The report provides an overview of significant statistical trends and policy and practice changes in migration in Estonia and the European Union. Among other topics, the report tackles labour and entrepreneurship migration.
Lauren studies the fields of labour migration, global cities, and innovation centres, as well as the work environment of the future. Ave has a doctorate in geography from Cambridge, where her research focused on the migration of the highly qualified labour force to Silicon Valley and the San Francisco Bay area, analysing the role of corporations in boosting those mobility and migration flows. She also studied how this impacts policy development and migrant communities.
What was the situation of labour migration like last year in Estonia and Europe?
In recent years, in Estonia and elsewhere in the EU, more attention has been paid to regulating labour migration and making it more efficient. Many countries, including Estonia, are struggling with a labour force shortage that is curbing the growth potential and competitive edge of European companies. In 2019, the situation in Estonia became even more critical because the unemployment rate dropped to the lowest level this century (3.9%), meaning the number of active jobseekers also fell.
Thus, countries had to hunt actively for talent to attract suitable skilled workers. The war over talent has become even more complicated because, in addition to the usual competitors (the United States, Canada, Australia and New Zealand), Europe is now faced with rapidly developing Asian and African countries, which have also started simplifying their labour migration systems. For example, Japan hopes to attract nearly 300,000 talented people in the coming years. Countries are implementing various methods to try to make themselves appealing to foreign labour and to stand out among competitors. In Estonia, we developed the first-ever digital nomad visa, for example, which allows foreigners to come here, stay as a tourist and at the same time continue working for a foreign employer or as a freelancer regardless of their location.
At the same time, EU member states are trying to avoid a situation where increased immigration could make the labour market situation more problematic by leading to unemployment or by supporting social dumping (i.e. undermining social regulations and standards and avoiding them with the aim of economic profit or competitive advantage, e.g. by relocating production to a country with weaker labour regulations). Thus, EU countries worked in 2019 to calibrate national labour migration systems to find a better balance between supply and demand of labour force.
How much foreign labour reaches Estonia?
A total of 2,218 initial residence permits were issued in Estonia for work last year, which is about 20 per cent more than the year before. But this is no longer the primary way foreign workers reach us. An immigration quota is set for initial residence permits, but this only really regulates labour migration. In a situation of a labour force shortage, the quota has been a challenge to local employers. As a result of which a few years back, short-term employment was permitted in Estonia for anyone staying in the country legally and which today has become the main channel for bringing in foreign labour. A total of 32,245 instances of short-term employment were registered in 2019, which is more than 62 per cent more than the year before, and 14 times larger than the total number of residence permits issued for work. The most popular country of origin in 2019 was Ukraine (24,327), followed by Belarus and Russia.
The report also discusses growing migration related to startups. What is the situation like in Estonia in this regard?
There are 13 member states, Estonia among them, which have created separate welcome schemes or so-called startup visas for startups from third countries. The first to do this were the United Kingdom (2008), Ireland (2012) and Spain (2013).
Estonia has been issuing startup visas and residence permits for both startups and employees of startups since 2017. Moreover, our system has quickly become one of the most successful in Europe, and we have been role models for others. In 2019, a total of 985 applications for startup assessments were submitted (annual growth of 25.6%), of which 201 were approved. Last year, 84 startup founders and 286 employees reached Estonia. The turnover of the companies founded due to the special startup regulation was 17.51 million euros in 2019, from which Estonia received more than 3 million euros in taxes.
Although the review focused on the changes in 2019, how has this year’s COVID-19 pandemic impacted labour migration?
The shortcomings of labour migration systems which have not allowed them to cope with unexpected changes in the labour market have been discussed a lot in Europe. Specific economic sectors depending on foreign workers (e.g. agriculture), where normal economic activities were hindered due to the sudden stoppage in labour force movement, faced major challenges. The seasonal lack of labour force in agriculture caused problems in food supply chains, which endangered Europe’s food security.
An additional problem which emerged was related to the residence permits of migrating workers depending on a specific employer and workplace, the loss of which can lead to the loss of a legal basis for staying in the country. This type of situation became a significant challenge for foreigners who lost their jobs as a result of the COVID-19 pandemic and created a situation where a legal migrant could become an illegal immigrant overnight.
Whereas after the refugee crisis many member states reviewed and amended legislation in the field of international protection, then with COVID-19 we have developed a need to do the same with labour migration regulations and, together with stakeholders, develop necessary risk plans for the future.
The annual report on citizenship and migration policy is available in Estonian on the EMN Estonia website here.
