Feb 16, 2009

Migrants during the economic crisis: blessing or burden?

By Lucia Kurekova

It is no secret that in times of an economic downturn, such as the one we face today, migrant-based employment serves as a buffer in dealing with needed re-adjustments in the markets. When the working opportunities decline, migrants often decide to return home or governments implement policies the goal of which is to facilitate the return of migrant labor to home economies. A look at migration in the context of no or negative growth and severe lay-offs of cross-sectoral nature around the world invites us to re-think the nature of the possible impact of migrant employment both at sending and receiving economies. This issue is particularly topical in the frame of East-West migration in the EU. Already before the bad news of world-wide crisis fully broke through, media coverage increasingly commented on Polish – and other – migrants’ increased tendencies of return migration. Let us briefly think of whether or how the return of migrants is a blessing or a burden on the home economies of Central and Eastern Europe which are escaping the crisis no less than the rest of the advanced world.

In the countries where the out-migration was one of the factors behind the record downfalls of unemployment levels after the EU accession (such as Poland and Slovakia), the economic and social impact of returning migration is not entirely clear. It however certainly requires more policy attention than it seems to have attained so far. Preparing sets of economic crisis packages, the governments in negotiations with social partners and businesses understandably concentrate on ways of how to freeze the existing levels of employment and seem to think less of ways how to integrate the returning labor. Yet, if only half of the labor migrants who had gone to the West decide to come back, we are talking about thousands of people whose homes are in the more depressed regions of these countries where unemployment problem has never been alleviated even during the time of an economic boom. While the workers who had gone to the UK or Ireland are mostly young and single, those CEE migrants who had been working in the automotive sector in the neighboring CEE countries (Slovaks, Poles or Romanians in the Czech Republic or Hungary), tend to be middle aged males with families to support. Those, again, can be counted in thousands.

Hopes that the returning migrants will be a blessing to the economy are thus potentially false. Equally questionable are also the anticipations that they will easily integrate into home labor markets after their return as they have advanced their human capital while living and working abroad. This would have partly been the case had they returned in the period of acute labor shortages which was the most severe labor market problem merely a year ago and had we continued to live in economic prosperity and prospects of growth. At that time, the prospering automotive and electronics companies were tackling the lack of available labor force by importing workers from nearer or further abroad - Central Asia to Vietnam. Unsurprisingly, these ‘imported’ workers from non-EU countries were the first ones to feel the impact of the crisis in Central and Eastern Europe. Had then the today laid-off Slovak workers from Hungarian Audi or Czech Skoda wanted to work in the KIA factory near Zilina (for example), they would have been well paid and appreciated. Today they are and will remain redundant. The degree to which the young and well-educated migrants (see my older post) who are returning from Britain or Ireland will settle back well is equally questionable. While their skills seem to be more transferable, the type of working experience – gained in low skilled and low paid jobs - is unlikely to ease their labor market integration or give them comparative advantages in the competition for relatively scarce jobs during the time of economic crisis.

To know which form and type of job creation to support in order to handle the return migration is a difficult question. Returning migrants are a great potential, if for nothing else, then for being young and wanting to work – that is what they had been doing abroad. The avenues are hence several and would range from easing and supporting the self-employment opportunities to even establishing publicly funded knowledge-intensive centers which would provide prospects for the most skilled.

Providing capital and administratively easing avenues for establishment of own businesses is likely to create a fruitful ground for the young and relatively well-educated migrants who left for the West and gained there confidence and potentially sets of new business ideas. At the same time, the CEE countries should use the crisis as a window-of-opportunity for allowing the best of the best to find at home the infrastructure that will allow them to develop further their specific high-profile skills. There are many who have been employed in research and development segments of various industries abroad and will be at risk of loosing their positions as R&D is unlikely to be supported much during the crisis. That would mean creating assets for the time after the crisis. Whether we can – both mentally and financially - look that far head is a real challenge but perhaps it is an issue to have in mind once the most urgent crisis measures are in place.

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Feb 14, 2009

Roadmap for Czech tertiary education reform

By Katka Svickova

In January 2009, the Czech government adopted the White Book on Tertiary Education, a document which defines where the Czech tertiary education should be heading in the next ten to twenty years. It foresees a complete overhaul of the Czech tertiary system in terms of structure, governance and financing. In addition to their two traditional roles of education and research, tertiary education institutions shall play a third, equally important role: in the “production of knowledge and creation of the innovation potential of the society“.

The White Book promises to let fresh wind into the whole system that faces similar problems like systems in the whole Europe (also in my post from May 2008). However, given the low proportion of tertiary educated people in the population and comparably low spending on education overall, the overhaul is particularly pertinent in the Czech Republic. How to make tertiary education more open and accessible while at the same time not to undermine the quality of teaching? How to make tertiary education more sustainable financially? How to increase the volume and quality of research and its application in the economic sphere? These are just examples of questions that the White Book promises to answer. So what does it propose?

The Czech Republic is an EU leader in inequality of access to tertiary education by social background. The proposed solution focuses on lifting the disadvantages of a student´s social background on the one hand, and broadening of the educational offer on the other. The first goal should be achieved, above all, through a change in the financing of the tertiary system – instead of all public finances going directly to the educational institutions, part of them should be redirected to the students themselves in the form of educational grants and special educational loans. This shall allow students to pay tuition fees, enable students from socially disadvantaged families that cannot afford to support their child at university to cover his or her expenses, and bring more competition for students among tertiary education institutions. The second goal of broadening the educational offer should be achieved by a greater diversification of tertiary education and expanding considerably the two and three year long bachelor programs both in terms of capacity and variety of offer. The bachelor degrees should be practice- and profession oriented.

The White Book also correctly posits, though, that the solution to the problem of accessibility lies to a large extent outside the tertiary education institutions. Decreasing the selectivity and improving the quality of primary and secondary education are also of key importance, together with spreading the culture of overall appreciation of tertiary education and the aspirations for acquiring it in all groups of the society.

The diversification and the financing reform (increase in financing from both public and private sources, the latter predominantly in the form of tuition fees, but also better spending of these resources) shall go hand in hand with a change in governance of the tertiary sector towards more autonomy. This autonomy will also relate to internal structuring of the individual institutions and allocation of funds in research-related activities inside them. The White Book also seeks to eliminate barriers between the university research and the private sector whereby higher autonomy should create the necessary space for finding the best arrangements for individual tertiary institutions.

Of course, the brief summary above cannot go into all the complexities of the reforms outlined in the strategic document. And surely, the White Book does not address all needs of the tertiary sector in sufficient detail and thoroughness. What the document does, though, is a fair attempt at an analysis of the strengths and weaknesses of the current system, perceiving them in their complexity and inter-relatedness. The reform outlined on this basis reflects these complexities well.

In all, the document is well thought-through and well argued, taking clear positions e.g. on the above mentioned overhaul in the financing structure of tertiary education and introduction of tuition fees, on broadening of the bachelor level education and connecting it with practice, or on the concept of universities as places of “knowledge production” for the market. This poises it to become a subject of controversy among experts and politicians – and rightly so given the pertinence of the issue. It would be a pity if the current financial crisis pushed such a debate too much into the background. A high-quality and well-functioning educational system is not only one of the essential ingredients of a sustainable, diversified and sophisticated domestic economy but can also serve as an important social cushion. Tertiary educated people have generally better chances on the labor market and so far, the lay-offs in Central Europe caused by the crisis have taken their toll predominantly among the lower educated labor force (see one of my previous blog posts on this topic). Even though this might change as the crisis unfolds, tertiary education can significantly increase one´s chances of finding another job.

The problems that the Czech tertiary education is facing and the directions proposed in the White Book do not differ substantially from the situation and debates in other European Union countries. However, hidden in the text of the document is a precondition for undertaking and success of the reforms outlined: the existence of healthy and well-financed tertiary sector institutions in which teaching as well as basic research are at high level and independent of commercial activities. Reaching this standard alone is a daunting task: yet we all should wish and care about its successful completion.

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