Overqualified and over there
Intensified labor mobility, spurred on by the EU's 2004 enlargement, is benefiting the economies of the 'old' EU members, but newcomers such as Poland should manage their labor outflows more actively, according to a recent World Bank EU8 Quarterly Economic Report.
"These flows have been mainly good for the receiving countries. New workers have supplemented rather than replaced domestic workers and they have helped to sustain low inflation and high productivity growth," said Thomas Laursen, lead economist with the World Bank and the chief author of the report.
"There were scattered cases of wage dumping. Unfortunately these tend to make the headlines, but the problem is not a significant one. Another concern was that people from the East would want to take advantage of the better benefits system, but it didn't happen," Laursen added.
Among the new EU members, Poland is the clear leader when it comes to its diaspora - more than a million of its citizens have emigrated in search of work since enlargement. Ireland and the UK, who opened their markets fully for the new member states' labor force, have become the favorite destinations for Polish migrants, absorbing 100,000 and 264,000 workers from Poland, respectively. Laursen warns that such an intensive outflow of labor is dangerous for the economies of the new member states.
"The 'sending' countries are experiencing labor-force shortages in different sectors, such as healthcare or construction, as well as pressure to raise wages. Lithuania may have lost up to 10 percent of its labor force over the last couple of years. The problem is especially acute in the Baltics, where surplus labor has virtually disappeared. Poland still has a bit of space, given the high unemployment rate, but this level is dropping quickly," Laursen said. Poland's unemployment rate has dropped to 15.5 percent from as much as 20.6 percent at the beginning of 2004.
The report points to the fact that Polish emigrants are relatively young, well educated and overqualified for the jobs they perform abroad. While they usually work in the secondary sectors of the receiving economies, such as construction, cleaning, restaurants and hotels, the educational structure of those Poles who stay abroad for more than two months is better than that of the general population.
Among migrants who left for the UK after 1997, the share of university graduates amounts to 25 percent, against 10 percent in Poland. According to the authors of the report, Poland's work migration is a temporary phenomenon.
