ukrainian emigration to the eu: labour market perspective

Ukrainian Emigration to the EU:

Labour Market Perspective

Oleksandra Betliy

Warsaw, June 11, 2013

Institute for Economic Research and Policy Consulting – www.ier.com.ua

2Content

• Ukraine: some facts

• Migration profile of Ukraine

• Visa policy

• Ukraine and the EU

• Migration policy

• Experts about future migration of Ukrainians to the EU


3

Ukraine: some facts


4Ukraine

Population: 45.6 millions as January 1, 2012 51.9 millions as January 1, 1991

Urban population: 69% of totalShare of children (0-14 years): 14% of total in 2012

21% of total in 1991Share of people older than 65: 15% of total in 2012

12% of total in 1991Life expectancy at birth: 71.0 years

including: females 75.9 yearsmales 66.0 years


5Economic situation Major shock: transformation from centrally planned to

market economy after the collapse of the USSR

2030405060708090

100110120130

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

real GDP employment real wage real productivity

index, 1990 = 100

Source: Ukrstat


6Unemployment patternsUnemployment patterns

0

2

4

6

8

10

12

14

0

500

1000

1500

2000

2500

300020

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Unemployedeconomically activepopulation, thous.persons (ILO)Officially registeredunemployed, thous.persons

Unemployment rate,% of economicallyactive population(ILO), right scale

thousands persons %

Source: Ukrstat


7Coping mechanisms for householdsCoping mechanisms for households

• Engagement of informal activities• Migration• Risk aversion, including work after retirement, low

job mobility, readiness to work despite wage arrears and forced part-time job, and high employment in public sectors

• Downturn in consumption• Family support and social safety nets• Delayed payments for housing and utility services • Households’ savings• Development of small business• Crime


8

Migration profile of Ukraine


9Migration profile of Ukraine

• 1.2 m individuals (3.4% of population in age between 15-70 years old) either worked or looked for a job abroad in the period of January 2010 - June 2012 (results of recent Ukrstat’s survey)– 98.2% of these individuals worked abroad, while the rest

looked for a job– 4.8% and 2.2% of economically active men and women,

respectively, were labour migrants– 2.2% and 6.3% of economically active individuals in urban

and rural areas, respectively, were labour migrants– 64.9% of labour migrants had complete secondary

education. while 15.4% had tertiary education.

• Number of labour migrants reduced:– Share of labour migrants in working labour force reduced

from 5.1% in 2005-2008 to 4.1% in 2010-2012


10Migration profile of Ukraine Origin of labour migrants

Source: Ukrstat survey

North; 6,7Center; 3,3

South; 8,6

East; 9,8

West; 71,6




Russia, 43.2

Poland, 14.3

Italy, 13.2

Czech, 12.9

Spain, 4.5Hungary, 1.9

Portugal, 1.8Other, 8.22010-2012

Russia, 48.1

Poland, 8.0

Italy, 13.4

Czech, 11.9

Spain, 2.7

Hungary, 3.2

Portugal, 2.6Other, 10.1

2007-2008


12Migration profile of Ukraine :status of migrants


• Many migrants work on seasonal works – circular migration

• Between 2010-2012 one labour migrant made on average 3 trips

• Average length of work – 5 months

• Frequency of home visits depends on the destination country (due to visa regimes)

• High share of illegal migrants

work and residence

permit, 38.7

work permit, 12.8

temporary registration,

23.7

tourist visa, 3.7

without official status, 16.7

undefined status, 4.4


13Migration profile of Ukraine:destination countries


0

100

200

300

400

500

600Ru

ssia

Pola

nd

Italy

Czec

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ic

Spai

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Ger

man

y

Hun

gary

Port

ugal

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rus

Oth

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untr

ies

Basic or primary education

Completed secondaryeducationBasic high or uncompletedhighComplete high

thousand persons


14Migration profile of Ukraine:sector of work


8.55.4

51.6

8.1

2.9 2.9 4.3

16.311.3

4.2

45.7

9.1

3.6 4.2 3.6

18.3

0

10

20

30

40

50

60Ag

ricul

ture

Indu

stry

Cons

truc

tion

Who

lesa

le a

ndre

tail

trad

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and

Rest

aura

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pes

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onom

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tivity

Prov

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indi

vidu

alse

rvic

es

2007-2008 2010-2012

% of total number of working migrants




0

5

10

15

20

25

30

35

40

45

Professionals,technical staff

Employees intrade andservices

Skilledagricultural

workers

Skilled workerswith

instruments

Skilled workerswith industrial

machines

Simplestprofessions

Labour migrants, 2010-2012 Employed, 2011

% of total


16Migration profile of Ukraine:skills mismatch

• Ukrainian labour market is characterized by high skills mismatch. More than 50% of employed are formally overqualified for their jobs

• On domestic market there is a oversupply of white-collar workers, and a deficit of blue-collar skilled employees

• There is an evidence of occupational downshifting (‘brain waste’) among Ukrainian migrants

• As a result, depleted human capital and lower productivity (if these migrants return to Ukrainian labour market)



Total Women Men Urban Rural

Number of labour migrants, thous. persons 1161 403.2 757.7 529.0 631.9

Including, %

Equivalent occupation 28.7 10.9 38.1 32.8 25.2

Different from qualification 23.7 28.0 21.4 29.0 19.2

With lower qualification 5.2 5.3 5.1 8.3 2.5

With higher qualification 2.6 2.8 2.4 2.9 2.3

At work, which does not require qualification 39.5 53.0 32.3 26.6 50.2

Not defined 0.3 - 0.7 0.4 0.6



18Migration profile of Ukraine:push factors

• In the beginning of 90s personal (including ethnic) motives for migration dominated, while later migration became labour-driven

• Major reasons for labour migration:– Low employment opportunities– Low earnings– Unstable earnings (wage arrears, administrative leaves,

etc.)– (At a lower degree) lack of protection of human rights



Average wage in Ukraine in 2010-2012:

USD 329 Total, thous. pers.

Distribution of earning in USD, %

Average monthly earnings,

USD,2010-12

<250

251500

5011000

1001-

2000

>2000

Number of labour migrants that reported earnings 1002 4.4 21.8 43.1 24.8 5.9 930

Russia 407.7 2.6 24.8 46.2 23.0 3.4 874

Poland 151.4 14.9 40.4 38.4 5.4 0.9 560

Italy 146.6 4.4 11.5 47.1 27.4 9.8 1056

Czech Republic 131.6 2.7 6.0 41.5 44.3 5.4 1137

Spain 43.5 - 19.8 49.4 26.7 3.9 943

Germany 27.8 - - 25.5 25.5 48.9 1798

Hungary 19.6 - - 70.9 29.1 - 969

Portugal 18.6 - 10.8 53.8 31.2 4.3 1019

Belarus 17.9 8.4 70.9 20.7 - - 432

Other 37.7 - 20.2 16.7 46.7 16.2 1306



• Impact of migration:– Worsened demographic situation: near 1.1 m persons

emigrated – reduction of working-age population. Besides, migration often means delay in childbirth

– Labour market impact:• Brain drain and brain waste• Likely reduces labour market pressure

– Often improves welfare of households through remittances• Remittances are mostly spent on everyday

consumption, purchase of durables• 12% of migrant households spend remittances on

education– Increase pressure to social security and health care

systems as temporary migrants don’t contribute to the system, but demand services after return


21

Visa policy


22Visa policy

• Ukraine is encircled with substantial and non-symmetrical visa barriers

• Visa barriers restrict migration flows (however, likely only to a limited extent)

• Citizens of Ukraine can travel visa-free to 43 countries of the world , mostly to CIS countries and the countries that intend to attract tourists

• Visa policy of foreign countries towards citizens of Ukraine is not always open and transparent

• According to a research by Ukrainian think-tanks, visa practices of the consulates of the EU member states may be divided into four groups: «friendly», «neutral», «contrasting» and «problematic»


23Visa policy

«Contrasting» (ambivalent)visa practice

Germany, France, Belgium, Finland, Greece, Slovenia,

Portugal, the Netherlands «Problematic»

visa practice

«Neutral» visa practice

Latvia, Lithuania, Spain, Sweden,

Austria, Denmark

«Friendly» visa practice

Italy, Czech Republic, Great

Britain

Hungary, Poland,

Slovakia, Estonia

EUvisa

practicein Ukraine

Source: Europe without barriers, Independent Monitoring Findings 2012


24

Ukraine and the EU


25Ukraine and the EU

• In November 2010 Ukraine received the Action Plan on Visa Liberalization from the EU. The second block of elements of the Action plan is “Illegal Migration, Including Readmission”, which among others envisages following measures:– Adoption of a National Migration Management Strategy for

effective implementation of the legal framework for migration policy and an Action Plan;

– Establishment of a mechanism for the monitoring of migration flows, defining a regularly updated migration profile for Ukraine.

• Future visa liberalisation will make it easier for Ukrainians to travel to the EU countries and is expected to benefit Ukrainians

• In 2011 the National Action Plan on Visa Liberalization was approved

• The EU has high concerns to visa liberalization due to migration threats and large financial revenues from Consular fees


26Ukraine and the EU• Facilitation of movement of persons is also a separate

article in the Association Agreement• In March 2012 Ukraine and the EU initialed the

Association Agreement, which envisages DCFTA. It might be signed in November 2013 if Ukraine fulfills requirements

• The AA envisages somewhat higher labour mobility– The Parties shall take gradual steps towards a visa-free regime in

due course provided that the conditions for well-managed and secure mobility, set out in the two-phase Action Plan on Visa Liberalization presented at the EU-Ukraine Summit of 22 November 2010, are in place.

• Ukraine is likely to benefit from the AA in terms of higher welfare


27

Migration policy


28Migration policy• Ukraine’s migration regulatory framework improved recently:

– The Concept of Migration Policy of Ukraine was endorsed by the Presidential Decree

– The Government approved Resolution “On Creation of a Single National Database of Migration Flows Management”

– The State Migration Service was created in 2011 (however, it still criticized for low institutional capacities)

• Without wide vision and deep understanding of the migration situation in the country, migration legislation will not be effective

• Protection of rights of Ukrainian migrants remains inadequate • Effective system for collecting, processing and analyzing the

statistic and institutional data on migration of Ukrainians abroad is absent

• As labour migration is high, Ukrainian migration policy should make it legitimate and ensure protection (social and of human rights) of labour migrants as well as envisage policies for reintegration of returnees into society


29Migration policy• Two government bodies are responsible for development and

implementation of migration policy in Ukraine• The State Migration Service of Ukraine (SMSU), which is

subordinated to the Ministry of Internal Affairs– responsible for registration of residents and non-residents

(including refugees), citizenship issues handling, combating illegal migration and elaboration of migration policy

• The Ministry of Social Policy of Ukraine.– responsible for labour migration regulation– Ukraine is a party to 13 bilateral agreements on employment

and social protection of migrant workers (with Baltic States, Bulgaria, Spain, Libya, the Czech Republic, Mongolia, Portugal, Poland, Romania, Slovakia, Hungary and Czech Republic)

– The implementation of existing agreements on social protection is difficult due to lack of implementation mechanisms, financial resources and qualified personnel → the level of social protection of Ukraine’s labour migrants is very low


30

Experts about future migration of Ukrainians to the EU


31Future migration of Ukrainians to the EU

• The emigration flows might increase if economic and political uncertainty in Ukraine surges– Recently, the emigration mood of Ukrainians has expanded

• More young people consider opportunities to receive education abroad. As degrees received abroad are not directly transferable (the nostrifikation is required), this creates additional pressure for such individuals to look for a job abroad

• Visa regime with the EU is perceived to be a barrier for tourism rather than for work abroad


32Future migration of Ukrainians to the EU: visa liberalisation impact

• Experts (as revealed by several studies and interviews) predominantly do not expect significant increase in migration of Ukrainians to the EU after visa liberalization

• In particular, migration potential is limited – near 6% of Ukrainians intended to leave the country for more than half a year (3.7% defined the Schengen Area as their desired destination). Only 1.5% planned labour migration or permanent residency

• Number of legal migrants might increase due to legalisation of currently illegal migrants

• We can expect an jump in migration due to family reunion of formerly illegal migrants However, further research is needed to reveal more

thoroughly the impact of visa liberalisation on migration flows from Ukraine


33Literature (selected)

• Coupe Tom. Vakhitova Hanna. Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report: Ukraine, ENPI, February 15, 2013

• Documents Security and Migration Policy: Assessments and Recommendations of the International Working Groups for Ukraine, Policy Paper, Europe Without Barriers, 2011

• Implementation of Action Plan on Visa Liberalisation: a Case of Ukraine, Independent Monitoring Findings, Policy Paper, Europe Without Barriers, 2012

• Kipen V., Avksentyeva M., Migration Potential of Ukraine in the Context of Visa Regime with the EU

• Petrova Iryna. Social Impacts of Eurointegration of Ukraine: Labour Market. October 2012 (in Ukrainian)

• Poznyak Oleksiy. Social Impacts of Eurointegration of Ukraine: Migration. October 2012 (in Ukrainian)

• The EU Visa Policy in Ukraine: Independent Monitoring Findings 2012, Monitoring paper, Europe Without Barriers, 2012

• Ukraine: Extended Migration Profile, EC, 2011• Ukrstat presentations on the results of Migration survey - 2012, May 2013

Oleksandra [email protected]

Institute for Economic Research and Policy Consulting

Reytarska str. 8/5-А. Kyiv 01034Ukrainetel. (+38-044) 278-6360. 278-6342Fax (+38-044) [email protected]

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