[A-List] The Exodus from Eastern Europe

["Yoshie Furuhashi" <critical.montages@xxxxxxxxx>]

FULL TEXT: <http://hir.harvard.edu/articles/print.php?article=1515>
At a Loss
The Exodus from Eastern Europe
> From Ethnic Conflict, Vol. 28 (4) - Winter 2007

Kiran Bhat is a staff writer for the Harvard International Review.

. . . . . . . . . . . . . . . . . . . .

The Exodus

Since accession to the European Union, about 60,000 able-bodied
working-age Latvians left their homeland for better opportunities,
many as mushroom pickers in Ireland or laborers in Britain. While many
were skilled professionals at home, they had the chance to receive
higher wages abroad doing work that requires much less skill. As a
result, Latvians have left their homeland in droves.

At first the number does not appear that striking. But upon further
scrutiny, realizing how small Latvia's economy is, the impact of
having 60,000 fewer workers is disconcerting: that number constitutes
two percent of the Latvian population. A study by the Latvian National
Bank postulated that the country's population could be half of what it
is now by 2050. This population loss has left entire villages in the
Latvian countryside devoid of any working-age inhabitants, crippling
the rural economy and limiting the government's ability to collect
revenue by destroying the tax base.

The problem is not restricted to Latvia. Neighboring Lithuania has
lost three percent of its population, over 100,000 people, to foreign
markets as well. A 2006 report by consultant John Salt for the Council
of Europe, a 46-member European entity, listed Poland, Lithuania, and
Latvia among countries with consistent population loss due to an aging
public and net emigration.

Immigration does not look as if it will stop anytime soon. The
economic incentive to leave Eastern Europe for better opportunities in
Western Europe exists. Unemployment rates in Poland and Slovakia, two
leading Eastern economies, hovered around 15 percent in 2006, meaning
that a very sizeable portion of the working-age population cannot find
work under the current structure. In contrast, the unemployment rates
in Britain, Ireland, and Sweden stayed closer to five percent,
implying that migrating to a more dynamic economy in which one can
find a good, high-paying job is much easier than finding a
comparatively bad, low-paying job at home. As long as an economic
incentive exists for emigration, Eastern Europeans will emigrate.

. . . . . . . . . . . . . . . . . . . .

An article in the December 2005 edition of The Economist entitled "The
brain-drain cycle" cited Ali Mansoor, an economist at the World Bank,
as claiming that it may take ten years to see the full effects of
migration on the Polish economy, but eventually it may shift up the
average age of Poland's residents significantly. Without as many
workers to support the elderly and create the next generation, the
productivity and economic growth of countries such as Poland could
stall considerably.

The same article condemned many Eastern European countries to the sad
fate of having a "rich-country age and poor-country economy." Already
older on average than Western Europe and most of the world, the exodus
from the region could exacerbate an already existing problem to the
extent of debilitating the economy.

Potential Brain Drain

While population loss in Eastern Europe has been empirically
established, a brain drain, in which skilled professionals leave in
large quantities to work in other countries, would have detrimental
ramifications from both an economic and social perspective. While
approximately 12 percent of those who leave Eastern Europe are in the
skilled labor force, most emigrants are working-age laborers with
little or no post-secondary education or college students looking to
study abroad.

However, there is brain drain to some extent. One in ten doctors left
Poland, and about 20 percent of Polish emigrants work in jobs that
require considerably less skill than they possess, but most studies
show that Poland retains more than enough doctors and teachers for its
populace. And while to some extent smaller countries such as Latvia
and Lithuania are losing workers and the economic gains that their
presence brings, brain drain itself is not yet having any measurable
impact on the economy of either.

Another phenomenon, termed "brain waste," occurs when skilled workers
leave their home countries to take on jobs in the West that require
much less training. Some 12 percent of Eastern European workers in the
United Kingdom are working as unskilled laborers despite having had
some tertiary education in their homelands. Such "brain waste" reveals
the inherent weakness of Eastern European economies in comparison to
more established markets. It is hard to compete when your market for
skilled labor offers trained professionals fewer opportunities than
foreign unskilled labor markets offer.
--
Yoshie