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Jul 10, 2013 | 10:12 GMT

In the Baltics, Emigration and Demographic Decline

(ILMARS ZNOTINS/AFP/Getty Images)
Summary

Declining fertility rates and increasing life expectancies have led to aging, shrinking populations in Lithuania, Latvia and Estonia. This demographic picture can be found in most European countries, but in the Baltics, the issue has been exacerbated by particularly high rates of emigration, creating a host of economic, political and social challenges. With higher numbers of elderly people and fewer young workers to support them, for example, regional governments will be saddled with increasing fiscal demands. The Baltic states will also be under increasing demographic pressure from neighboring countries and struggle to balance the need to themselves attract foreign workers while preserving indigenous cultural identities. These trends are unlikely to be reversed, forcing Baltic leaders to focus on mitigating the effects of the ongoing demographic shifts.

In March, Latvian President Andris Berzins said that if massive emigration from his country does not stop, its independence will be in doubt 10 years from now. The same could be said of Estonia and Lithuania.

From 1990 to 2011, Lithuania's population fell from 3.6 million to 3 million. Over the same period, the population of Latvia declined from 2.6 million to 2 million, while Estonia's fell from 1.5 million to 1.3 million. These declines were partly due to low fertility rates, which have remained below the replacement level of 2.1 children per woman (the number of births needed to keep population levels stable) for more than two decades. Fertility rates have improved slightly over the past decade due to policies applied by each national government, but they are still among the lowest in the European Union. 

Baltics Fertility

Baltics Fertility

 
Today, while the total EU population is projected to continue growing until peaking around 2045, the populations of Lithuania, Latvia and Estonia are still shrinking. Eurostat projects Latvia to lose 10 percent of its population between 2010 and 2030, while Lithuania is projected to lose 8.6 percent and Estonia 4.5 percent.
 

Meanwhile, over the past two decades, life expectancy increased from 71 years to 73 years in Lithuania, from 70 to 73 in Latvia and from 70 to 76 years in Estonia. Life expectancy is still longer in Western European countries such as Germany (80 years) and France (81 years), but it is shorter in neighboring Russia (69 years) and Belarus (70 years). In the Baltics, the old-age dependency ratio (the number of people older than 64 compared to those of working age) is projected to rise between 2010 and 2030 — from around 25 percent to 36 percent in Estonia and Latvia and from around 23 percent to 35 percent in Lithuania, according to Eurostat. These figures are less than certain Western European countries, including Germany (around 47 percent in 2030) and Italy (roughly 41 percent in 2030), but they are in line with the European Union's broader demographic picture.  

The combination of falling birthrates and rising life expectancy means that the populations in the Baltics are indeed getting older. Between 1991 and 2011, for example, the portion of Estonia's population older than 65 grew from 11.7 percent to 17 percent. This segment of the population increased from 11.8 percent to 18.4 percent in Latvia and from 11 percent to 17.9 percent in Lithuania. By 2030, according to Eurostat, the elderly are expected to make up 21.7 percent of Estonia's population, 22.1 percent in Lithuania's and 22.2 percent of Latvia's.

Emigration Patterns

The problem of aging, declining populations has been long-standing throughout the European Union. But the emigration issue makes it considerably worse in the Baltics.

Over the past decade, migration in each Baltic country has followed a similar pattern: The first phase occurred after Latvia, Lithuania and Estonia joined the European Union in 2004, when loosened access to labor markets in Western Europe led to an immediate jump in emigration in each country (this trend also appeared in several other Central and Eastern European countries that joined the bloc between 2004 and 2007). Emigration from the Baltics then stabilized between 2006 and 2008. But the onset of Europe's financial crisis in 2009 once again compelled increasing numbers of Estonians, Latvians and Lithuanians to venture abroad.  

Baltics Emigration

Baltics Emigration

Since then, emigration has differed somewhat in each Baltic state. While emigration has increased sharply in Lithuania and Latvia since 2009, the outward flow has been considerably lighter in Estonia, where the economic crisis was relatively milder and the recovery comparatively faster. Indeed, joblessness has consistently been lower in Estonia than in its neighbors since 2010. In the first quarter of 2013, for example, the unemployment rate was 10.5 percent in Estonia, 13.1 percent in Latvia and 13.3 percent in Lithuania.

The crisis has been particularly rough for Lithuania, which saw an unprecedented increase in registered emigration in 2010. But the size of the jump was somewhat of an anomaly related to changes in Lithuania's health insurance system, which all Lithuanians pay into. Per the reform, emigrants who failed to notify the government of their departure from the country would still be required to make health insurance payments. This compelled several emigrants who had yet to declare their departures, including those who had left Lithuania before 2010, to rush to do so.

Meanwhile, there has been a modest amount of immigration to the Baltic states, mostly from former Soviet republics such as Belarus and Ukraine. There has also been a flow of irregular migrants attempting to transit to Nordic countries or Western Europe.

A Typical Baltic Emigrant

Most Baltic emigrants are nationals from Lithuania, Latvia and Estonia. By comparison, most of those leaving Western European countries such as Spain and Ireland tend to be foreigners returning home after the opportunities that attracted them to Europe in the first place evaporated in the economic crisis.

Most Baltic emigrants are also young — a characteristic seen throughout Europe — typically encouraged to leave by high unemployment at home and the prospect of better wages abroad. The educational level of emigrants is balanced. A quarter of the workers who left Lithuania in 2010 had completed university education, while a third of Latvian and Estonian emigrants in 2010 had completed tertiary education.

The United Kingdom and Ireland are the preferred destinations for most Baltic emigrants, primarily because London and Dublin were among the first countries to open their labor markets to workers from the Baltics in 2004, while other nations applied temporary restrictions. Emigration to Finland and Sweden is also common due to their geographic proximity to the Baltics. And to a lesser extent, emigrants have also been heading to Germany, Norway and Russia.

Looming Challenges

The overlapping problems of dropping fertility rates and increasing emigration have put Lithuania, Latvia and Estonia in a complex situation. While heavy emigration may provide limited short-term relief to the region's unemployment problems, the region's demographic issues will pose serious economic and political challenges over the long run.

For example, Baltic countries will have to deal with a shrinking workforce and a growing number of retirees — factors that will reduce each country's tax base while increasing fiscal pressure on the governments, since they will need to devote higher amounts of resources to areas such as pensions and health care. Demographic change will also lead to a growing competition for skilled and semi-skilled workers in Europe. Unless they can find ways to keep their most valuable workers at home, Baltic countries will likely be among the losers in the EU-wide race for workers.

Moreover, Lithuania, Latvia and Estonia face political and cultural threats from more populous neighbors such as Poland, Russia and, to a lesser extent, the Nordic countries. For example, the Baltics perceive Russia as their main geopolitical threat, since they were each once subjugated by the Russian Empire and later the Soviet Union. Today, Estonia and Latvia still have sizable populations of ethnic Russians (roughly a quarter of each country's total population), and limiting Moscow's influence remains a key element of foreign policy in the Baltics. Russia's main lever of influence is through political parties that are oriented toward ethnic Russians, such as Latvia's Harmony Center and the Estonian Centre Party. However, the ethnic Russian populations in Latvia and Estonia appear to be either stable or slowly declining. Though Russia's demographic clout in the Baltics will likely continue to play a significant role at least in the short to medium term, it could diminish.

Russia is having major demographic problems of its own, but its fertility rates have recovered slightly over the past decade to 1.54 children per woman today — just above the rates in Latvia and Estonia and slightly below Lithuania's. Russia's demographic decline is also being mitigated by increasing immigration among Muslims in former Soviet republics. According to the Russian government, the country is projected to lose around 8 percent of its population by 2030, slightly less severe than the declines in Lithuania and Latvia. Thus, despite its demographic crisis, Russia's size will still give it considerable regional sway over the next two decades.

Policy Changes and Limited Solutions

Baltic governments have been attempting to address their demographic challenges with a host of policy changes. For example, all three Baltic states offer generous maternity benefits in hopes of improving birthrates, with Estonia allowing new mothers up to 20 weeks of paid maternity leave — more than France (16 weeks) and Germany (14 weeks). And in May, the Latvian Parliament voted to end a restriction on dual citizenship for people of Latvian descent living abroad. With the reform, Latvians and their descendants outside the country can retain or obtain Latvian citizenship without abandoning a second citizenship in their new place of residence. The goal of the change is to encourage emigrants and their children to eventually return to Latvia. Notably, this law excludes Latvians living in Russia and other members of the Commonwealth of Independent States.

There have also been efforts to increase immigration to the Baltics, but the issue is a sensitive one in the region. For example, the number of annual immigrants to Estonia cannot exceed 0.1 percent of the country's permanent population (up from 0.05 percent before 2008). EU citizens, as well as those from Norway, Switzerland, Iceland, the United States and Japan, are exempted from the quota, and additional exemptions can be made for people with particular skills or educational backgrounds. Still, the issue remains controversial in Estonia. Certain sectors of the economy, especially high-tech companies, are pushing for a larger quota, while others contend that loosened immigration restrictions would threaten the country's cultural homogeneity.

Nevertheless, Baltic countries are undergoing demographic shifts that will shape the coming decades, and these sorts of policy tweaks can do little to prevent them. The aging populations, for example, are unlikely to get much younger, since the drop in birthrates stems from a series of economic and cultural changes common among modern societies. Instead, the governments of Lithuania, Latvia and Estonia will focus on mitigating the effects of demographic change by, say, providing social and economic benefits for families with children, while still trying to reduce emigration and draw back their diasporas.

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