MIGRATION, COVID, REMITTANCES AND ECONOMIC GROWTH IN THE BALTIC STATES: A REGIONAL PERSPECTIVE

Abstract

The Baltic states have faced high emigration flows since joining the EU in 2004. While integrating to the EU, the region has faced many economic and political issues, including migration due to Covid-19 and various economic factors. These issues revealed the weaknesses of their economic policies, financial systems and social security systems. Though, after the EU accession in 2004, the Baltic economies demonstrated rapid economic growth, but the financial and economic crisis has evidently shown their weaknesses. The Baltic states is a crucial example of the regions where the current emigration has drawn the attention of policy makers seeking to reduce the possible negative effects of the emigration of young and skilled workers. We have employed fixed effects and OLS estimation to conduct our research. Our regression analysis has demonstrated that remittances positively and significantly contribute to the economic growth of the Baltics. However, we emphasize the importance of further analysis of the geography of remittances to the region, especially under conditions of Brexit given the high share of remittances which the Baltics were receiving from the United Kingdom during years. The effects of Brexit on remittances flows from the United Kingdom to the Baltics will definitely take place in the future, thus, shifts in emigration flows and remittances should be in focus.