Migration Flows and Economic Sustainability In The Baltics (Edward Hugh)

Economics and demography

Migration Flows and Economic Sustainability In The Baltics

by Edward HughHere’s the third in the series of paper abstracts submitted to the Bologna conference in 2007 and which weren’t considered sufficiently interesting to be selected for presentation. This time the topic is migration and the Baltics, and the authors are Aapo Markkenen and Claus Vistesen. (for the two previous abstracts, and more about what this is all about, see here, and here). Evidently the subject is still highly topical. Only last Friday the Wall Street Journal had an article of the growing problem of human capital exodus in Greece. It is very important that people understand that when it comes to economic processes, no decision is ever completely free. There are always on-costs of some kind or another. In this case, a failure to act vigourously enough to restore competitiveness simply means that employment creation becomes far too slow, and people leave. This has the consequence that the population ages more rapidly, and that a return to economic growth is even slower. So more people enter despair and leave, and so on. Well, now for the abstract, and note the last paragraph:

Finally it will be argued that the directional and value component which is implicit in the current migration flows is quite simply unsustainable. Unless the Baltic States address the underlying issues of low fertility in the context of rapid ageing and to some extent reverse the ‘brain flight’ which has been so far associated with this, then absence of a sufficient supply of adequately qualified labour will in the space of a decade or so lead to a significant slowdown in the steady sectoral transition in economic activity and place a break on employment expansion in such a way that the economic growth process will either stagnate or even enter decline.

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