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

Abstract

The Baltic States have been facing higher emigration flows since joining the EU in 2004. While integrating to the EU, this region has faced many economic and political issues, which revealed the weaknesses of their economic policies, financial systems and social security systems. Even though after the EU accession in 2004 the Baltic economies have demonstrated rapid economic growth, still their financial performance under the 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 the policy-makers seeking to reduce the possible negative effects from the emigration of young and well-skilled workers. Here, we have employed fixed effects and OLS estimation methods to conduct our research analysis. Our regression analysis has demonstrated that remittances positively and significantly contribute to the economic growth of the Baltic. However, we also need to emphasize the importance of further analysis of the geography of remittances to the region, especially under the conditions of Brexit, given the fact that for many years a large share of remittances the Baltics were receiving from the United Kingdom. The effects of Brexit on the 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 the focus of future research.