The national workforce crisis can be alleviated by relaxing the migration policies, says an analysis performed by the independent think tank Expert-Grup. According to the experts, given the demographic tendencies witnessed in the Republic of Moldova, which point to a reduction in the number of people of working age, the relaxation of the conditions for admitting foreign workers can be a method for overcoming the imbalances on the national labor market, IPN reports.
The Moldovan business entities admit that the shortage of experienced personnel, the low number of applicants and the impossibility of offering the necessary salary are among the main problems they face. The additional relaxation of the conditions for admitting foreign workers in the Republic of Moldova, following a number of previous rounds of easing restrictions, is a frequency discussed solution to such problems.
“Some of the employers continue believing that the process of employing foreign workers is difficult and demand to additionally liberalize the conditions by extending the validity period of permits of stay, excluding particular employer obligations, spreading admission over unqualified workers,” says the analysis.
As regards the possible advantages of the relaxation of admission conditions for foreign workers, research shows that immigration has a much smaller impact on salaries and the employment of native workers or does not have any impact.
“From the viewpoint of workforce, the impact of immigration on salaries and employment depends on whether the abilities of migrants complement or substitute the skills of local labor force. When the immigrants substitute local workforce, immigration is expected to increase competition for the exiting jobs and to reduce salaries. If the skills of migrants are complementary to the skills of native workers, productivity can improve as a result of synergy, leading to a rise in salaries,” noted Expert-Grup.
Research also shows that when the supply on the building market is rigid, immigration can push home prices up. The pressure exerted on the balance of payments is another cause as the foreign workers send their earnings to the native country in the form of remittances, while the enterprises that benefit from their work distribute their profits abroad.
“Even with a relatively low number of immigrants in the Republic of Moldova, which was estimated at 104,000 in 2020 by the United Nations Department of Economic and Social Affairs, the annual outflow of personal remittances from Moldova represents 2.5-3% of the GDP. If the number of immigrants rises by 35,000-40,000, additional pressure will be annually exerted on the current account balance in proportion of about 1 percentage points of the GDP. Surely, this pressure is alleviated if the work of foreigners contributes to increasing exports or substituting imports,” shows Expert-Grup’s analysis.
