Audit: Better migration policy needed to meet economic challenges (14)
The National Audit Office has released its overview of the migration policy choices faced by Estonia, which indicates that the state can use both employment reforms and other national reforms as well as migration wisely and in suitable proportions as levers for improving the outlook of its economic development. If Estonia wants to be successful in the international competition for attracting people who have the capacity to generate income, it has to guarantee for such people a suitable working and living environment that proceeds from a broad view of the world, the audit found.
According to forecasts, the number of working-age people aged 20-64 in Estonia will decrease by about 50,000 in the next five years, and by as much as 165,000 by 2040. At the same time, the number of people aged 65 and over is estimated to increase by 24,000 by 2020 and by more than 88,000 by 2040.
As a result, Estonia is unlikely to be able to maintain its pension and health insurance systems, unless it finds ways supplement its workforce and generate more income. Even if Estonia undertakes reforms to bring a bigger share of the inactive part of the population to the labor market and increase productivity, the auditors maintain that this is still not enough to cover the need for workforce internally. “It’s unlikely that domestic sources can provide the entire workforce needed for the development of Estonian economy,” the report said.
An alternative is to smartly use the skills and knowledge offered by the people who come to work and live in Estonia from other parts of the world. However, for this to work, Estonia needs a more active and successful approach to migration.
According to the Estonian Population Register and the Police and Border Guard Board, 39,000 people migrated to Estonia from 2005-2013. The share of return migration and EU citizens in immigration has increased in recent years and the share of third countries has decreased respectively.
The majority come to Estonia for family reasons or to study. They are mostly young people with an average age around 30.
The audit office found that although finding work is also one of the most important preconditions to immigration, the state has not given any special attention to the employment of family migrants, although developing a separate program for them might be beneficial. At present, family migrants only have access to the same labor market services as the rest of the population.
At the same time, the number of foreign students who come to study in Estonia and then stay to work in Estonia on a more permanent basis has increased (about one in five). The majority are citizens of nearby countries of similar cultural backgrounds, while the position of students from third countries on the labor market is in many ways worse than that of EU students - fewer of them find jobs, they work for shorter periods of time and also earn less.
“Although significant work has been done to attract foreign students to Estonia and their number has increased considerably, it is necessary to think systematically about ways to encourage students with skills and knowledge needed by Estonia to enter the local labor market,” the report found, adding that this could be done by offering more internship opportunities, which allow students to learn about the Estonian labor market and, at the same time, give local employers the experience of working with foreigners.
The latter is clearly needed. The present practice indicates that the capacity of Estonian society and the state to receive, adapt and integrate immigrants is lacking. “The limited accessibility of public information and services in foreign languages causes difficulties for immigrants, as do the insufficient preparedness of kindergartens and schools, and society’s and employers’ attitude towards people of foreign origin. These factors make Estonia less attractive for qualified workers”, the auditors explained.
Indeed, whereas the state would rather see immigration by top specialists, very few workers with high-level knowledge and skills move to Estonia due to its complicated immigration system. Most people who arrived in Estonia from third countries from 2005-2013 were skilled workers. Only every third migrant works in a position that requires higher qualifications.
So, if the state wants the labor migrants who come here to be mostly top specialists, it needs to decide which internationally used measures that promote labor migration could be employed in Estonia, how to attract people with the necessary skills and how to guarantee their adaptation, the report said.
No benefits tourism
While excessive use of social benefits is often seen as a threat associated with immigration, this is not the case with Estonia, the report found. On average, immigrants receive fewer benefits than local people.
For example, subsistence benefit was paid to 2.7 percent of the Estonian population in 2013 and only to 1.5 percent of immigrants. The share of foreigners who received unemployment benefits was considerably smaller than that of Estonian people. The majority of the social benefits paid to immigrants (77 percent) are generally related to children and family, not coping problems.