Victor-Bogdan OPREAN
Diana-Mihaela POCIOVĂLIŞTEANU
Adina POPOVICI
New Directions in Welfare
Paris, 6-8 July 2011
Types of Social Security Systems considered:
 Self sustained/sustainability (self sustained, system, systemic)
inputs – processes – outputs
= Collect –> Invest –> Benefits –> Distribute
 Welfare
= Collect –> Distribute
(Rom.)
New Directions in Welfare
Paris, 6-8 July 2011
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
prod.
eviction
migration
EU15,
Wwide
New Directions in Welfare
Paris, 6-8 July 2011
MIGRATION:
COST?
BENEFIT?
migration
migration
New Directions in Welfare
Paris, 6-8 July 2011
MIGRATION:
COST
Romania & EU15
MODEL:
 ExpEduRoTt l
LbrTxRate
ConsTxRate
Migration cost  Emigr  
 1000  EarnRo 
 Cons 
100
100
 EmplRo



New Directions in Welfare
Paris, 6-8 July 2011
MIGRATION:
COST
Romania & EU15
CALCULUS:
Yr.of
obs.
cost
elem.
GDPRo
GDPEU15
ExpEduRoTtl
EmplRo
Emigr
EmplEU15
EarnRo
LbrTxRate
Cons
ConsTxRate
MIGR. COST
Average:
7
230,150.10
10,321,478
10,801.73
9,569.30
5,792.25
137,344.80
7,944.70
29.50
8,800.00
17.70
2003 - 2009
6
251,307.30
10,971,654
9,486.10
9,410.40
4,321.00
138,478.30
6,833.60
30.20
9,600.00
18.00
5
223,380.90
10,948,450
7,956.93
9,267.20
5,792.25
139,791.10
5,953.80
30.10
8,600.00
17.80
4
195,837.60
10,388,429
5,910.40
9,330.70
5,792.25
142,095.50
5,639.80
28.10
7,800.00
17.90
3
170,040.30
9,860,497
5,249.30
9,364.80
6,346.00
144,653.80
4,930.30
29.00
6,800.00
16.40
2
1
160,176.10
9,472,944
4,859.80
9,365.90
7,179.00
145,725.90
4,802.80
29.60
6,300.00
17.70
141,043.90
9,061,233
4,604.30
9,174.80
5,323.00
143,042.10
4,722.90
31.20
5,500.00
16.20
29,135,460 20,739,899 24,220,325 20,935,622 19,707,643 21,936,232 15,257,776
21,704,708.58
New Directions in Welfare
Paris, 6-8 July 2011
MIGRATION:
COST
Romania & EU15
FRAMEWORK,
Hypothesis:
H1: Romania & EU15 asymmetric federation
2 periods: education – production (live, work, tax)
taxes:
τ  τw  τg
Rom.:
τ  τw
H2: a part of the internationally applicable education in Romania is
also applicable in EU15
hiRo m
γ
hiEU1 5
where
γ
= the ratio of internationally applicable in Romania which can also be
applied in EU15
hi = internationally applicable education (in Romania or EU15)
γ 1
New Directions in Welfare
Paris, 6-8 July 2011
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:
ZRom
χ
ZEU15
where: ZRom = productivity in Romania
ZEU15 = productivity in EU15
Ζ
GDP
 (GDP per capita employed)
Employment
IF χ <1, there exist the premises for the migration incentive from Romania în
EU15
Calculated, χ = 0.29
New Directions in Welfare
Paris, 6-8 July 2011
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
γ (1 ε )  χ
where:
γ
= 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
γ
1 ε
χ
ε  - 0.5 ;  0.5 
= 0.29
γ ( 1  ε )  0.5 ; 1.5   γ (1  ε)  0.29
New Directions in Welfare
Paris, 6-8 July 2011
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
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:
Annual Average cost per emigrant:
5,800 persons
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
MIGRATION:
COST
Romania & EU15
EXTRAPOLATION:
results according to OECD estimates:
2.7 mil.pers. x 3,800 €PPS/pers =
10,260,000,000 €PPS
RELEVANŢĂ:
15% from medium and long-term external Romanian
debt in 2010
4.5% from Romanian 2010’ GDP
la destinaţie
…cetăţenie…
1 Year’s Education Budget (in Romania, 4% of the GDP)
New Directions in Welfare
Paris, 6-8 July 2011
Thank You
New Directions in Welfare
Paris, 6-8 July 2011