The Economic and Demographic Effects of Labour Migration in the EU Eastern Partners and Russia: A synthesis report

CARIM-East: Creating an Observatory of Migration East of EuropeThis paper summarises the findings of country studies on the main economic and demographic effects of labour migration in the EU Eastern partners and Russia. The major positive effect of labour migration in the sending countries is that it provides temporary relief on domestic labour markets and helps reduce unemployment, particularly in economically-deprived areas. An inflow of labour migrants from other countries helps address existing skill shortages and finance pay-as-you-go pension schemes that are coming under considerable pressure because of population ageing. But the boost to pensions is small because of the widespread informal employment of migrants. Demographers of the sending countries worry that large-scale outflows of native workers which significantly exceed inflows of workers from other countries depletes population and changes its age structure. This, of course, is particularly dangerous for ageing societies. Findings on the economic effects of migration through the return of skilled workers are mixed and remain largely conjectural. Overall, labour migration contributes to the economic development of countries at both ends of the migration spectrum to a lesser extent than it should. This may be attributed to the fact that there are still no enabling conditions for effective brain circulation, productive investments and supply chain relations among migrants in the observed countries.CARIM-East is co-financed by the European University Institute and the European Union