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WORKFORCE MIGRATION AND ITS EFFECTS ON EDUCATION OUTSOURCING: THE CASE OF
ROMANIA
Victor-Bogdan OPREANDiana-Mihaela POCIOVĂLIŞTEANUAdina POPOVICI
New Directions in WelfareParis, 6-8 July 2011
Sustainability in the Social Security Systems (SSS)
Types of Social Security Systems considered:
Self sustained/sustainability (self sustained, system, systemic)
inputs – processes – outputs
= Collect –> Invest –> Benefits –> Distribute
Welfare
= Collect –> Distribute(Rom.)
prot
ectio
n
insu
ranc
e
New Directions in WelfareParis, 6-8 July 2011
Sustainability in the State Social Security System
(SSSSS) focus: Romania, public pension “fund”
V (W (professional training/edu. t-1, t-2, … , t-k))
education/knowledge, information
System? – sub-system, supported
economic growth (endogenous, Keynes)
New Directions in WelfareParis, 6-8 July 2011
educ.
cons.
fiscality
prod.
eviction
migration
EU15,Wwide
continued, Sustainability in the State Social Security System (SSSSS)
focus: România, public pension “fund”
New Directions in WelfareParis, 6-8 July 2011
migration
MIGRATION: COST? BENEFIT?
continued, Sustainability in the State Social Security System (SSSSS)
focus: România, public pension “fund”
migration
New Directions in WelfareParis, 6-8 July 2011
MIGRATION:
COST Romania & EU15
MODEL:
100
ConsTxRate Cons
100
LbrTxRate EarnRo 1000
EmplRo
lExpEduRoTt Emigr cost Migration
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
New Directions in WelfareParis, 6-8 July 2011
Yr.of obs.cost elem.
7 6 5 4 3 2 1
GDPRo 230,150.10 251,307.30 223,380.90 195,837.60 170,040.30 160,176.10 141,043.90GDPEU15 10,321,478 10,971,654 10,948,450 10,388,429 9,860,497 9,472,944 9,061,233ExpEduRoTtl 10,801.73 9,486.10 7,956.93 5,910.40 5,249.30 4,859.80 4,604.30EmplRo 9,569.30 9,410.40 9,267.20 9,330.70 9,364.80 9,365.90 9,174.80Emigr 5,792.25 4,321.00 5,792.25 5,792.25 6,346.00 7,179.00 5,323.00EmplEU15 137,344.80 138,478.30 139,791.10 142,095.50 144,653.80 145,725.90 143,042.10EarnRo 7,944.70 6,833.60 5,953.80 5,639.80 4,930.30 4,802.80 4,722.90LbrTxRate 29.50 30.20 30.10 28.10 29.00 29.60 31.20Cons 8,800.00 9,600.00 8,600.00 7,800.00 6,800.00 6,300.00 5,500.00ConsTxRate 17.70 18.00 17.80 17.90 16.40 17.70 16.20MIGR. COST 29,135,460 20,739,899 24,220,325 20,935,622 19,707,643 21,936,232 15,257,776Average: 21,704,708.58
2003 - 2009
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
MIGRATION:
COST Romania & EU15
CALCULUS:
New Directions in WelfareParis, 6-8 July 2011
FRAMEWORK, Hypothesis:
H1: Romania & EU15 asymmetric federation2 periods: education – production (live, work, tax)
taxes: Rom.: gw τ τ τ w τ τ
H2: a part of the internationally applicable education in Romania is also applicable in EU15
where = the ratio of internationally applicable in Romania which can also be applied in EU15= internationally applicable education (in Romania or EU15)
EU15
Rom
i
i
h
h γ
γ
ih
1 γ
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
MIGRATION:
COST Romania & EU15
New Directions in WelfareParis, 6-8 July 2011
H3: there is a productivity differential between Romania and EU15 which would provide an incentive for romanian citizens to migrate
the productivity differential:
where: ZRom = productivity in Romania ZEU15 = productivity in EU15
IF <1, there exist the premises for the migration incentive from Romania în EU15
Calculated, = 0.29
EU15
Rom
Z
Z χ
employed) capitaper (GDP Employment
GDP Ζ
χ
χ
continued, FRAMEWORK, Hypothesis:
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
MIGRATION: COST
Romania & EU15
New Directions in WelfareParis, 6-8 July 2011
H4: romanian citizens with EU15 applicable education have a multiplicative random individual-specific ability, connected to productivity, greater than the productivity differential
where: = the ratio of internationally applicable in Romania which can also be applied in the EU15( = 1, the particular case considered)
= the multiplicative random individual-specific ability, connected to productivity component
= 0.29
χ ) ε 1 ( γ
γ
ε 1γ
0.5 ; 0.5- ε χ
continued, FRAMEWORK, Hypothesis:
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
MIGRATION: COST
Romania & EU15
0.29 ε)(1 1.5 ; 0.5 ) ε 1 (γ γ
New Directions in WelfareParis, 6-8 July 2011
TOTAL 7 Yrs.: 152,000,000 €
Educ.: 19.15%
Labor: 45.75% Cons.: 35.10%
RESULTS:
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
MIGRATION: COST
Romania & EU15
New Directions in WelfareParis, 6-8 July 2011
: …+ EU15 emigrants, total ( 7Yrs., EuroStat&RNIS) ≈ 40,500
TOTAL 7 Yrs: 152,000,000 €
Anuario Estadistico de Extranjeria ( in 2001): 13,603 persons, Romanian immigrants in Spain
Annual cost average: 22,000,000 €PPS
Annual emigrants in EU15 average: 5,800 persons
Annual Average cost per emigrant: 3,800 €PPS/emigrant
OECD (2010) estimation for the total Romanian immigration: 2.5 – 2.7 million
SYN THESIS:
RESULTS:
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
MIGRATION: COST
Romania & EU15
New Directions in WelfareParis, 6-8 July 2011
LIMITS: VA lost (productivity differential of the emigrants) not considered
only 1 year of emigrant’s education was computed, at present average value
results according to OECD estimates: 2.7 mil.pers. x 3,800 €PPS/pers =
10,260,000,000 €PPS
EXTRAPOLATION:
RELEVANŢĂ:
15% from medium and long-term external Romanian debt in 2010
4.5% from Romanian 2010’ GDP
1 Year’s Education Budget (in Romania, 4% of the GDP)
Brain Drain /
Brain Gain
gτwτ
la destinaţie …cetăţenie…
New Directions in WelfareParis, 6-8 July 2011
Sustainability in the State Social Security System
(SSSSS) focus: România, public pension “fund”
MIGRATION: COST
Romania & EU15
Thank You
New Directions in WelfareParis, 6-8 July 2011