Migration to Germany is shaping the Western Balkans for better and worse, highlighting the need for reforms to harness benefits and mitigate drawbacks.
Migration has long shaped the demographic and economic realities of the Western Balkans, with Germany emerging as the primary destination for emigration. Since the 1990s, persistent emigration, combined with negative natural population growth, has led to significant population declines in Western Balkan countries, raising concerns about the region’s development. Yet this migration also generates economic benefits for origin countries, notably through remittances, trade, foreign direct investment (FDI) and diaspora networks.
This Working Paper analyses the most recent migration wave to Germany, sparked by Germany’s 2015 Western Balkan Regulation (WBR) which facilitated labour flows from the region to Germany. While the benefits of the WBR for Germany are evident, the consequences for the Western Balkans have been mixed. Outflows are particularly significant in sectors vital for development, including healthcare, manufacturing and construction. Remittances remain important as support for household consumption, while trade and FDI links with Germany have deepened.
Numerous factors motivate people to leave the region, from poor labour market outcomes to less welfare support and mistrust of institutions. Germany, meanwhile, has strong pull factors, including higher wages, stronger welfare systems, better education and more attractive career prospects in the German labour force.
The true challenge for the Western Balkans, therefore, is to manage the phenomenon in ways that are conducive, rather than damaging, to its development. Reforms in the areas of employment, education and the rule of law can reduce the compulsion to leave. Meanwhile, rising cross-border capital flows between Germany and the region, together with reverse knowledge spillovers from the diaspora and possible return migration, can turn labour mobility into a source of growth.
Source : Bruegel
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