EU Integration & Emigration Consequences: The Case of Lithuania

This paper analyses the causes, consequences, and policy implications of Lithuanian emigration following the country's European Union (EU) accession in May 2004. After placing Lithuanian emigration in its historical context, the study assesses the recent dynamics, including the driving forces and characteristics of Lithuanian emigration at both the international and domestic level. The study finds that the primary determinants of this movement are both demand- and supply-side factors. On the demand side, the labour shortages, decline in the working age population, and desire for cheaper labour in Western European countries function to attract Lithuanian labour. Concurrently, lower wages, higher unemployment, and the generally less developed economic conditions in Lithuania are encouraging Lithuanians to take advantage of the greater mobility that came with EU accession. The expanding networks linking migrants and potential migrants are facilitating this out-migration, as well as the social mind-set by which emigration is a perceived solution to socio-economic difficulties. This study concludes that the consequences of this new emigration reality are mixed. The free movement of workers has helped to relieve pressure on the domestic labour market, drive down unemployment, place upward pressure on wages, and increase the remittances rate to Lithuania. However, concern is not ill-founded; recent emigration has introduced labour market shortages, placed greater demographic pressure on the country, and increased the likelihood of brain drain. This study argues, therefore, that while Lithuanian emigration cannot and should not be stopped, Lithuania does have policy alternatives as a sending-country that will help to mitigate the costs of emigration and maximize the benefits for the country's long-term development.