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Mintchev, Boshnakov International Migration and Remittances in the Balkan Area – the Case of Bulgaria Vesselin Mintchev, Bulgarian Academy of Sciences “The Integration of European Labor Markets” Oesterreichische Nationalbank November 17 and 18, 2008 Contents • The Balkan Area – Information on Different Balkan Countries • Return Migration and Remittances – Empirical Evidences for Bulgaria 2 The Balkan Area – Information on Different Balkan Countries Balkan Area Information on Different Balkan Countries • Albania • Bosnia and Herzegovina • Bulgaria •Croatia • Macedonia (FYROM) •Romania • Serbia / Montenegro 3 GDP Growth Rates (%) of Balkan Countries (1) 12 7 2 -3 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -8 -13 -18 -23 -28 -33 Albania Bulgaria Croatia FYROM Romania 4 GDP Growth Rates (%) of Balkan Countries (2) 10 5 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 -5 -10 -15 -20 Albania BiH Bulgaria Croatia FYROM Romania Serbia & MN 5 Net migration rate (per 1000) vs. Population (mln) of some Balkan countries, 2000-2007 30 25 20 15 BiH 10 CR 5 RO 0 0MK 5 10 15 20 25 -5 Millions AL BG -10 -15 6 Net migration rate (per 1000) vs. GDP per capita (thousand USD in PPP) of some Balkan countries, 2000-2007 15 10 Bosnia and Herzegovina Croatia 5 0 2 4 6 8 10 12 14 16 Romania -5 Albania Bulgaria -10 -15 7 Worker remittances (USD, per 1000 population) vs. GDP per capita (USD in PPP), 2005 400 Albania 350 Bosnia and Herzegovina 300 250 Croatia 200 Romania 150 Bulgaria 100 50 0 8 468101214Thousands Return Migration and Remittances – Empirical Evidences for Bulgaria • Compensations of Employees in the BoP • Data from 2005 Sample Survey (GDN-WIIW) • Stay or Leave Again? 9 Compensations of Employees in the BoP 2000 2001 2002 2003 2004 2005 2006 2007 Current transfers, credit (mln. EUR) 386,2 674 676,9 762,5 904,1 997,4 845,8 908,6 Compensation of employees, credit 63,2 476,6 766,8 913,7 1035,6 925,6 1023,4 1229,4 as a % of GDP 0,5% 3,1% 4,6% 5,2% 5,2% 4,2% 4,1% 4,3% as a % of exports 1,2% 8,3% 12,6% 13,7% 13,0% 9,8% 8,5% 9,1% as a % of imports 1,0% 6,4% 9,7% 10,0% 9,5% 6,7% 5,8% 5,9% as a % of the trade balance -4,9% -26,8% -40,8% -37,7% -35,1% -21,0% -18,4% -16,8% as a % of FDI 5,7% 52,8% 78,2% 49,4% 37,9% 29,4% 17,0% 18,9% GDP per capita (EUR) 1674,0 1919,0 2101,0 2263,0 2551,0 2827,2 3278,1 3772,7 10 Return Migration and Remittances: Bulgarian Case 2 Years before the EU Integration (Data from 2005 Sample Survey – GDN-WIIW) • Representative sample survey among Bulgarian HHs, with sample size of 1052 HHs • Two-stage cluster sampling design; in each selected unit 20 HHs in urban and 15 HHs in the rural clusters were interviewed face-to-face, Nov.2005 • The main goals – estimation of return migration “parameters”: HHs “involved” in international migration; amount of remittances; remittances usage • Indirect approach to remittances estimation, based on the reporting of: (1) the spending in the host country (2) the share of expenses in income 11 Some core sample estimates No current migrant At least 1 CM Total No return 84.8% 3.3% 88.1% migrant At least 1 RM 9.2% 2.7% 11.9% Total 94.0% 6.0% 100.0% Assumed number of Bulgarian HHs, at November 2005 2,900,000 Estimated number of return migrant HHs (11.9%) 345,100 Estimated number of return/current migrant HHs (15.2%) 440,800 Average number of return migrants, per 1000 HHs 143 12 Distribution of households by remittances receipt “status”/%/ Current migrant in the HH: Total Households: No Yes, at least 1 not received remittances No return migrant 84.0 1.3 85.3 At least 1 return migrant 2.1 0.6 2.7 Total: 86.1 1.9 88.0 received remittances No return migrant 0.9 2.1 3.0 At least 1 return migrant 6.9 2.1 9.0 Total: 7.8 4.2 12.0 13 Sample estimates of current expenses during the stay in the host country Approximate average monthly amount of current expenses during the stay abroad EUR Housing FoodTravel Social Other contacts No such expenses 29.0 22.1 25.7 30.5 55.0 Up to 50 20.5 12.4 38.8 33.1 9.1 50 – 100 16.4 14.6 16.4 15.0 16.0 100 – 150 9.4 22.7 6.7 10.1 12.5 150 – 200 9.5 14.0 7.6 7.6 2.2 Over 200 15.114.2 4.9 3.7 5.3 Total: 100.0 100.0 100.0 100.0 100.0 Average (EUR): 86.8 107.3 59.2 58.4 49.4 Average monthly expense, per return migrant (EUR) 361.1 14 Sample estimates of expenses and net earnings Share % Please, estimate approximately what share of your monthly earnings you had to spend Up to 1/4 50.4 during your stay abroad? About 1/3 24.8 Share of expenses in gross 34% earnings received abroad About 1/2 16.2 Gross earnings during the stay, 16,575 per return migrant (EUR) About 2/3 3.1 Gross earnings, per return 1,063 migrant, monthly average (EUR) About 3/4 1.1 Net earnings (savings), per return 702 migrant, monthly average (EUR) Almost all 4.4 Total: 100.0 15 Main directions of remittances usage - 1 Share of households acquired properties / durable goods during 2001-2005 period 80% 70% Housing 60% estate 50% Motor vehicle 40% Land 30% 20% Household appliances 10% 0% Not received Received Total sample 16 Distribution of HHs by running own businesses Is there a member of the Receipt of funds from abroad household that is currently running a private business? No Yes Total No 91.7 80.7 90.4 Yes 8.3 19.3 9.6 Total 100.0 100.0 100.0 17 Main directions of remittances usage - 2 (SME development) If there are funds used for own Among them, for: Share of business development, what Investment Working responses Both was the main purpose? capital capital Establishment of a new firm 6,8% 48,4% 26,7% 25,0% Supporting an existing firm 7,5% 15,1% 54,3% 30,6% Total: 14,3% 30,9% 41,2% 28,0% Sector of the main activity of the firm: Agriculture 2,7% Trade 25,7% Construction 3,5% Manufacturing 2,1% Transport 38,3% Services 27,7% 18 Factors of the satisfaction from the job abroad - binary logistic regression’s results Independent variables B Exp (B) Gender -0,315 0,730 Age 0,062 1,064 Duration of stay 0,038 1,039 Job arrangement prior to departure -0,697 0,498 Employment in agriculture 0,077 1,080 Employment in services 1,084 2,956 No contact with labor offices 0,186 1,183 Full time job 0,548 1,729 Qualified job 1,013 2,754 Job under official contracts 0,895 2,447 Monthly net earnings -0,000003 1,000 % of correctly predicted cases 79,9 Cox & Snell R sq 0,252 No of observations 139 19 Likelihood to re-migrate What is the desired How likely is for you to go abroad again? Total length of the intended stay Very Somewhat Little Not abroad? likely likely likely likely 37.7 21.0 17.9 23.4 100.0 Few months 39.3 32.4 55.3 – 41.5 About 1 year 21.3 41.2 37.9 – 30.1 Few years 26.2 20.6 3.4 – 19.5 Emigration for good 13.2 5.8 3.4 – 8.9 Total: 100.0 100.0 100.0 100.0 100.0 20 Factors of the likelihood to re-migrate - binary logistic regression’s results Independent variables B Exp (B) Gender -0,607 0,545 Age -0,038 0,963 Education (higher) -1,263 0,283 Family status -1,830 0,160 Number of children 0,156 1,169 Household size 0,313 1,368 Duration of stay 0,001 1,001 Satisfaction 1,355 3,802 Monthly net earnings, euro 0,001 1,001 Availability of relatives abroad 1,176 3,242 % of correctly predicted cases 73,8 Cox & Snell R sq 0,266 No of observations 145 21 International vs National Return Migration (sample estimates - UNFPA Survey, 2007 ) RM from abroad RM from other settlement in the country Share of the household with return migrant 10,1% 4,2% Number of household with return migrant 294 345 121 518 Number of return migrants 384 494 167 497 Average monthly received amount, euro 810,3 225,6 Average duration of the stay, months 13,8 27,7 Average share of the current expenses 45,4% 71,5% Average share of the saved income 54,6% 28,5% Average annual amount of saving / 468 139 327 59 689 000 transferred income, euro Average annual amount of saving / 1590,4 491,3 transferred income per household with return migrants, euro 22 Concluding Remarks • Substantial differences • Return or circular between the Balkan migration in Bulgaria… countries • Policy issues • Fragmentarization or regional cooperation and Elaboration of framework EU integration… documents • Stable but limited as Strategy of Migration and absolute figures out- Integration, MLSP migration flows from the Balkans 23 Thank you! Vesselin Mintchev Institute of Economics at the BAS [email protected] 24 Stay or Leave Again? New Evidence for Bulgarian Return Migration * Vesselin Mintchev** Venelin Boshnakov*** Abstract The paper focuses on the “stay or leave again” dilemma of Bulgarian return migrants.
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