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ECONOMICS OF LABOR MIGRATION FROM ARMENIA: A CONCEPTUAL STUDY. Aleksandr V. Gevorkyan New School for Social Research and AIPRG Karina Mashuryan City University of New York Arkady Gevorkyan St. John’s University Prepared for the AIPRG Fourth Annual International Conference - PowerPoint PPT Presentation
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ECONOMICS OF LABOR MIGRATION ECONOMICS OF LABOR MIGRATION FROM ARMENIA: A CONCEPTUAL STUDYFROM ARMENIA: A CONCEPTUAL STUDY
Aleksandr V. GevorkyanAleksandr V. GevorkyanNew School for Social Research and AIPRGNew School for Social Research and AIPRG Karina MashuryanKarina MashuryanCity University of New YorkCity University of New York Arkady GevorkyanArkady GevorkyanSt. John’s UniversitySt. John’s University
Prepared for the AIPRG Fourth Annual International Conference Prepared for the AIPRG Fourth Annual International Conference Armenia: Public Sector’s Role in Influencing Economic OutcomesArmenia: Public Sector’s Role in Influencing Economic Outcomes
January 14-15, 2006January 14-15, 2006World BankWorld Bank
Washington, DCWashington, DC
OverviewOverview
InspirationInspirationTemporary Labor MigrationTemporary Labor MigrationArmenian Migrant: Profile…Armenian Migrant: Profile…Legal BasisLegal BasisMacroeconomic FrameworkMacroeconomic FrameworkThe ModelThe ModelConclusionConclusionQ&AQ&A
International Regulated LM International Regulated LM SchemesSchemes
The PhilippinesThe Philippines Philippines Overseas Employment AdministrationPhilippines Overseas Employment Administration
Sri LankaSri Lanka Sri Lanka Bureau of Foreign EmploymentSri Lanka Bureau of Foreign Employment
PakistanPakistan Bureau of Emigration & Overseas EmploymentBureau of Emigration & Overseas Employment
Population Outflow: General Population Outflow: General PicturePicture
Waves of MigrationWaves of MigrationPopulation Movement in NumbersPopulation Movement in Numbers Decrease by 2,000 persons a year;Decrease by 2,000 persons a year; Armenian nationals going to Russia: 2%-4.5% of both Armenian nationals going to Russia: 2%-4.5% of both
the total number of migrants into Russia and that of the total number of migrants into Russia and that of migrants from CIS, since 1997; migrants from CIS, since 1997;
The unemployed: steady 5-8% of labor resources The unemployed: steady 5-8% of labor resources (two thirds of the total population in 2003);(two thirds of the total population in 2003);
Economically active population: down by 13.2% for Economically active population: down by 13.2% for the last decade - 61.4% of the number of labor the last decade - 61.4% of the number of labor resources in 2003. resources in 2003.
Quis EstQuis Est Labor Migrant? Labor Migrant?
According to Recent Surveys*…According to Recent Surveys*… Russian Federation as the primary destination: Moscow, St. Petersburg, Russian Federation as the primary destination: Moscow, St. Petersburg,
Tumen, Rostov-na-Donu;Tumen, Rostov-na-Donu; Employment status and professional backgrounds of future migrants: Employment status and professional backgrounds of future migrants:
- half of labor migrants were involved in permanent or - half of labor migrants were involved in permanent or occasional occasional activity before their first trip abroad; activity before their first trip abroad;
- majority of the employed migrants were skilled workers or - majority of the employed migrants were skilled workers or white white collars, 26.5% were self-employed; collars, 26.5% were self-employed;
To Russia: 40.3% degreed specialists, 23.1% workers and 35.3% have To Russia: 40.3% degreed specialists, 23.1% workers and 35.3% have no profession;no profession;
Share of Armenian workers in Russia has remained at the same level in Share of Armenian workers in Russia has remained at the same level in the last two years;** the last two years;**
The absolute number of Armenian nationals employed in Russia has The absolute number of Armenian nationals employed in Russia has grown almost twofold in the last two years;**grown almost twofold in the last two years;**
The total official number of labor migrants in Russia has grown in 2005, The total official number of labor migrants in Russia has grown in 2005, comprising 19,5 thousand persons or 8.3% of the total amount of labor comprising 19,5 thousand persons or 8.3% of the total amount of labor from the CIS.** from the CIS.**
* AST, “Labor Migration from Armenia, 2002-2005”* AST, “Labor Migration from Armenia, 2002-2005”
** Federation Migration Service of Russian Federation** Federation Migration Service of Russian Federation
Looking for Income ElsewhereLooking for Income Elsewhere
Why Do They Migrate?Why Do They Migrate? lack of vacancies lack of vacancies family reunionfamily reunion unhealthy moral environmentunhealthy moral environment lack of work by specialtylack of work by specialty impossibility to earn enough funds to provide for their impossibility to earn enough funds to provide for their
subsistencesubsistence inability to earn a decent living inability to earn a decent living geopolitically unstable situation geopolitically unstable situation difficulties to carry out entrepreneurship difficulties to carry out entrepreneurship gender differences: while the number of females leaving the gender differences: while the number of females leaving the
country for the lack of work is half as much as the same number country for the lack of work is half as much as the same number of males, a roughly six-fold number of females tend to leave for of males, a roughly six-fold number of females tend to leave for the sake of reunification with their families.the sake of reunification with their families.
Russia: Something to ConsiderRussia: Something to Consider
Russia’s declining population Russia’s declining population
Russia’s target of doubling its GDP over Russia’s target of doubling its GDP over the next ten yearsthe next ten years
Migrant laborMigrant labor as a solutionas a solution
Controversial effectsControversial effects
Controlled and legalControlled and legal
Law and Order: Is Foreign Labor Law and Order: Is Foreign Labor Welcome in Russia?Welcome in Russia?
2002 Federal Law on Migration: system of 2002 Federal Law on Migration: system of quotasquotas
Russian Government Russian Government →→ Federal Migration Federal Migration ServiceService
Regulations allowing of legal status?Regulations allowing of legal status?
From limitations to a guest-worker From limitations to a guest-worker program: time for interstate cooperation?program: time for interstate cooperation?
RoA: Is Armenian Labor a RoA: Is Armenian Labor a Marketable Product?Marketable Product?
Draft law on LMDraft law on LM
Core instrument in need of adjustmentCore instrument in need of adjustment Licensing procedure Licensing procedure Limited spanLimited span Special case: foreign employersSpecial case: foreign employers Financial burden for labor migrant in legal statusFinancial burden for labor migrant in legal status
Is Armenia ready to protect its labor migrants?Is Armenia ready to protect its labor migrants?
Bilateral Legal Bilateral Legal Mechanisms: the GivenMechanisms: the Given
LM agreements within CIS: different LM agreements within CIS: different states, common goalsstates, common goals
Certificates, social benefits and equal Certificates, social benefits and equal treatmenttreatment
Base for new initiatives Base for new initiatives
How to Read Migration Effects?How to Read Migration Effects?
Economic Growth?Economic Growth? Persistent UnemploymentPersistent Unemployment
Possible Macroeconomic FrameworkPossible Macroeconomic Framework Labor Market EffectsLabor Market Effects Wage ConsiderationsWage Considerations Remittances and…Remittances and… Pan-Armenian BankPan-Armenian Bank
Need for Accurate DataNeed for Accurate Data
Labor MarketLabor Market
Does theory really work?Does theory really work?
Ambiguous effectsAmbiguous effects
Waiting out: Waiting out: Internal and International Labor Internal and International Labor MigrationMigration
Armenian Labor Force: Armenian Labor Force: Quality vs. QuantityQuality vs. Quantity
Skills transfer / Rising ProfessionalismSkills transfer / Rising Professionalism
Side effects: healthcare, education…Side effects: healthcare, education…
Wage ConsiderationsWage Considerations
Wage Differentials: driving force of migration?Wage Differentials: driving force of migration? Evidence from GermanyEvidence from Germany
Are wages going up or down?Are wages going up or down? Speculation / need consistent and accurate dataSpeculation / need consistent and accurate data
Skills effectSkills effect Experience of othersExperience of others
Cross-sector implicationsCross-sector implications
RemittancesRemittances
Controversial SubjectControversial Subject Crucial financial flows into developing worldCrucial financial flows into developing world True contribution to growth?True contribution to growth?
$1 billion in 2003 in Armenia!$1 billion in 2003 in Armenia!
Worth only as long as there is a recipient in the Worth only as long as there is a recipient in the countrycountry
Consider: Microfinance/Pan-Armenian BankConsider: Microfinance/Pan-Armenian Bank To support local growth and utilize the capacity of To support local growth and utilize the capacity of
returning labor migrants as well as attract people back returning labor migrants as well as attract people back to Armeniato Armenia
Pan-Armenian Bank Pan-Armenian Bank
Formal money transfer vehicleFormal money transfer vehicle
Channel funds into Channel funds into SMEs in ArmeniaSMEs in Armenia Infrastructure projectsInfrastructure projects EducationEducation
Provide credit to migrants’ familiesProvide credit to migrants’ families
Will work in a regulated environmentWill work in a regulated environment
Temporary Labor Migration Regime in Temporary Labor Migration Regime in Armenia: Concept ModelArmenia: Concept Model
Policy Regimes – What can work in Armenia?Policy Regimes – What can work in Armenia? Laissez-faireLaissez-faire RegulatedRegulated State-managedState-managed State monopolyState monopoly
Government policyGovernment policy
Migrants’ benefitsMigrants’ benefits
Legal baseLegal base
The Model [First Steps]The Model [First Steps]
Recognize Diaspora’s pivotal roleRecognize Diaspora’s pivotal role
Diverse and influential Russian Armenian Diverse and influential Russian Armenian DiasporaDiaspora Caveat: ongoing institutionalization Caveat: ongoing institutionalization need of the need of the
Western Diaspora and GoA supportWestern Diaspora and GoA support
The Model and How it WorksThe Model and How it Works
The main agents:The main agents: Labor Migrant Labor Migrant Government of ArmeniaGovernment of Armenia Government of Russian FederationGovernment of Russian Federation RoA: Foreign Employment AgencyRoA: Foreign Employment Agency RoA: Consulate Representation in RussiaRoA: Consulate Representation in Russia RF: Armenian Community GroupRF: Armenian Community Group RF: Employer in RussiaRF: Employer in Russia
Proposed Temporary Labor Migration Model: Proposed Temporary Labor Migration Model: Armenia and RussiaArmenia and Russia
Foreign Employment Agency
Armenian Community Group in Russia
Local Consulate of the Republic of Armenia in Russia
Russian authorities [municipal, regional and federal levels]
Employer in Russia
Government of the Republic of Armenia
Migrant in Armenia
In the end…In the end…
Urgent need to address the issue and introduce Urgent need to address the issue and introduce regulation: regulation:
Outflow of Armenia’s economically active populationOutflow of Armenia’s economically active population
Analyze economic effects in the triad: Analyze economic effects in the triad: Labor Market / Wages / RemittancesLabor Market / Wages / Remittances
Implement Pan-Armenian Bank:Implement Pan-Armenian Bank: Public sector expenditurePublic sector expenditure
Need solid bilateral labor migration legal baseNeed solid bilateral labor migration legal baseInstitute a working LM Model to control and mitigate the Institute a working LM Model to control and mitigate the negative effects of out-migrationnegative effects of out-migrationAny labor migration scheme is inefficient and prone to Any labor migration scheme is inefficient and prone to conflict without accurate and consistent data and its conflict without accurate and consistent data and its analysisanalysis
Thank you!Thank you!