Transition Report 2013 Stuck in transition?

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Facts at a glance

The proportion of the population aged 25 and over in the transition region that had completed at least secondary education in 1990 (compared with 35% in advanced economies).

ALMOST 75% of migrants from countries in the transition region emigrated to other countries in the region.

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IN 14 transition countries, having an inadequately educated workforce was among the top three (out of 14) business environment obstacles.

10 The number of universities in the transition region among the top 500 universities in the 2013 Shanghai ARWU league table.

Human capital

Brain drain or brain gain?

Building high-quality human capital stock depends not only on the high quality of education, but also on a country's ability to attract and retain skilled people. This section focuses on emigration and brain drain, using data on international bilateral migration for Organisation for Economic Co-operation and Development (OECD) and non-OECD countries of origin and destination, based on census data for 100 countries in 2000 and 60 countries in 1990.1 An aggregated group-level breakdown is presented in Table 4.1.

Table 4.1

Share of emigration stock by origin, destination and skill level: 1990 and 2000

    2000 1990
Origin Destination Total Low skill High skill Total Low skill High skill
Transition region Transition region 72.3 75.3 64.1 73.6 76.6 57.4
Transition region Turkey 1.9 2.1 1.2 2.1 2.2 1.3
Transition region SEMED 0 0 0.1 0 0 0
Transition region Advanced economies 21.7 19.2 28.9 20.7 17.8 36.9
Transition region Other 4.1 3.4 5.8 3.6 3.5 4.4
Turkey Transition region 1.4 1.3 2.9 0.9 0.8 2
Turkey SEMED 0.1 0.1 0.1 0 0 0
Turkey Advanced economies 93.3 93.7 89.3 92.2 92.4 90.5
Turkey Other 5.2 4.9 7.7 6.9 6.8 7.4
SEMED Transition region 0.2 0.1 0.5 0.1 0.1 0.3
SEMED Turkey 0 0 0.1 0 0 0.1
SEMED SEMED 2.6 2.4 3.5 2.9 2.6 4.2
SEMED Advanced economies 43 40.8 53.2 40.2 37.9 54
SEMED Other 54.2 56.7 42.7 56.8 59.4 41.4
Advanced economies Transition region 2.6 3.1 1.8 2.4 2.9 1.2
Advanced economies Turkey 0.8 0.9 0.7 0.4 0.5 0.2
Advanced economies SEMED 0.3 0.3 0.3 0.2 0.2 0.1
Advanced economies Advanced economies 84.9 83 88.3 87.4 85.9 91.2
Advanced economies Other 11.4 12.9 8.8 9.5 10.4 7.2
Other Transition countries 0.5 0.5 0.6 0.2 0.2 0.4
Other Turkey 0 0 0.1 0 0 0.1
Other SEMED 0.5 0.6 0.5 0.5 0.5 0.3
Other Advanced economies 50.5 41.1 81.5 38.4 30 79
Other Other 48.4 57.9 17.4 60.8 69.3 20.2

Source: Author’s calculations based on Artuç et al. (2013).
Note: As a percentage of total stock of emigration from the region of origin for the year shown.

Almost 75 per cent of migrants from countries in the transition region emigrated to other countries in the transition region. Migration from countries that were formerly part of the Soviet Union – primarily to Russia, but also to Kazakhstan and Ukraine – played a major role, alongside migration between former Yugoslav countries (partly owing to the wars of the 1990s). The percentage of migration within the former Soviet Union and the former Yugoslavia was lower for high-skilled emigrants, indicating that more developed transition countries became a more attractive destination for high-skilled emigrants from less developed countries.

The United States, Germany, Canada and Australia were among the top advanced economy destinations for emigrants from the transition region in both 1990 and 2000. There are also some interesting patterns involving neighbouring countries. The majority of Albanian emigrants moved to Greece and Italy, while Bulgarian emigrants favoured Turkey. Finland had the second largest stock of Estonian emigrants (after Russia), while Poland was the most popular choice for emigrants from Lithuania. Slovak emigrants mainly chose the Czech Republic. In virtually all countries in the transition region, emigration to a neighbouring country tended to be more popular for the less educated than for their high-skilled counterparts.2

The majority of emigrants from Turkey moved to Germany and the United States. Germany was particularly attractive for low-skilled workers. The top destinations for emigrants from Egypt were Saudi Arabia and Libya, while Jordanians opted for Palestine, Kuwait and Saudi Arabia. Moroccans favoured France, Israel and Spain, and Tunisians chose France, Israel and Libya. The differences in terms of destinations between less and more educated emigrants were more pronounced in the SEMED region than in transition countries, particularly for emigration to the United States and Canada.

The migration patterns shown in Table 4.1 are important because destination countries can have a substantial impact on migrants' countries of origin through remittances, return migration and the creation of trade and business networks.3 That said, the first-order effect of emigration on the human capital stock of the country of origin is the loss of skilled labour – the classic brain drain problem.

Chart 4.6 illustrates this loss by showing high-skilled net emigration stock rates (net emigration as a share of the country’s native labour force) for transition and SEMED countries. All countries experienced emigration by their high-skilled workers, but also received high-skilled immigrants from other countries. Several former Yugoslav countries suffered the worst brain drain, owing to the wars in the early 1990s.

In most countries net emigration rates were higher in 2000 than they had been in 1990. Estonia seems to have benefited the most. Its gross emigration rate was relatively high in both 1990 and 2000, but immigrants to Estonia were also highly skilled. Latvia, Kazakhstan, Moldova and Russia also appear to have been net “winners” in recent years.

While complete data are not yet available, it is likely that brain drain accelerated after 2000 with the accession to the EU of eight transition countries in 2004, followed by Bulgaria and Romania in 2007 and Croatia in 2013. There is some evidence that substantial numbers of high-skilled workers have emigrated from some of these countries to incumbent EU countries. This trend may have been reinforced by the global economic crisis seen since 2008, as social and political problems associated with recessions (such as poverty, unemployment, discrimination and repression) tend to increase emigration, particularly emigration by high-skilled workers.4

Chart 4.6
  Transition region and Turkey   SEMED

Source: Source: Authors’ calculations based on Artuç et al. (2013).
Note: The high-skilled net emigration rate is calculated as net emigration from the country (that is to say, the stock of the country’s emigrants abroad minus the stock of foreign-born immigrants in the country) as a percentage of the country’s native labour force.

  1. See Artuç et al. (2013). [back]
  2. See Artuç et al. (2013) and Docquier and Rapoport (2012). The exceptions in 2000 were migrants moving from Bosnia and Herzegovina to Serbia and Montenegro, from Georgia to Armenia, from Turkmenistan to Kazakhstan, from Poland to Germany, from Moldova to Romania and from Russia to Kazakhstan, but the differences were only small. [back]
  3. See Docquier and Rapoport (2012) and Burchardi and Hassan (2013). [back]
  4. See Docquier and Rapoport (2012). [back]