Overview of Demographic. Eastern Europe and the Former Soviet Union. Change and Migration in. Camille Nuamah (for Bryce Quillin)

Transcription

1 Overview of Demographic Change and Migration in Eastern Europe and the Former Soviet Union Camille Nuamah (for Bryce Quillin) Albania World Bank Conference on Development Economics 10 June

2 ECA Regional Studies Unleashing Prosperity: productivity growth (2008) From Red to Gray: the 3 rd transition (2007) Migration and Remittances (2007) Enhancing Job Opportunities (2005) 2

3 The majority of the region faces the challenge of transitioning to a market economy and total population decline. Percentage Change in Population in ECA Countries, percentage Source: UN Population Prospects

4 Population decline is partly driven by falling fertility rates Albania may fall below replacement levels by Projected Fertility Rates in Eastern Europe and the Former Soviet Union, EU10 SEE Middle Income CIS Low Income CIS Albania Source: United Nations Note: Sub-regional aggregates created through simple averages according to: EU10 (Bulgaria, Czech Rep, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Rep, and Slovenia); SEE (Bosnia and Herzegovina, Croatia, FYR Macedonia, Montenegro, and Serbia); Middle Income CIS (Belarus, Kazakhstan, Russia, Turkmenistan, and Ukraine); Low Income CIS (Armenia, Azerbaijan, Georgia, Kyrgyz Rep, Moldova, Tajikistan, and Uzebekistan. 4 percent

5 Moreover, elderly dependency ratios will increase dramatically by 2025, including in Albania. Increasing Elderly Dependency Ratios, Tajikstan Uzbekistan Turkmenstan Turkey Azerbaijan Kyrgystan Kazakhstan Albania Moldova* Bosnia & H FYR Macedonia Armenia Slovakia Russia Poland Georgia Czech Romania Slovenia Belarus Serbia & M Hungary Ukraine Lithuania Croatia Estonia Latvia Bulgaria

6 15% 10% 5% 0% -5% -10% -15% An aging population does not necessarily imply slower growth as labor productivity has had a stronger impact on growth than aging. Average annual growth rate in GDP per capita and its components, GDP/EMP EMP/Working age POP Working age POP/POP GDP/POP 6 Azerbaijan Kazakhstan Armenia Russian Federation Latvia Albania Ukraine Georgia Estonia Belarus Lithuania Bulgaria Hungary Moldova Romania Croatia Slovenia Slovak Republic Poland Czech Republic Macedonia, FYR Turkey All data are from 2005 except for Albania and Kazakhstan for which data for 2004 are utilized.

7 Countries with large declines in their working age population have increasingly become large magnets for labor migrants from countries with growing populations and these trends will increase. Changes in Migrant Share of Population Required to Maintain the Share of the Labor Force to Total Population in 2025 at current Levels 450% 400% Share of additional migration needed as a percentage of current migation stock (left scale) Current migrant stock as a percentage of total population in 2000 (right scale) 350% 300% 250% 200% 150% 100% 50% 0% 16% 14% 12% 10% 8% 6% 4% 2% 0% 7 Slovakia Slovenia Czech Republic Bosnia and Herzegovina Bulgaria Hungary Romania EU15 Poland Croatia Macedonia Russian Federation Serbia and Montenegro Ukraine Source: UN Population Prospects, 2004, International Migration, 2002

8 Since the start of transition, migration has been large and followed a biaxial pattern that will continue to persist yet flows will now move increasingly from countries with growing populations to those that are shrinking. 8

9 Migrants will be drawn from those countries in the region with growing populations Central Asia, Caucasus, and Albania. Working Age Population ( ) and Net Migation (2007) Tajikistan Kyrgyz Rep Uzbekistan 0.06 Azerbaijan 0.04 Turkey 0.02 Albania Armenia Kazakhstan Georgia Lithuania Romania Belarus Bulgaria Macedonia Latvia Moldova Ukraine Hungary Slovak Rep Estonia Croatia Russia Slovenia Poland Czech Rep Net Migration per 1000 Population (2007) Source: UN Population Prospects and World Bank staff estimates. 9 Working Age Population to Total Population ( )

10 The key desintation countries will be those losing population to emigration and demographics Baltics, SE Europe, Poland, Ukraine and Moldova. Working Age Population ( ) and Net Migation (2007) Tajikistan Kyrgyz Rep Uzbekistan 0.06 Azerbaijan 0.04 Turkey 0.02 Albania Armenia Kazakhstan Georgia Lithuania Romania Belarus Bulgaria Macedonia Latvia Moldova Ukraine Hungary Slovak Rep Estonia Croatia Russia Slovenia Poland Czech Rep Net Migration per 1000 Population (2007) Source: UN Population Prospects and World Bank staff estimates. 10 Working Age Population to Total Population ( )

11 And to those countries with declining populations despite immigration Central Europe, Russia and Belarus. Working Age Population ( ) and Net Migation (2007) Tajikistan Kyrgyz Rep Uzbekistan 0.06 Azerbaijan 0.04 Turkey 0.02 Albania Armenia Kazakhstan Georgia Lithuania Romania Belarus Bulgaria Latvia Moldova Estonia Macedonia Ukraine Slovak Rep Russia Poland Hungary Croatia Slovenia Czech Rep Net Migration per 1000 Population (2007) Source: UN Population Prospects and World Bank staff estimates. 11 Working Age Population to Total Population ( )

12 Albania and other emigration countries of the region have benefitted from migration as exhibited in the form of very large remittances inflow levels, which are among the largest in the world. Workers Remittances + Compensation of Employees to GDP (2006) Kiribati Guatemala West Bank and Gaza Gambia, The Kyrgyz Republic Cape Verde Nicaragua Philippines Albania Nepal Serbia and Montenegro Jamaica Bosnia and Herzegovina Jordan El Salvador Armenia Honduras Haiti Lebanon Lesotho Guyana Tonga Moldova Tajikistan Source: IMF Balance of Payments Statistics. 12

13 Yet Migration also generates costs Costs for receiving countries New competition: wages may fall as a result of migrants especially for the lower skills Strain on existing social services Problems with integration of foreign workers Criminality from illegal migration Costs for sending countries Loss of human capital, especially if migration is permanent Disruption to families and communities (may require additional Govt serv) Criminality from trafficking Remittances may raise the reservation wage and cost of labor at home Costs for migrants Heavy penalty on family life (over half return home due to family related concerns) Costs of leaving familiar and adapting to new culture 13

14 One option among many for improving policies could be to encourage circular migration Circular migration would/could: Utilize migrants and their acquired skills for economic development in sending country Reduce brain drain because absence is temporary Probably address some fears in receiving countries about migrants staying permanently Provide an alternative to full liberalization for receiving countries 14

15 Enhancing Job Opportunities in Eastern Europe and the Former Soviet Union During the past 15 years Eastern Europe has seen a growth resurgence But there s been no jobs resurgence instead a jobs deficit And a large informal sector has grown These trends are due to: Large reallocation of labor across sectors, firms, and locations Change in ownership of existing firms and closure of obsolete ones Development of a new private sector of SMEs Expanding job opportunities requires Developing adaptable labor market by encouraging employers to hire flexibly, and to train workers Skills development Improving the investment climate for both foreign and local entrepreneurs 15