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The Role of Circular Labor Migration in Reducing Unemployment: How Ambitious Should it Be?

The topic of circular labor migration has recently received increased attention within the objective of reducing unemployment in Georgia. Circular migration Schemes (CMS) are widely recognized policy tools for reducing illegal migration and facilitating the return of emigrants to their countries of origin. The Georgian government’s increased interest and efforts to develop circular migration deals with EU member states serve, on the one hand, the long-term objective of addressing high level of unemployment, and, on the other hand, to reduce illegal, and stimulate legal, migration.

Despite the decreasing trend over the past decade, unemployment remains a major problem in Georgia, reaching 12.7% in 2018. While correctly managed circular migration schemes can indeed reduce unemployment in a sending country, certain questions remain – what extent can they decrease pressure on the labor market, and who are the beneficiaries?

Before addressing the questions, it is important to first define the concept of circular migration and to see where Georgia currently stands. For the purpose of this analysis, let’s also have a quick look at the main features of Georgian emigration.


GEORGIA’S CURRENT STANCE ON DEVELOPING CIRCULAR MIGRATION

Developing circular migration schemes is a priority policy initiative for the Georgian government. It is also listed as one of the objectives of Georgia’s Migration Strategy 2016-2020. By definition, managed circular migration is characterized as “temporary, renewable, circulatory, legal, respectful of the migrant’s right, and managed in such a way as to optimize labor markets at both ends, in sending and receiving countries” (Fargues, 2008). Being managed ensures the matching of labor demand in a destination country with the supply of a country of origin.1 In order to promote circular migration opportunities, Georgia is working on the introduction and development of circular migration schemes with EU member states and other countries, such as Israel and Qatar. Correspondingly, the Georgian government is investing greatly to develop a vocational education and training system, which should potentially reduce the disparities between the qualification of Georgian emigrants and available job abroad.

In 2009, sixteen EU member countries signed Mobility Partnerships with Georgia.2 Under the Mobility Partnership framework, the EU and signatory countries cooperate with Georgia on fighting illegal migration, promoting legal migration, and developing potential circular migration. Circular migration schemes are arranged by bilateral agreements and give annual quotas for entry of a third country migrants for a set period. We will discuss the quota system in more detail below, using the example of France, as the bilateral agreement on circular migration between Georgia and France has already been signed and ratified. This agreement sets a limited employment period for Georgian citizens in France ranging from 6 to 18 months. Destination countries also use point-based systems, which require the migrant to pass a test and accumulate a required score in order to qualify for the entry into the country.3


MAIN FEATURES OF GEORGIAN EMIGRATION

Georgia is a country of net emigration, mostly determined by high unemployment levels and a poorly functioning labor market.4 According to the most recent UN Department of Economic and Social Affairs (UN DESA)5 estimates, in 2019 the stock of migrants from Georgia worldwide stands at 852,816, representing 22.9% of the entire population of the country. Of this figure, 168,238 Georgian emigrants reside in 28 EU countries. Furthermore, GeoStat data reveals that 98,935 people emigrated from Georgia in 2018. Compared to the previous year, 2017, the outflow of migrants increased by 15.8%. A recent 2017 Caucasus Barometer survey, however, suggests that most Georgians are not in favor of permanent emigration. The survey shows that more than half (55%) of the Georgian population is interested in temporary emigration, and only 8% of respondents are interested in permanently leaving Georgia.

Most emigrants are of the working-age population. This holds true for both women and men, as shown in figure 1. The, relatively, younger age groups (under 40) make up 64% of all emigrants.

Figure 1. Percentage Distribution of Georgian emigrants, by age and gender

In addition, labor migration from Georgia is often illegal. According to the 2019 Migration Profile of Georgia, the number of Georgian citizens found to be illegally present in the EU/Schengen countries increased significantly in 2018, as shown in figure 2.

Figure 2. The number of Georgian citizens found to be illegally present in the EU/Schengen countries, by gender

Between 2015-2018, the ratio of illegal migrants in the EU, in total Georgian migrants, ranges from 0.6% to 1%. In 2018, the largest number of the illegal Georgian migrants were found to be living in Germany, France, and Greece.

Based on the 2017 Migration Profile of Georgia, most Georgian citizens found to be present illegally in EU countries were aged 18-34, indicating that these people are potentially looking for employment opportunities in foreign countries. The visa-free regime with the EU increases the need to regulate labor migration and provide emigrants with the legal means to be employed in EU countries.


WHO BENEFITS FROM CIRCULAR MIGRATION SCHEMES AND HOW?

Circular migration is often promoted as a “Triple Win” proposition, providing benefits to countries of both destination and origin, as well as to the migrants.

The “win-win-win” argument often claimed for managed circular migration schemes relates to:

- responding to labor market needs in receiving countries without issuing permanent residence for migrants;

- promoting development in countries of origin through reducing labor market pressure without brain drain, reducing irregular migration, and benefiting from remittances, knowledge, and skills transfers;

- improving socio-economic conditions and qualifications of individual migrants.

Once the benefits are in place, it is particularly interesting to understand the scale of the benefits.

It is hard to see how Georgian migrant workers act as significant deal winners in circular migration, considering the limited choice of job opportunities. In December 2018, the State Commission on Migration Issues published a study assessing the demand for labor resources in the EU and Georgia’s potential to provide relevant specialists. Based on a detailed analysis of both Georgian and EU labor markets, craftsmen, hospitality sector workers, and drivers were identified as the primary target occupational groups for inclusion in circular migration schemes. According to the study, Georgian professionals working in these areas are greater than the number of individuals who are formally qualified for these jobs. In addition, they accumulate considerable work experience and skills, and can be easily retrained to meet the requirements set by European employers. There are also some opportunities for Engineers, however they would require much more extensive and costly training. Considering the prioritized target group of migrants, the same study identified the best suited EU destinations for the Georgian labor supply. These countries are Austria, Germany, Belgium, Italy, Slovakia, Slovenia, Hungary, Finland, Sweden, Poland, Malta, and Croatia. It would therefore be important for Georgia to sign bilateral agreements with these countries, making it more likely that the investments sending nations offer for the vocational training of potential migrants is not wasted.

The gains of the sending country are very much dependent on the benefits received by the migrants. The impact of circular migration on the county of origin is rather limited, given the small quotas of legal migration opportunities provided, and the small scale of circular migration programmes, if any, that is unlikely to make a substantial development impact on sending countries facing high unemployment.6 In 2013, an agreement, that has already been ratified, on the stay of qualified specialists and circular migration was signed between Georgia and France. The agreement covers both the employment of French citizens in Georgia and Georgians in France, allocating 650 quotas for job in total for Georgian citizens (150 working quotas for young specialists and an additional 500 quotas for all other categories annually).7 Notably, there are also two pilot circular migration projects implemented by Georgia in cooperation with Germany and Poland. Within the framework of the Strengthening the Development Potential of the EU Mobility Partnership in Georgia through Targeted Circular Migration and Diaspora Mobilisation program, 27 Georgian specialists (nurses and hospitality sector representatives) were employed in Germany from 12 to 18 months. Some hospitality professionals were reemployed upon their return by their former employers in Georgia, while the majority of nurses, passing a recognition exam, prolonged their employment in Germany by another one to three years.8 With the support of the International Organization for Migration (IOM), 30 welders, construction workers, and truck drivers were employed in Poland. The migrants’ return statistics are dynamic and exhibit some circularity between Georgia and Poland.9

Georgia is currently working to establish bilateral agreements on circular migration with Greece, Norway, Sweden, Finland, Lithuania, Spain, Portugal, Estonia, the Czech Republic, Hungary, and Ireland.10 Though, even if all 16 signatories of the Mobility Partnership (MP) declaration provide an annual quota for Georgia, the number would be too small to make a significant development impact on the country and will only marginally reduce unemployment. If we take 650 as rough estimate for the quotas given by other signatory countries, similar to France, the total number of annual entries would account to 10,400. Assuming those estimated 10,400 quotas solely address the unemployed (an unrealistic scenario), only 4.2% of total unemployed could benefit from circular migration schemes. Thus, this quota would only affect a few thousand illegally working emigrants, without any further unemployment relief.

For the receiving countries, circular migration schemes seem to be extremely beneficial, as the destination countries increase their economic production by filling sectoral labor market shortages with “labor without people”.11

Empirical studies on circular migration are scarce due to a lack of statistics. This hinders the understanding of the phenomenon and the measurement of the full costs and benefits associated with circular migration deals, which may affect the sending or host countries’ capacity to make informed policy decisions. The recent EU enlargements of 2004, 2007, and 2013 added 13 new member states, and induced new flows of circular labor migrants within the union. A study conducted by the European Migration Network12 discusses the positive emerging practices and aspects of temporary and circular migration in the EU Member States. As the study concludes, although initial evaluations of member’s relevant existing programs and policies approve the positive results for the participating migrants, there is less evidence suggesting there are any significant benefits to the county of origin or to employers.


CONCLUSION

While developing circular migration schemes is a useful undertaking, the labor market relief such schemes may provide for countries of origin would be too small to truly affect an unemployment problem. Addressing high level of unemployment requires policy measures and strategies aimed at developing the economy to create more and better jobs locally. In order to maximize the benefits of circular migration for the sending country, subsequent efforts should also be taken to provide employment and reemployment opportunities for returning migrants. In many instances returned migrants can bring back improved skills and higher qualifications (gained via training and working abroad), that would benefit the local labor market.


1 Fargues, F. (2008) Circular migration: Is it relevant for the south and east of the Mediterranean? CARIM analytic and synthetic notes 2008/40, EUI: Florence.
2 The Joint Declaration on a Mobility Partnership between the European Union and Georgia (20 November 2009). Signatory EU countries: Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Greece, France, Italy, Lithuania, Latvia, Netherlands, Poland, Romania, Sweden, and the United Kingdom.
3 Diakonidze, A. (2018) Study report assessing the potential of temporary (circular) migration of Georgian labor migrants to the EU.
4 Interrelations between Public Policies, Migration and Development in Georgia, OECD/CRRC study (2017).
5 Type of data: foreign-born population (B), UNHCR refugees (R).
6 P. Wickramasekara, Circular Migration: A Triple Win or a Dead End, ILO: Geneva 2011
7 Quotas are allocated in the areas of social, agricultural, craft, industrial, commercial, and freelance activities, though a specific list of professions is not yet specified. https://ge.kavkazplus.com/news.php?id=21351#.XfeHP25uKUl
8 Goos, A. (2016) Cited in Mestvirishvili, N. (2018) Circular Migration Schemes in Georgia: Lessons Learned and Ways Forward, Prague Process.
According to German legislation, the recognition exams have to be passed within a maximum period of 12 months. As national legislation prevails over CMS project provisions, there were no legal means to enforce the return of nurses from Germany involved in the project if they pass the recognition exam (Goos, 2016).
9 Mestvirishvili, N. (2018) Circular Migration Schemes in Georgia: Lessons Learned and Ways Forward, Prague Process.
10 2019 Migration Profile of Georgia.
11 Wickramasekara, P. (2011) Circular Migration: A Triple Win or a Dead End, ILO: Geneva.
12 The European Migration Network. (2011) Temporary and circular migration: empirical evidence, current policy practice and future options in EU Member States.


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Sunday, 25 October 2020

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