WORKFORCE MIGRATION AND ITS EFFECTS ON EDUCATION OUTSOURCING: THE CASE OF ROMANIA

1. WORKFORCE MIGRATION AND ITS EFFECTS ON EDUCATION OUTSOURCING: THE CASE OF ROMANIA Victor-Bogdan OPREAN Diana-Mihaela POCIOVĂLIŞTEANU Adina POPOVICI New Directions in Welfare Paris, 6-8 July 2011

2. 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.) insurance protection New Directions in Welfare Paris, 6-8 July 2011

3. Sustainability in the State Social Security System (SSSSS) focus: Romania, public pension “fund” • V (W (professional training/edu. t-1, t-2, … , t-k)) System? – sub-system, supported economic growth (endogenous, Keynes) education/knowledge, information New Directions in Welfare Paris, 6-8 July 2011

4. continued,Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” sustainability architecture, structure, organization fiscality migration eviction educ. prod. cons. EU15, Wwide New Directions in Welfare Paris, 6-8 July 2011

5. continued,Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST? BENEFIT? migration migration New Directions in Welfare Paris, 6-8 July 2011

6. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 MODEL: New Directions in Welfare Paris, 6-8 July 2011

7. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 CALCULUS: 2003 - 2009 New Directions in Welfare Paris, 6-8 July 2011

8. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 FRAMEWORK, Hypothesis: H1: Romania & EU15 asymmetric federation 2 periods: education – production (live, work, tax) taxes: Rom.: 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) New Directions in Welfare Paris, 6-8 July 2011

9. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 continued, FRAMEWORK, Hypothesis: 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 New Directions in Welfare Paris, 6-8 July 2011

10. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 continued, FRAMEWORK, Hypothesis: 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 New Directions in Welfare Paris, 6-8 July 2011

11. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 RESULTS: Labor: 45.75% Cons.: 35.10% Educ.: 19.15% TOTAL 7 Yrs.: 152,000,000 € New Directions in Welfare Paris, 6-8 July 2011

12. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 RESULTS: SYN THESIS: TOTAL 7 Yrs: 152,000,000 € Annual cost average: 22,000,000 €PPS Annual emigrants in EU15 average: 5,800 persons Annual Average cost per emigrant: 3,800 €PPS/emigrant LIMITS: VA lost (productivity differential of the emigrants) not considered only 1 year of emigrant’s education was computed, at present average value : …+ EU15 emigrants, total ( 7Yrs., EuroStat&RNIS)≈ 40,500 Anuario Estadistico de Extranjeria ( in 2001): 13,603 persons, Romanian immigrants in Spain OECD (2010) estimation for the total Romanian immigration: 2.5 – 2.7 million New Directions in Welfare Paris, 6-8 July 2011

13. Sustainability in the State Social Security System (SSSSS) focus: România, public pension “fund” MIGRATION: COST Romania & EU15 CONCLUSIONS EXTRAPOLATION: results according to OECD estimates: 2.7 mil.pers. x 3,800 €PPS/pers = 10,260,000,000 €PPS RELEVANŢĂ: Brain Drain / Brain Gain 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) la destinaţie …cetăţenie… New Directions in Welfare Paris, 6-8 July 2011

14. Thank You New Directions in Welfare Paris, 6-8 July 2011