050 Males Females Czech Republic Hungary Italy Poland * Portugal Romania Slovakia Ukraine United Kingdom Japan (max) Source: own elaboration Additional assumptions on mortality developments for Ukraine have been considered, taking into account a possible spread of the HIV/AIDS epidemics. Under such a scenario, life expectancy would deviate downwards from the trend in the period , stagnate until 2014, and slowly recover and ultimately return to the base trend by The size of the downward adjustment has been assumed as 2.75 years of life for males and 3.75 years for females, in order to be consistent with the World Bank (2006) forecasts of the impact of HIV/AIDS on Ukrainian society and economy. The latter study assumed that in 2014, life expectancy in Ukraine in the presence of HIV/AIDS epidemics would range between 61.6 and 63.4 for males, and 71.0 and 72.9 for females, which encompasses the values assumed in the current study, equalling 61.8 and 71.8 years, respectively. International migration The MULTIPOLES model, which is de facto a multi-regional model (Kupiszewska, Kupiszewski, 2005) requires, for a multinational forecast, preparation of migration assumptions for two classes of migration: origin-destination intra-system international migration for flows between modelled countries (in case of the ARGO 2005 project a 9x9 matrix), and for each country the net migration gain/loss resulting from the exchange of population between this country and the rest of world (all countries which do not belong to the modelled system). These two types of fl ows are treated differently in the model. The scenarios of their expected changes are specifi ed in the two subsequent sections. However, it should be noted that designing such scenarios is highly hypothetical and arbitrary. Time and financial resources have precluded the elaboration of a further improved methodology for forecasting migration fl ows. 14

15 Population and labour force forecasts for selected European countries Migration within the system of ARGO-9 countries The scenarios for origin-destination migration are defi ned as a set of matrices of crude origin-destination specifi c emigration rates per 1,000 inhabitants of the sending country for the benchmark year (Kupiszewska and Kupiszewski, 2005). Table 2 presents the estimated origin-destination fl ows for 2004, taken as maximum values from the fl ows reported by the origin and destination countries (Kupiszewski, 2002: 109), and adjusted proportionally, whenever data were available by citizenship of migrants and not by origin / destination. On that basis, a matrix of emigration rates has been generated, which has been modified over time of projection to express various migration scenarios. Table 2: Estimated intra-system migration matrix for 2004 From => To CZ HU IT PL PT RO SK UA UK CZ , ,152 4,933 7,266 HU , ,101 IT ,839 PL 1, , ,985 PT ,750 RO 361 9,642 74, ,548 SK 15, ,834 UA 16,436 2,625 41,257 1, UK 635 4,163 4, ,262 1, Sources: Eurostat/NewCronos; Council of Europe (2005); own elaboration In order to address the issue of uncertainty inherent in international migration forecasting, we consider two scenarios. The fi rst one, labelled Development and Liberalization, foresees economic development and deregulation of international migration, and is characterized by an assumption of reasonable economic growth (2 5% GDP increase per annum). Socio-economic development in different parts of the world would imply strong pull factors in the developed economies, and the associated liberalization of migration control measures. On the contrary, the second scenario, labelled Stagnation and Control, assumes fl agging economies and restrictive migration policies, coupled with strong push factors in the worse-off countries. For comparison, status-quo and no migration simulations have been run. A. Development and Liberalization scenario For the EU members states Development and Liberalization assumptions usually result in higher intra-union migration and increase in net migration from outside the EU. However, within the EU there are two groups of countries, high-income old member states and mid-income new ones. The former group of countries has in general a positive migration balance of exchanges with other EU member states and the new countries are losing migrants. After the last two rounds of EU enlargement this contrast sharpened. 15

16 CHAPTER 1 It is difficult to assess how economic development will affect the migration fl ows from new member states to old ones, as there will be two processes occurring in parallel. On the one hand, economic development creates jobs and stimulates fl ows from poorer new to richer old countries. On the other, and simultaneously, this development reduces unemployment and increases salaries, diminishing therefore two important push factors in the new countries: unemployment and low salaries. In consequence, we assumed that the economic development related increase in migration will be moderate, starting at 5% in and reducing over time by 0.5% per each fi ve-year forecast period, ultimately stabilizing after The reduction is justifi ed by the assumption that over time economies of new countries will grow faster than economies of old countries, thereby reducing the incentive to migrate. We also assume no increase in migration within the groups of old and new countries. Migration from Ukraine to old EU member states will be growing moderately until 2029 (by 2.5% per each forecast step), and destinations will slowly be shifting from new to old countries. We also assumed that migration to Ukraine and Romania will remain unchanged, despite growing emigration from these countries. Return migration from EU-8 to EU-15 countries will initially grow slowly, as a result of increased return migration, to stabilize after 20 years. In the short term, the key factor controlling migration will be whether labour markets of old member states open to migrants from new member states. Within the fi rst forecast step ( ) there will come the end of the 3 year period of the years scheme of restrictions. We assume that all countries except Germany and Austria will lift restrictions by the end of April However, we think that most of those who wanted to emigrate from the old to new (2004 enlargement) countries will turn out to have already done so in the period and that the increase in outfl ow will occur predominantly in the fi rst forecast period. We assumed the increase to be 4 5-fold, not taking into account short-term migration. In the second forecast period we assumed a moderate increase in fl ows to Germany which will have to lift restrictions in 2011, associated with a relative decrease in fl ows to the UK. Later, it is assumed that the lack of legal restrictions will have no impact on fl ows. Among the ARGO-9 EU countries, the Czech Republic, Poland and Slovakia did not impose any restrictions on labour migration for Romanian citizens, while Hungary and Italy liberalized only a few sectors of the economy. We assumed that the increase in emigration from Romania will affect all destination countries except Ukraine. This is to express our belief that lifting administrative restrictions by poorer EU countries will have a similar effect as the attraction of rich countries, and to acknowledge the existence of a sizable Hungarian minority in Romania. It is also assumed that most of the old EU member states will lift restrictions on labour migration for Romanian citizens after 5 years. Similar scenarios to that of migration from EU-8 to EU-15 are envisaged, though the expected short-term increase will be smaller than in the former case, mostly because a lot of Romanian migrants either already emigrated or will emigrate before the lifting of restrictions. An increase in migration to the old EU member states will be at the expense of migration to the EU-8. Emigration from Romania will also decrease faster than in the case of 16

17 Population and labour force forecasts for selected European countries the EU-8 countries, to express our belief that it is unlikely that very high outfl ows could be maintained for a long time. In all cases it is assumed that after 2029 the fl ows will stabilize. This is due to diffi culties in reasonably predicting changes of such a volatile variable as international migration. B. Stagnation and Control scenario In the Stagnation and Control scenario we assumed that in general the direction of flows will remain the same as in Development and Liberalization scenario, but the changes in their intensity will decrease by half. This reduction will be much smaller for the changes of outflows of migrants from new to old EU member states, pending the removal of restrictions on mobility of labour: only to 70 80% as compared with values assumed for Development and Liberalization scenario. Return fl ows of migrants will remain unchanged, as they are less dependent on the economic cycle (a silent assumption in the scenario setting is that economic growth and decline occurs with the same intensity in all countries simultaneously). Net external migration scenarios from other countries of the world The second migratory variable for which assumptions are made (see page 2) is net external migration (NM) of particular countries, concerning population exchange with all countries outside the ARGO-9 area ( rest of the world ). For statistical reasons, the MULTIPOLES is designed to take assumptions on the crude numbers of migrants and not migration rates for exchanges with the rest of the world (see Kupiszewska and Kupiszewski, 2005). For the purpose of scenario-setting, the NM aggregate was decomposed into two additive components: migration balance with non-argo countries of the EU and EFTA (NM Eur ), and net migration from the other parts of the world (NM Oth ). The forecast steps are fi ve-year, with time index t = 0, 1,, 10 for the periods , ,, , respectively. The projected NM t values are yearly arithmetic averages for the particular periods. The initial values for 2004 have been estimated as total net migration, as reported by the countries themselves, less net migration within the ARGO-9 system. The methodology of initial data estimation therefore follows Kupiszewski (2002: 109). As the forecast is based on the fi ve-year averages, the values for the zero period of the forecast, i.e (NM 0 ), are calculated as weighted averages of respective yearly values, with weights wt for particular years t equalling: w 2000 = 0.10, w 2001 = 0.15, w 2002 = 0.20, w 2003 = 0.25, and w 2004 = 0.30 (exceptions: Italy and Ukraine countries with several missing observations, for which the weights w t have been proportionally adjusted, and Portugal, for which an arithmetic average for has been used, calculated from the national data). Assumptions on target values of migration balance with the outside world for the period are knowledge-based and follow the rationale presented below, both for migration within the EU and EFTA (NM Eur ), and for fl ows from other parts of the world (NM Oth ). Also here, two scenarios are considered: Development and Liberalization, and Stagnation and Control. 17

18 CHAPTER 1 A. Development and Liberalization scenario a) External migration within the EU and EFTA, NM Eur Czech Republic, Hungary and Italy. A moderate increase (25%) in net migration throughout the forecast horizon is assumed, due to increasing intra-european mobility following favourable socio-economic developments. Poland and Slovakia. It is expected that almost all EU and EFTA countries will lift restriction on mobility of labour in 2009, with the exception of Germany and Austria, which will likely do so in 2011, and Switzerland in This would result in increasing net emigration in the two fi rst forecast periods ( and ) by a factor of 1.25, followed by a decline to a zero balance by 2024, and a subsequent increase of net migration gains, due to growing return migration, ultimately reaching the levels from the initial period ( ), only with the opposite (plus) sign. Portugal. Portugal s positive migration balance is to some extent fuelled by return migration. It is assumed that favourable economic conditions will increase this category of migrants. Another factor is retirement migration, which may increase as Portugal will be a destination competing with France and Spain. For that reason, we assume a 50% increase from the initial level for Romania. Strong demand for labour in EU countries and an income gap will drive emigration from Romania. As most EU member states decided to keep restrictions on labour migration for Romanian citizens, and this will last most likely until 2012, in the first forecast period ( ) only a moderate increase by 50% in migration loss is expected, mostly fuelled by unrestricted forms of labour migration (i.e. delivery of services and self-employment). In the second forecast period ( ) a very substantial outfl ow, larger by a factor of three, is expected, as all restrictions will be most likely lifted in this period. The target value is assumed to be 1.5 of the initial value. Ukraine. Uncertain economic prospects for Ukraine, particularly for economic reforms, and a strong demand for labour in EU countries will result in a net migration loss, for which we assume no change in magnitude by the end of the forecast horizon. United Kingdom. Negative net migration in the UK is mainly fuelled by retirement emigration to France and Spain. Financial resources of these migrants are saved before migration, and development over coming 50 years may increase the number of people who can afford migration. We assume an increase of the target by 50% from the initial value. b) External migration outside the EU and EFTA, NM Oth Population ageing and strong demand for labour will result in an increase of net migration gain by 50% in the Czech Republic, Hungary, Romania and Slovakia, and a decrease in net migration loss by 50% in Ukraine an emigration country. Keeping the migration balance of Ukraine below zero even under the assumption of economic development can be justifi ed by an ever more important role of Russia as a growing petrodollar-fuelled economy with a strong demand for labour. For Italy and the United Kingdom we assumed the same target values of net immigration gains as at the begin- 18

19 Population and labour force forecasts for selected European countries ning of the forecast period, while for Portugal target values equal half of the initial values. The rationale for all three cases is a very high magnitude of net yearly infl ows observed already at the beginning of the 21st century. In turn for Poland the initial net value of NM Oth = 942 people is likely heavily underestimated in the Development and Liberalization scenario we therefore expect a 15 times increase by B. Stagnation and Control scenario a) External migration within the EU and EFTA, NM Eur Czech Republic, Hungary, Italy and Portugal. No changes assumed. Poland and Slovakia. The expected schedule for lifting restrictions on mobility is the same, as in the previous scenario, yet we assume that although the demand for migrants will be weaker due to fl agging economies in Western Europe, the negative push factors at source will prevail. This will result in a doubling of net emigration loss in the two first forecast periods ( and ). Later on we expect a slow increase to zero by the end of the forecast horizon, due to return migration, though smaller than in the previous scenario. Romania. A moderate demand for labour in the EU countries will be compensated for by an increasing pressure to leave the country due to a poor economic situation, which will drive larger migration from Romania than in the previous scenario. Hence, we assume a doubling in migration loss in the fi rst forecast period ( ), a very substantial increase, by a factor of 3.5 in the subsequent period ( ), especially as all political restrictions are likely to be lifted. The increases will be followed by a slow return to the trajectory aiming towards the target value, set to equal the initial value. Ukraine. A stagnating Ukrainian economy is expected to be a key push migration factor, doubling the net migration loss by the end of the forecast horizon. United Kingdom. In this scenario, we assume that the stagnation over 50 years will not lead to the increase of the number of people who could afford retirement or similar migration. Therefore, we assume no change in net migration fi gures. b) External migration outside the EU and EFTA, NM Oth In this scenario we expect a decline in net migration gain by 50% in all countries with positive NM Oth, with the exceptions of Portugal (decline by 80%) and Romania (decline by 65%), due to relatively high initial levels of immigration in two latter countries, unlikely to persist over the longer term. For Ukraine, a net migration loss is expected to increase by 50%, as compared to the initial values from , due to the continuing presence of unfavourable push factors fuelling emigration. The assumed values of particular net external migration components achieved by the end of the forecast horizon are presented in Table 3. With the exception of post-enlargement deviations for NM Eur described above (for Poland, Romania and Slovakia), the initial and target NM values have been bridged by the means of an exponential interpolation, according to the following formulae: 19

20 CHAPTER 1 NM Eur = t NMEur + 10 (NMEur 0 NMEur ) exp( r t), and 10 NM Oth = t NMOth + 10 (NMOth 0 NMOth ) exp( r t). 10 In the above equations, r denotes the growth rate of the exponential function, here assumed to be This solution ensures a smooth passage from NM 0 to NM 10 and the asymptotic stabilization on the target level. Table 3: Net external migration exchange with non-argo-9 countries: 2004 and 2054 Country Development Stagnation Average and Liberalization, 2054 and Control, 2054 NM Europe: Other: Total Europe: Other: Total NM Eur NM Oth NM NM Eur NM Oth NM Czech Rep ,224 Hungary ,774 Italy ,824 Poland Portugal * ,845 Romania Slovakia Ukraine ,441 United King ,216 * For Portugal, an average for was used as a baseline value of NM. Sources: Eurostat/NewCronos; Council of Europe (2005); Portugal: own elaboration For all migration scenarios, age and sex structures from 2004 (or latest available year) have been assumed to be constant throughout the forecast horizon. For migratory fl ows among the ARGO-9 countries (intra-system), eight model age schedules have been applied. These depend on largely defi ned regions of origin and destination of migrants, in all cases separately for males and females. We distinguished three such regions: Central and Eastern Europe (Czech Republic, Hungary, Poland, Romania, Slovakia and Ukraine), Southern Europe (Italy and Portugal), and the United Kingdom as a separate, one-country region. For net external migration, country-specifi c age schedules have been defined in terms of percentages, summing up either to for migration gains, or to for loses. Such schedules have been estimated from the 2004 Eurostat data on migration by age, separately for males and females. In case no structures were available in the dataset for a given country, those from an ARGO-9 country with similar migration patterns have been used instead (for Ukraine, Romanian age schedules were applied, with a minus sign). For Poland, the turn from negative to positive net migration under the Development and Liberalization scenario in the period has been associated with a change from Polish to Romanian age schedule. The respective country-specific age schedules for external fl ows were calculated separately for males and females. 20