Ukrainian Emigration to the EU: Labour Market Perspective

1. Ukrainian Emigration to the EU:Labour Market Perspective Oleksandra Betliy Warsaw, June 11, 2013

2. Content • 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 3

4. Ukraine 4 Population: 45.6 millions as January 1, 2012 51.9 millions as January 1, 1991 Urban population: 69% of total Share of children (0-14 years): 14% of total in 2012 21% of total in 1991 Share of people older than 65: 15% of total in 2012 12% of total in 1991 Life expectancy at birth: 71.0 years including: females 75.9 years males 66.0 years

5. Economic situation 5 Major shock: transformation from centrally planned to market economy after the collapse of the USSR Source: Ukrstat

6. Unemployment patterns 6 Source: Ukrstat

7. Coping mechanisms for households 7 • 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

9. Migration 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

10. Migration profile of Ukraine Origin of labour migrants Source: Ukrstat survey

11. Migration profile of Ukraine Source: Ukrstat survey

12. Migration 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 Source: Ukrstat survey

13. Migration profile of Ukraine:destination countries 13 Source: Ukrstat survey

14. Migration profile of Ukraine:sector of work 14 Source: Ukrstat survey

15. Migration profile of Ukraine 15 Source: Ukrstat survey

16. Migration 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) 16

17. Migration profile of Ukraine 17 Source: Ukrstat survey

18. Migration 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 18

19. Migration profile of Ukraine 19

20. Migration profile of Ukraine 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 20

21. Visa policy 21

22. Visa 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» 22

23. Visa policy Hungary, Poland, Slovakia, Estonia Latvia, Lithuania, Spain, Sweden, Austria, Denmark «Neutral» visa practice «Friendly» visa practice EU visa practice in Ukraine Germany, France, Belgium, Finland, Greece, Slovenia, Portugal, the Netherlands Italy, Czech Republic, Great Britain «Problematic» visa practice «Contrasting» (ambivalent) visa practice 23 Source: Europe without barriers, Independent Monitoring Findings 2012

24. Ukraine and the EU 24

25. Ukraine 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 25

26. Ukraine 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 26

27. Migration policy 27

28. Migration 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 28

29. Migration 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 29

30. Experts about future migration of Ukrainians to the EU 30

31. Future 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 31

32. Future 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 32

33. Literature (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

34. Contacts Oleksandra Betliy betliy@ier.kiev.ua Institute for Economic Research and Policy Consulting Reytarska str. 8/5-А. Kyiv 01034 Ukraine tel. (+38-044) 278-6360. 278-6342 Fax (+38-044) 278-6336 www.ier.com.ua institute@ier.kiev.ua