38426 Public Disclosure Authorized MIGRATION AND REMITTANCES Public Disclosure Authorized Eastern Europe and the Public Disclosure Authorized Former Soviet Union Edited by Ali Mansoor Bryce Quillin Public Disclosure Authorized This report is part of a series undertaken by the Europe and Central Asia Region of the World Bank. The series covers the following countries: Albania Latvia Armenia Lithuania Azerbaijan Moldova Belarus Poland Bosnia and Herzegovina Romania Bulgaria Russian Federation Croatia Serbia and Montenegro Czech Republic Slovak Republic Estonia Slovenia FYR Macedonia Tajikistan Georgia Turkey Hungary Turkmenistan Kazakhstan Ukraine Kyrgyz Republic Uzbekistan MIGRATION AND REMITTANCES MIGRATION AND REMITTANCES Eastern Europe and the Former Soviet Union Edited by Ali Mansoor Bryce Quillin Europe and Central Asia Region 2006 ©2007 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 1 2 3 4 5 10 09 08 07 06 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not nec- essarily reflect the views of the Executive Directors of The World Bank or the governments they rep- resent. The World Bank does not guarantee the accuracy of the data included in this work. The bound- aries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorse- ment or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Recon- struction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Of- fice of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522- 2422; e-mail: [email protected]. ISBN-10: 0-8213-6233-X ISBN-13: 978-0-8213-6233-4 eISBN: 0-8213-6234-8 DOI: 10.1596/978-0-8213-6233-4 Cover photo: Karen Robinson ©Panos Pictures. Inc. Library of Congress Cataloging-in-Publication Data Mansoor, Ali M. Migration and remittances : Eastern Europe and the former Soviet Union / [Ali Mansoor, Bryce Quillin]. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8213-6233-4 (alk. paper) ISBN-10: 0-8213-6233-X (alk. paper) ISBN-13: 978-0-8213-6234-1 ISBN-10: 0-8213-6234-8 1. Migrant labor—Europe, Eastern. 2. Migrant labor—Former Soviet republics. 3. Migrant remittances—Europe, Eastern. 4. Migrant remittances—Former Soviet republics. I. Quillin, Bryce, 1976– II. World Bank. Europe and Central Asia Region. III. Title. HD5856.E852M36 2007 304.80947—dc22 Contents Foreword xi Acknowledgments xv Abbreviations and Glossary xvii Overview 1 Nature and Evolution of Migration, 1990–2006 3 Migrant Remittances 6 Determinants of Migration 8 Regulatory Framework for International Labor Migration 13 Methodology 19 The Report in Perspective 19 1. Overview of Migration Trends in Europe and Central Asia, 1990–2004 23 Problems with Measuring Migration in ECA 26 Migration and Population Change 30 Major Migration Flows in the ECA Region 32 Refugees and Internally Displaced Persons 37 Transit and Undocumented Migration in the ECA Region 41 Major Migration Partners of the ECA Countries 46 Future Migration Trends in the Region 50 v vi Contents 2. Migrants’ Remittances 57 Data 58 Impact of Remittances on Development 60 Economic Impact of Remittances 63 3. Determinants of Migration 75 Incentives for Migration: A Theoretical Perspective 77 Incentives for Migration: Empirical Evidence from Eastern Europe and the Former Soviet Union 79 Incentives for Migration: Lessons from Southern European Countries and Ireland 86 Simulating the Determinants of Migration 92 4. International Regulatory Framework 97 Current Regime 98 A Proposal for an Alternative Framework 107 Appendixes 1.1 Survey Methodology 113 1.2 Migration Statistics 115 2.1 Remittance Data 125 2.2 Estimations of the Impact of International Remittances on Macroeconomic Growth 127 3.1 Estimating the Determinants of Migration in ECA 139 3.2 Computable General Equilibrium Model of Migration 147 4.1 The Impact of Migrants and the Receiving Society: Integration Policies 157 4.2 Transitional Arrangement for the Free Movement of Workers from the New Member States 163 4.3 Undocumented Immigration and Vulnerabilities 167 4.4 Incentives for Criminality in Migration 173 4.5 Migrants, Their Families, and Communities “Left Behind” 177 4.6 Brain Drain in the ECA Region 181 Bibliography 191 Index 207 Contents vii Boxes 1 Possible Costs and Externalities of Illegal Immigration 16 2 Methodology 20 2.1 Estimating the Impact of Remittances on Macroeconomic Growth 68 3.1 Estimating the Determinants of Migration in ECA 83 3.2 Irish Migration Dynamics 89 3.3 Portuguese Migration Dynamics 90 4.1 Possible Costs and Externalities of Illegal Immigration 106 4.2 Social Externalities Generated by Migration 108 Figures 1 Remittances as a Portion of GDP in Eastern Europe and the Former Soviet Union, 2004 6 2 Percent Distribution of Remittances and Population by Location in 2002 9 3 Disparities in GDP per Capita in the CEE-CIS States, 1990–2002 10 4 Postwar Emigration from Southern Europe, 1960–88 12 5 Migrants’ Preferences for Short versus Long-Term Migration 18 1.1 Transition of the Migration System in the Europe and Central Asia Region 24 1.2 Migration in Top 10 Sending and Receiving Countries and by Region, 2003 25 1.3 Natural Increase (Decrease) and Net Migration in the ECA Region, 2000–03 31 1.4 Net Migration in Western ECA and the CIS 33 1.5 Largest Migration Flows Involving a CIS Country, 2000–03 36 1.6 Largest Migration Flows Involving a Western ECA Country, 2000–03 37 1.7 Main Displaced Populations from the Former Yugoslavia, December 1995 38 1.8 Main Displaced Population from the Former Soviet Union, Mid–1990s 39 1.9 Refugees and Internally Displaced Persons in the ECA Region, 1989–2003 39 viii Contents 1.10 Largest Numbers of Refugees, IDPs, and Others of Concern in the ECA Region, 2004 40 1.11 Russia, Net Migration by Country, 1989–2003 47 1.12 Major Migration Partners of the CIS Countries 48 1.13 Poland: Net Migration by Country, 1992–2003 50 1.14 Major Migration Partners of Selected Western ECA Countries 51 1.15 Population Size of Western Europe, Western ECA, and Turkey, 1950 to 2050 52 1.16 Population Size of the Northern and Southern FSU States, 1950 to 2050 54 1.17 Russia: Net Migration and Natural Increase, 1980–2015 55 2.1 Leading 20 Remittance-Receiving Countries in the World 58 2.2 Remittances as a Portion of GDP in Eastern Europe and the Former Soviet Union, 2004 59 2.3 Growth Rate of Remittances in ECA: 1995–98, 2001–04 60 2.4 Remittances as a Share of Exports in 2003 63 2.5 Expenditure Patterns from Remittances in Six ECA Countries 64 2.6 Remittances as Share of Total Household Expenditure in 2004 65 2.7 Distribution of Remittances by Location in 2002 70 2.8 Distribution of Population by Location in 2002 71 3.1 Nationality Composition of Migration to Russia, 1989 to 2003 80 3.2 Disparities in GDP per Capita in the CEE-CIS States, 1990–2002 81 3.3 Net Migration in Selected Immigration Countries in ECA, 1989–2003 85 3.4 Net Migration in Selected Emigration Countries in ECA, 1989–2003 85 3.5 Postwar Emigration in Southern Europe, 1960–88 87 3.6 Percentage Decrease in Total Migration Flows into the EU Owing to Improvements in Quality of Life 93 Contents ix 3.7 Percentage Increase in Migration Outflows from EU-15 to ECA Countries Owing to Improvement in Quality of Life in ECA 94 4.1 Migrants’ Preferences for Short- versus Long-Term Migration 110 4.2 Percentage Decrease in Illegal Migration into the EU Owing to Increase in Penalty for Hiring Illegally 111 Tables 1.1 Population by Place of Birth in the USSR, 1989 29 1.2 Migration Flows Involving ECA Countries, 2000–03 35 1.2a Total Migration Flows Involving ECA Countries and Major Partners, 2000–03 35 1.2b Percent of Total Emigration 35 1.2c Percent of Total Immigration 35 1.3 Estimated Irregular Migrants 45 2.1 Remittance Flows by Subregion, 2003 61 2.2 Annual Consumption and Remittances per Capita by Quintile 72 3.1 Motivations for Migration 78 4.1 Regional Composition of Bilateral Agreements 100 4.2 Geographical Distribution of Bilateral Migration Agreements between CEEC and EU-15 101 4.3 Bilateral Migration Agreements between the EU and CEECs by Country and Type 102 4.4 Number of Registered Foreigners and Estimated Number of Aliens Living Irregularly in Some CIS Countries, 2000 104 Foreword The countries of Eastern Europe and the former Soviet Union have been reintegrating into the world economy following the dissolution of the Soviet economic network. The Europe and Central Asia Region of the World Bank has undertaken a multivolume analysis of the processes that have influenced this transition period.