The European Training Foundation (ETF), in collaboration with Vienna's Institute for International Economic Studies (wiiw), have looked at how migration, human capital and the labour market interact in six countries in the region - Serbia, North Macedonia, Bosnia & Herzegovina, Montenegro, Kosovo and Albania.
Montenegro has perhaps one of the most complex patterns of migration in the Western Balkans. In a region that has long witnessed extensive emigration, the small former Yugoslav republic has high levels of emigration, large regional immigration, and circular migration patterns that all impact the domestic labour market, human capital development, and education.
A newly published report, How migration, human capital and the labour market interact in Montenegro: www.etf.Europa.eu/en/publications-and-resources/publications/how-migrat… shows that as a country with a major tourism sector (concentrated on its Adriatic coastline), Montenegro experiences large seasonal emigration as local workers leave for better-paid summer work in Croatia or Slovenia. In return, this drives demand for immigrant workers from poorer parts of the neighbouring countries, principally Serbia and Bosnia and Herzegovina.
Net emigration annually sees the loss of younger, mostly medium-educated people (particularly the 24-29 cohort). Apart from the loss of some qualified doctors - a common theme in the Western Balkans - there is no solid evidence of a widespread brain drain. There is actually evidence of a modest 'brain gain' through returnees who have worked or studied overseas for various periods.
Migration patterns
Although it is the smallest Western Balkans country in terms of territory and population, with a total of just under 620,000 inhabitants, Montenegro has witnessed persistent emigration, with its migrant stock rising between 2010 and 2019 by just over 4,000 people to 153,000 in total (representing nearly a quarter of the entire population). The majority goes to Germany and Luxembourg, while more recent flows include new member states of Croatia and Slovakia.
At the same time, seasonal temporary migration by Montenegrins, particularly in the tourism sector, means the country attracts immigrants, mainly from Serbia, Bosnia and Herzegovina and North Macedonia (plus
Russian and Ukrainian nationals) to work in a country where the service sector represents some 72% of GDP, followed by construction at nearly 20%.
In 2019 more than 27,600 temporary resident permits for foreigners were issued to address labour shortages in a country where existing unemployment of 19% is already double that of the EU, rising to 32% for those aged 15-29. The main sectors with recorded labour shortages in the country are construction, tourism, hotels and restaurants, agriculture, and trade.
Internal migration from poor, rural northern communities to towns and cities in the south and east of the country further exacerbates a complicated labour market where skills gaps and educational short fallings combine to threaten longer-term economic prospects, despite modest economic growth of 4% in the five years (2015-2019) before the Covid crisis hit.
Political anxieties
Although Montenegrin politicians and media outlets sometimes frame migration as a threat to the country's economic stability, the report found little evidence to support fears of a brain drain.
A recent study (Leitner's Cohort Approach, 2021) found that although "the period 2012-2019 is characterised by net-emigration strongly driven among people aged in their mid-20s-to 30s, there is evidence of a brain gain among all cohorts but that of 25-29 (which, during the period become the 34-38 cohort). Moreover, net-immigration of the highly educated is highest among the two youngest cohorts, 15-19 and 20-24."
Much of this net-immigration gain seems driven by students returning from studying abroad, although a paucity of domestic statistics on migration make precise calculations challenging.
The only evidence of a brain drain is that of qualified medical doctors, the report found. "The health sector is facing a continuous emigration of doctors according to the Medical Association of Montenegro… more than 160 medical doctors emigrated in the last five years - more than 7% of the total number of licensed doctors in Montenegro." Better pay and working conditions were the most significant factors attracting doctors to emigrate, with most heading for Slovenia (32%) and Germany (23%).
Skills management
However, the majority of emigrants are those with lower or middle-level general and vocational qualifications, the study found. Addressing the mismatch between Montenegro's education system and the labour market is a key challenge to managing migration in the future, it states.
Although net enrolment in upper secondary education is high (89%) and gross enrolment in tertiary education is 54%, according to UNESCO figures for 2019, and 68% of upper secondary students follow vocational courses, PISA scores are lower than in the EU. World Bank figures show expected years of schooling as 12.8 years, but this drops to 8.9 years when factoring in what children actually learn.
The mismatch between skills and the labour market (in some cases overqualification, particularly among higher vocational and university graduates, is the main challenge) has led to policies designed to "align teaching standards to Europe and enhance the quality of education delivered", the report states.
Concerns over the skills mismatch - identified as one of the most worrying issues in human capital development by stakeholders in the country - prompted Montenegro to become the first in the region to implement large dual VET education programmes. The reform established with the backing of the ETF and the ILO in 2017 has already seen 56% of dual VETs finding employment after graduation.
By increasing the labour market relevance of skills taught, and government policies designed to improve wages and working conditions in both the public and private sector, policymakers hope to increase incentives for qualified workers to stay in Montenegro.
Looking ahead
The complexity of Montenegro's migration challenges demands a wide range of policy responses that are focused on better managing rather than attempting to curb migration, the report says.
Key recommendations include engaging in dialogue both with the EU (and particularly Germany) and working on bilateral agreements with regional sources of immigrants to manage migrant flows better. "The new EU Pact on Migration and Asylum may present an opportunity for dialogue," the report suggests.
Better regulation of Montenegro's labour market, particularly addressing the wide informal employment in tourism and other services sectors, can help improve emigration and immigration flows. A smooth implementation of the Law on Foreigners to balance the
immigration flows with sectoral needs are needed to better implement the country's Strategy on Migration and Reintegration of Returnees (2021-25) without delay.
The government should also address measures to improve the relevance of education and training to labour market needs, the report recommends.
Attached, you might find both the English and Montenegrin versions of the report.
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