New publication of the RILSA

Vyhlídal, Jiří - Jahoda, Robert - Godarová, Jana
The economic benefits of managed labour migration
Praha: RILSA, 2017. 78 pp. - ISBN 978-80-7416-310-4

This study aims to answer the questions whether and how is it possible to solve through labour migration the problems associated with the current and expected demographic development in the Czech Republic. Demographic prognosis expects that fertility rate, in the long run, will stay under the limit of simple reproduction of the population. Consequently, the population will be reduced by more than 2.8 million people during the 21st century. Also, the structure of the population will change significantly. Old-age dependency ratio will increase as a result of the growing share of older people in the population. According to the expectations mentioned above, estimating the volume of migration necessary to replace losses due to the overall decline in population and specifically by reducing the proportion of the persons of working age proves essential. The LFS and EU-SILC data show that strategies and ways of participation in the labour market in the Czech Republic for individual foreigners differ, among other characteristics, also depending on the country of origin. Compared with the domestic population, foreigners coming from Russia and Ukraine display a higher tendency to do business, not only without but also with employees. A particular group are immigrants from Vietnam. Their participation in the labour market has strong elements of both ethnic and family business. Only about one in six Vietnamese in the Czech Republic has a standard employment contract. Majority of them are entrepreneurs without employees and one in five is in the position of a helping family member. To quantify the impact of demographic development on the Czech pension system we developed a simulation model. Our model is based on the outputs presented by the Bezděk's commission and extends them with the impact of expected migration flows. The model assesses the impact of migration in terms of the following five indicators: (1) development of the balance of migration; (2) development of the country's population; (3) development of selected dependency indices; (4) development of the pension system balance as % of GDP; and (5) development of the implicit pension debt as % of GDP. The model results are presented in two variants. The first variant called “zero migration” simulates the situation when there is no immigration to the Czech Republic. The aim of the second variant called "controlled replacement migration" is to simulate using active migration policy to better take into account the future requirements of the labour market and pension system. There is a risk of deepening the problems with financing the pension system, in the case "zero migration". Conversely, the immigration can be a significant factor for long-term sustainability of the pension system. However, this applies only provided that we can manage the volume and structure of immigration and implemented policies will lead to the social and economic integration of immigrants.

Fulltext  (only in Czech)

what was new before

New publication of the RILSA

Monitoring of labour costs in the Czech Republic, States of the European Union and the USA in the the period of 2010-2015. Bulletin No. 11

more ...