Migration and Remittances: Eastern Europe and the Former Soviet Union
Lead Authors: Ali Mansoor and Bryce Quillin
January 2007
Migration in Eastern Europe and Central Asia is unique and significant: ECA accounts for one-third of all developing country emigration, and Russia is the second largest immigration country worldwide. Migrants’ remittances, as a portion of gross domestic product, are also large by world standards in many of the net emigration countries of the region. Economic motivations and expectations regarding improvements in the quality of life at home currently drive short-term, long-term, and circular migration flows within ECA and between ECA and Western Europe. This report traces the trends of international migration and remittances in the region since the transition and their determinants. The report also looks at international migration policy in the region and how current bilateral migration schemes can be improved.
1. Overview of Migration Trends in Europe and Central Asia, 1990-2004
This chapter highlights the main migration trends in Europe and Central Asia (ECA) over the past 15 years, with a focus on international movements among countries. Migration is both large by global standards and unique in that the region is both a major receiver and sender of migrants. Moreover, many migration movements since 1990 are unique , given the recent economic transition, political and social liberalization, and the breakup of three federal states. Economic factors such as differences in per capita income drive migration patterns among the post-Soviet states in the short term, but demographic factors will play an important role in the longer term.
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2. Migrants’ Remittances
Remittances are an important source of income for people in the region. For many ECA countries, remittances are the second most important source of external financing after foreign direct investment and in many poor countries they are the largest. An examination of the economic impact of remittances reveals a positive impact on long-term growth. The links between remittances and poverty, on the other hand, are mixed.
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3. Determinants of Migration
This chapter examines the motivations driving migration in ECA. First, the authors lay out the theoretical perspective and raise the possibility that expectations regarding improvements in the quality of life at home, in addition to wage differentials, may drive migration. The next sections explain the migration “hump” that characterizes movements from Southern Europe and other regions. The authors delve into the role that migrants’ expectations—resulting from economic growth and policy reforms at home—play in shaping such hump patterns. Finally, an economic model shows that improvements in the sending countries’ policies and institutions can slow out-migration and perhaps enhance the incentives for circular migration.
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4. International Regulatory Framework
This chapter mainly reviews the existing framework for international labor migration in Eastern Europe and the FSU. It documents the bilateral migration agreements among ECA countries and between them and the EU-15 countries. The chapter also proposes that bilateral migration agreements could be modified to encourage legal migration by unskilled workers.
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