East-to-West migration and labour market integration in the Baltic Sea region: history, current trends and potential

The Nordic countries established a common labour market in the mid 1950s. This resulted in comparatively intensive labour migration between Finland and Sweden during the 60s, whereafter migration has decreased. From time to time particularly bottleneck problems at one Nordic nation’s labour market have been solved by temporary immigration from another Nordic country. Immediately after the fall of the Iron Curtain, immigration of labour force from former socialist countries generally increased. This holds also true for the Nordic labour market where a share of immigrants stem from countries around the Baltic Sea. However, contrary to expectations, migration flows from Estonia, Latvia, Lithuania, and Poland to Scandinavia and Finland have eventually decreased in the course of the last decade. After Finland’s and Sweden’s entrance to the single European labour market, there are few signs of again changing international migration pattern. With the foreseeable enlargement of the European Union within the next ten years, there is a debate on the size and character of potential migration, particularly from East to West. Accordingly, the emerging integration of the international labour market around the Baltic Sea is an issue of high policy relevance. The expected shortage of labour supply, both for the old and the emerging new economy, is at the core of the current debate. The final purpose of this project is to discuss the emergence and the potential characteristics of a future common Baltic Sea Region labour market. In this paper we will start the discussion by quantifying labour force migration from Russia, Estonia, Latvia, Lithuania and Poland to Sweden, and particularly analysing the integration processes following immigration. It should be remembered, that the majority of those receiving residence permit from these countries to Sweden is close relatives to earlier immigrants. The findings will be supported and illustrated by the use of official statistics for each year during the 1990´s. These statistics are based on individual grossstream data that allow for a detailed analysis and comparison of labour market careers. Hence the contribution to economic integration/segregation by recent westbound immigrants with differing background characteristics (individual socio-economic assets e.g. level of education, as well as cultural background e.g. country of origin) can be pointed out. In addition the importance of labour migration in the Baltic Sea Region for different sectors of the old and the emerging new economy will be discussed