This article was downloaded by: [University of Macedonia] On: 20 November 2013, At: 22:37 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
Southeast European and Black Sea Studies Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/fbss20
The mutually reinforcing relation between international migration of highly educated labour force and economic crisis: the case of Greece a
Lois Labrianidis & Nikos Vogiatzis
b
a
Department of Economics, University of Macedonia, Regional Development and Policy Research Unit, 156 Egnatia Street, Thessaloniki 54006, Greece b
Department of Planning and Regional Development, University of Thessaly, Regional Development and Policy Research Unit, 156 Egnatia Street, Thessaloniki 54006, Greece Published online: 19 Nov 2013.
To cite this article: Lois Labrianidis & Nikos Vogiatzis , Southeast European and Black Sea Studies (2013): The mutually reinforcing relation between international migration of highly educated labour force and economic crisis: the case of Greece, Southeast European and Black Sea Studies, DOI: 10.1080/14683857.2013.859814 To link to this article: http://dx.doi.org/10.1080/14683857.2013.859814
PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,
Downloaded by [University of Macedonia] at 22:37 20 November 2013
systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/termsand-conditions
Southeast European and Black Sea Studies, 2013 http://dx.doi.org/10.1080/14683857.2013.859814
The mutually reinforcing relation between international migration of highly educated labour force and economic crisis: the case of Greece Lois Labrianidisa* and Nikos Vogiatzisb
Downloaded by [University of Macedonia] at 22:37 20 November 2013
a
Department of Economics, University of Macedonia, Regional Development and Policy Research Unit, 156 Egnatia Street, Thessaloniki 54006, Greece; bDepartment of Planning and Regional Development, University of Thessaly, Regional Development and Policy Research Unit, 156 Egnatia Street, Thessaloniki 54006, Greece (Received 28 September 2012; accepted 29 July 2013) Although several studies aim at analysing the causes and impacts of the current economic crisis, especially involving the case of Greece, the role that highly educated population holds has not received wider attention. Based on an examination of both secondary data on the Greek economy/labour market and primary data collected by a survey that included 1821 graduates, this paper shows that underutilization of highly educated population harmed the competitiveness of the Greek economy, a factor which has significantly contributed to the creation of the current debt crisis and fostered the migration of graduates. Keywords: economic crisis; brain drain; highly skilled migration; Greece
1. Introduction: economic recession in Greece Several studies have been recently published regarding the global financial crisis, in which Greece holds a central role, especially after November 2009, when the country became the ‘epicentre of global capitalism, attracting headlines all over the world’ (Hadjimichalis 2011, 256). The current situation is usually explained as the outcome of three set of factors: first, the destabilizing role of financial institutions and rating agencies (cf. Crotty 2009; De Grauwe 2010; Nelson, Belkin, and Mix 2010; Supiot 2010; Varoufakis 2011), as the liberation of financial markets encouraged governments to obtain seemingly low-risk or risk-free loans that led countries, such as Greece, to access excessive capital at very low interest rates. This policy resulted in high levels of external debt (see Figure 1) and extended financial pressures (Christodoulakis 2010, 92). Second, when the debt crisis appeared in the country, the institutional setting within the Eurozone proved to be unprepared or unwilling to provide the financial markets with a clear signal that a support plan for Greece was set. According to Hadjimichalis (2011) and Lapavitsas et al. (2010), this unwillingness reflects the splitting of the Eurozone into ‘core’ (mainly Germany and France) and ‘periphery’ (Greece, Spain, Portugal, Ireland and/or Italy), in which the ‘periphery’ has been powerless in competing against the ‘core’, despite the financial support it received *Corresponding author. Email:
[email protected] © 2013 Taylor & Francis
2
L. Labrianidis and N. Vogiatzis 120.0 100.0
% of GDP
80.0 60.0 40.0 20.0
a ni
ia an
E st o
ub
R
om
lic
ria
ep
C
ze ch
R
la
ga
nd
B ul
in Ire
S pa
E U
-2 7
l ga
ce
P or tu
y an
Fr an
um gi
er m G
ly
B el
Ita
ce re e G
Figure 1. Government consolidated gross debt as a percentage of GDP (2001–2010 average). Source: Eurostat, Government deficit/surplus, debt and associated data.
80 60 40
US$ billion
20 0 -20 -40
Spain
United Kingdom
Greece
Italy
Portugal
Poland
Euro area
Netherlands
Norway
Switzerland
-60 Germany
Downloaded by [University of Macedonia] at 22:37 20 November 2013
0.0
Figure 2. Current account balances (US$ billion, average 1993–2011). Source: Compiled by the authors – data from OECD, Current Account Balances.
through the Community Structural Frameworks over recent years, due to the constraints imposed by the EMU. Thus, extended current account deficits and surpluses were created within the EU during the past years (Figure 2).
Southeast European and Black Sea Studies
3
70,000
0 -5,000
60,000 50,000
-15,000 -20,000
40,000
-25,000 30,000
-30,000
Trade Balance
Exports-Impots
-10,000
-35,000
20,000
-45,000
Exports
Imports
10 20
09 20
08 20
07 20
06 20
05 20
04 20
03 20
02 20
20
01
-50,000
00
0
20
Downloaded by [University of Macedonia] at 22:37 20 November 2013
-40,000 10,000
Trade Balance
Figure 3. Value of imports-exports from Greece – Trade Balance (in million €). Source: Compiled by the authors – data from Bank of Greece, Trade Balance (annual).
Third, it is undoubtedly true that the country also suffers from several ‘internal’ weaknesses and burdens, both in economic and sociopolitical terms that had a negative impact on its development and competitiveness over time. Spraos (1997), for example, favours the explanation of the ‘Dutch disease’ that made the Greek manufacturing sector less competitive in the international markets and led to negative trade balances during the period 2000–2010 (Figure 3). Doxiadis (2011) argues that this is also the result of the operation of small-scale businesses, as the country presents one of the highest shares in Europe in regard to self-employment or employment in micro-enterprises, reaching 57% of the total, compared to 30% for Europe and 20% for Northern Europe. These shares are identified with small business units, which are less capable to invest in export-oriented activities compared to larger business units, due also to several other constraints (e.g. low-tech, lack of financial resources, traditional management methods – see Liargovas 1998; Makridakis et al. 1997 – and restricted investment in highly educated human capital – see next Section). Furthermore, the Greek public sector has been unable to raise significant revenues during the past years, while public expenditures have been significantly increased (Figure 4). Featherstone (2011) argues that this indicates a lack in implementation strength on the part of public administration, a phenomenon which stems from poor intra-governmental coordination, efficiency and resources and a weak national tax system, also vulnerable to corruption. Stathakis (2011) argues that the current government debt in Greece is entirely based on the relentless tax evasion by the upper class since the 1950, a fact that highlights the relation between efficiency of the bureaucracy/corruption and shadow economy (Katsios 2006). Based on recent estimations (The Economist 2010), tax evasion costs the Greek government US$15 billion each year (almost 5% of GDP), while the informal econ-
4
L. Labrianidis and N. Vogiatzis 140,000 120,000 100,000 80,000 60,000
20,000
Expenditures
10 20
09 20
08 20
07 20
06 20
05 20
04 20
03 20
02 20
01 20
00
0
20
Downloaded by [University of Macedonia] at 22:37 20 November 2013
40,000
Revenues
Figure 4. Total general government revenues and expenditures in Greece (in million €, 2000–2010). Source: Compiled by the authors – data from Eurostat, Government revenue, expenditure and main aggregates.
omy accounts for 20–30% of GDP (Pavlopoulos 2002; Schneider, Buehn, and Montenegro 2010). This corrupt local political and social behaviour, as well as the state inefficiencies, is among the causes that have been repeatedly used as explanations for the debt crisis. Pelagidis and Mitsopoulos (2011) and Doxiadis (2011) describe the Greek sociopolitical culture as being marked by extended clientelism and rent-seeking, alongside a tendency to perpetuate the current ‘status quo’, involving the protection of local ‘elites’ who managed to create opacity in administrative, economic and legal procedures. Hence, the current debt crisis in Greece could be summarized as the result of: the role of functioning and monitoring mechanisms of financial institutions on a global, European and national level; the fact that Greece, being part of the European ‘periphery’, suffered from the uneven development within the EU; and the structural weaknesses and ‘informality’ of the Greek economic, social and political background. Nevertheless, the ongoing financial crisis has also revealed the major weaknesses of the developmental plan of the country, which has undoubtedly led to an accumulated loss of competitiveness over time. At the same time, and despite the deep recession in which the Greek economy is found today, the need for a new developmental strategy is more than essential. We do believe that this strategy should be focused on the fostering of a knowledge-based economy, given that highly educated human capital constitutes one of the most fundamental, albeit supplanted, dimensions of competitiveness in the case of Greece. Our main argument here is that low competitiveness of the Greek economy could also be attributed to its inability to take advantage of the presence of highly educated scientific personnel in the national labour market (brain-waste). Even
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Southeast European and Black Sea Studies
5
though an explanation of this phenomenon could be the upward trend observed for higher education studies in Greece (that created a growing number of graduates during the recent years due to several factors that will be discussed later), another reason is the fact that the country has been for long postponed its shifting from a low-cost to a knowledge-based economy, which has contributed to the creation of the ongoing financial crisis. Additionally, Greece suffers from a loss of this valuable asset, as a large number of this highly educated labour force migrates abroad in order to work there (see Section 3). The loss of these ‘talents’ further diminishes the potential for higher competitiveness, which imposes a vicious cycle of underdevelopment that does not allow the country to escape from the crisis. Adding to this situation, migration of graduates is likely to increase in the near future due to the economic recession, as a cutback of investment both in human capital (Giwa 2000) and in firms’ upgrading efforts in order to move up the value chain is possible. Hence, a relation between these phenomena is observable and in need of further investigation. The remainder of this paper is structured as follows: the next section focuses on the examination of the role and significance of the highly educated labour force in the Greek economy, alongside an assessment of the environment in which it is employed, through the examination of the available secondary data regarding the Greek economy and labour market. Section 3 presents the empirical findings from a study conducted in 2009–2010 regarding the migration of graduates from Greece, while the last section summarizes our basic findings and suggestions. 2. The role of graduates in the Greek economy The role of human capital and knowledge in the process of economic growth constitutes one of the critical elements of the ‘new growth theory’ literature, which was primarily initiated by Lucas (1988) and Romer (1986), who highlighted the role of ‘endogenous’ factors, based on Arrow’s previous work (1962). The fundamental argument is that countries which maintain and take advantage of the presence of a highly educated human capital (an endogenous factor) are also able to reap the benefits of technological advances and accelerate their productivity, due to the knowledge those individuals possess and can dispose. Even though this argument has received a certain criticism (cf. Manki, Romer, and Weil 1992), Cohen and Soto (2007, 52) argue that this is due to the measurement of human capital, both conceptually and empirically. Moreover, studies conducted during the last 15 years (Barro and Sala-Martin 1995; Driouchi, Azelmad, and Anders 2006; Jones 2002) confirm that productivity and competitiveness are indeed positively associated with knowledge creation and application, while an examination of the available statistical data reveals that the most developed OECD countries are those that are denoted as knowledge-intensive economies (Williams and Baláž 2008). Therefore, it is not surprising that since the mid-1990s terms such as ‘knowledge-economy’ (OECD 1996) and ‘learning economy’ (Lundvall and Borrás 1999; Nielsen and Lundvall 2003) are underpinned with the role and significance of human capital and human resources’ upgrading (Florida 2002). Additionally, there seems to be a relationship between stocks of a highly educated population in a region and localization decision of (particularly knowledge-intensive) firms (Scott 2004; Storper 1995), even though the distinction between cause and effect in this relationship is not always clear (Kourtessis 2008).
Downloaded by [University of Macedonia] at 22:37 20 November 2013
6
L. Labrianidis and N. Vogiatzis
Hence, it is extremely interesting to assess the relative importance of a highly educated human capital – and the surrounding environment in which it functions, since this forms an important factor in determining how well and how quickly human capital is built up (Giwa 2000, 5) – in the case of the Greek economy, in order to shed some light on the relation between human capital formation and migration, competitiveness and economic recession. First, it is useful to examine the demand for higher education in Greece and the stocks of graduates in the country, starting from the process of human capital formation and given the fundamental role of education in it. The available statistical data from UNESCO1 reveal that the rate of tertiary education enrolments in Greece rose from 45.3% in 1998 to 90.8% in 2007 and this increase could be attributed to several factors, such as: (i) the increase in the number of both the eligible entrants and the establishment of new universities by the State, combined with the lack of consistent and systematic efforts from the state to implement a plan for an educational system that could better address the labour market needs; (ii) the growing number of secondary education graduates (Liagouras, Protogerou, and Caloghirou 2003; Lianos, Asteriou, and Agiomirgianakis 2004); and (iii) the social mobility observed in the Greek society, which encouraged enrolment in higher education as a means to achieve higher ‘social status’ (Tsoukalas 1982), often associated with a ‘prestigious’ position, in terms of better overall working conditions, mainly in the public sector (Katsanevas 2002; Livanos and Pouliakas 2011). As a result, a large share of those who failed to enter the Greek higher education system was also motivated to study abroad, in order to fulfil the ‘requirement’ of holding a university degree. However, data on tertiary education enrolment presented above must be interpreted very cautiously, as Liagouras, Protogerou, and Caloghirou (2003, 416) note, due to the large share of non-active students in Southern European countries, which reaches 50% in the case of Greece (Pagoulatos and Mpourikos 2006). This relatively high share could be attributed to the fact that, until recently, there was not a restriction for students who have not completed their studies during the compulsory period, which, combined with the fact that tuition is generally free of charge and that a mandatory lecture attendance policy is not embraced, allowed a large share of students to remain enrolled in order to avoid the military service (in the case of males) and enjoy the related social benefits (free medical care, reduced fares on public transportation, etc.). Obviously, inactive students correspond also to a relatively lower number of students who indeed manage to graduate. Thus, Greece was placed in the 12th position among 23 EU countries regarding the share of tertiary education graduates among economically active population in 2008 (Table 1), a fact which indicates that even though a growing demand for higher education has been met in the country during the last few years, the number of tertiary education graduates has not surpassed an ‘optimal’ limit that could fully explain their underutilization in the labour market. Still though, we can not set aside the fact that an over-supply in certain professions is observed in Greece, such as in the case of doctors, lawyers, etc. while a relative absence is recorded in technical professions. The demand for higher education in Greece was recently assessed by Mitrakos, Tsakloglou, and Cholezas (2010a, 2010b) who, based on data from the Labour Force Survey for the period 2004–2007, showed that better educational qualifications seem to be quite effective, on the one hand, in shielding against unemployment on the long run, and, on the other hand, in ensuring higher labour
Southeast European and Black Sea Studies
7
Table 1. Share (%) of tertiary education graduates among economically active population* (2008).
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Country 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Cyprus Belgium Finland Ireland Estonia Lithuania Spain Luxembourg Sweden Netherlands France Greece Latvia Bulgaria UK Poland Hungary Austria Malta Italy Slovakia Czech Rep. Portugal
% 36.9 36.5 35.0 34.2 33.8 33.7 31.7 30.7 30.4 30.2 30.1 26.5 26.0 24.6 23.3 22.6 21.9 17.9 17.5 16.6 15.8 15.3 14.8
*
Population aged more than 15 years old. Source: Compiled by the authors – data from ILO, Economically active population, by level of education and age group (Thousands).
remuneration for graduates, even though significant differences emerge within the educational levels and academic disciplines. It is indicative that the share of employees who reported a monthly income higher than 1250€ is 53% among individuals with postgraduate studies, compared to 33.5% for university degree holders and 12.1% for upper secondary education graduates. Hence, entrance to tertiary education appears to be a rational decision for a student in Greece. Lambropoulos and Psacharopoulos (1992) have shown that the earnings advantages of higher education were lowered by 40% during the period 1975–1987, while Kanellopoulos (1997) reached a similar conclusion by estimating that the wage premium ratio of higher education to secondary education declined from 1.5 in 1974 to 1.23 in 1994. A more recent study (Livanos and Pouliakas 2011) reveals that even though positive returns of higher education are evident in Greece, lower mean wage returns appear over time, as a result of the saturated job market prospects, especially with regard to degree holders in scientific fields that presented a growing demand during past years, such as medicine and law.2 Therefore, a question remains on whether these returns can justify the investment on higher education on the long run; the answer, according to Mitrakos, Tsakloglou, and Cholezas (2010a, 2010b) lies on whether enterprises in Greece will increase their demand in high-skilled human capital, given in particular the rapid expansion of tertiary education attendance.
Downloaded by [University of Macedonia] at 22:37 20 November 2013
8
L. Labrianidis and N. Vogiatzis
As far as their absorption in the labour market is concerned, it is true that the public sector has long served as the major employer for graduates, since it was estimated that almost 75% of them were employed there during the 1990s (Pesmazoglu 1994, 293–4; OECD 1997, 116), but this share is significantly lower (approximately 40%) according to a more up to date study (Karamessini 2008) as well as based on calculations from recently published data (35%).3 Adding on that, this share is likely to be further reduced in the near future, owing to the shrinkage of the public sector that the new austerity measures propose. The restricted employment opportunities for Greek scientists are further confirmed through the examination of the data regarding the employment in technology and knowledge-intensive sectors. In particular, Greece is ranked in the 26th position in the EU27 with only 1.93% of the total employment corresponding to these sectors, compared to 4.48% on average for the EU27 (Figure 5). At the same time, the number of researchers per thousand employees in Greece is also low, reaching 4.4 in 2007, compared to 7.4 for OECD country averages and 6.0 for EU27 countries, while the most ‘problematic’ sector refers to businesses, as opposed to higher eduRomania Greece Portugal Cyprus Latvia Lithuania Poland Spain Bulgaria Luxembourg Slovenia Estonia Italy Slovakia Austria Czech Republic Belgium Netherlands Germany France Denmark Hungary United Kingdom Sweden Malta Finland Ireland EU27 0.0
1.0
2.0
3.0
4.0 %
5.0
6.0
7.0
8.0
Figure 5. Employment in technology and knowledge-intensive sectors as a percentage of total employment (1997–2008 average). Source: Eurostat, Annual data on employment in technology and knowledge-intensive sectors at the national level, by gender (1994–2008).
Southeast European and Black Sea Studies
9
Poland Slovakia China Turkey
Italy Portugal Estonia Hungary Switzerland
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Netherlands Spain Czech Rep. U.K. EU27 Russia Slovenia Belgium Ireland Germany OECD Norway France Austria Sweden Iceland Denmark U.S.A. Korea Japan Finland
0
2
4
Business enterprises
6
8
Higher education
10 Government
12
14
Private non-profit
16
18
Unclassified
Figure 6. Number of researchers per thousand employment by R&D performing sector (2007–2008). Source: Compiled by the authors, – data from OECD, Main Science and Technology Indicators Database.
cation, since the relevant figure for Greece equals to 1.31 compared to 4.81 for OECD countries (see Figure 6). These data show that demand for higher education graduates is low in Greece and, in particular, from the private sector. In addition to the relatively low employment levels for graduates, there is the issue of over-qualifications. A survey conducted by Kapa Research (2010) involving graduates aged 22–35 shows that only 54% of them are fully or part-time
Downloaded by [University of Macedonia] at 22:37 20 November 2013
10
L. Labrianidis and N. Vogiatzis
employed in a job relevant to their qualifications and area of expertise. In most of the cases, they are occupied in jobs which do not correspond to the level of their qualifications, a fact that was also empirically confirmed by Lianos (2007), who estimates that over-education represents 40.3% of total employment in Greece (37% for Greeks and 66% for immigrants). This aspect of brain-waste in Greece is also confirmed through the examination of the available data on immigrants’ over-education by the OECD (2008), data which show that the country is listed in first place. These data (see also Dolton and Marcenaro-Gutierez 2009; Patrinos 1997) highlight the fact that investments have been made for professions that are not linked to the needs of the labour market in Greece (Livanos and Pouliakas 2011) or, in other words, that a mismatch is observed between higher education and labour market requirements. Furthermore, as far as unemployment rates are concerned, it is useful to note that the share of tertiary education graduates among the total of unemployed reached almost 12% in 2012 compared to 9% in 1998 (Figure 7), with a clear upward trend after the appearance of the financial crisis in 2009–2010, and while the number of unemployed persons has increased by 137% during this period, the respective change for tertiary education graduates reached 256%. According to data provided by Eurostat, the average unemployment rate for tertiary education graduates aged from 25 to 39 years old was 9.5 in Greece during 1990–2010, while the respective share was considerably lower in the age group 40–64 (4.9%) during the same period. These statistics indicate that young graduates face lower employment opportunities, a case which is similar to that prevailing in other countries of the European ‘periphery’, such as Italy (Becker, Ichino, and Peri 2004). This argument was also confirmed through a study carried out by Karamessini (2008) on sample of 13,600 Greek graduates that received their degree during 1998–2000, five to seven years after their graduation. According to the main findings, 84.2% of the participants were employed, 6.4% were unemployed and 9.3% were economically inactive. However, almost 30% of them were not employed in permanent terms and, as such, could not be considered as having a secure job. This
Figure 7. Contribution of tertiary education graduates in total unemployment – Greece (1998–2012). Note: 2011 data refer to 2nd quarter. Source: Compiled by the authors – data from Hellenic Statistical Authority, Labour Force Survey.
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Southeast European and Black Sea Studies
11
could also explain why 40% have used their postgraduate studies as a strategy to overcome the insecurity barriers and enhance their labour market integration, a finding similar to the one observed for graduates from the Greek Technological Education Institutes (TEI – see Koilias et al. 2010). These data reflect the low utilization of the highly educated labour force in Greece during recent years, a fact which could not be solely attributed to their ‘over-supply’ in the labour market, even though a growing demand for higher education studies has been undoubtedly observed. Another possible explanation could refer to the ‘quality’ of the Greek graduates’ studies in contrast to their ‘quantity’, as Liagouras, Protogerou, and Caloghirou (2003) mention, since the increase in both the eligible students in tertiary education and the respective number of departments/universities could undermine the quality of knowledge and skills that students acquire there (Caloghirou 2010). Moreover, an examination of the most well-known world university rankings4 reveals that – perhaps with the exception of National and Kapodistrian University of Athens – Greek universities do not seem to be placed highly in these hierarchies. However, these facts can explain neither the successful postgraduate studies of (a considerably high number) Greek graduates in Western European and US establishments (Liagouras, Protogerou, and Caloghirou 2003, 424 – see also next Section), as well as their success in receiving some of the world’s most ‘competitive’ scholarships (Aggelopoulos 2011), nor the ‘poor’ performance of Greek graduates of foreign universities who return and seek employment in Greece (Lianos, Asteriou, and Agiomirgianakis 2004). These details, on the one hand, highlight the inadequacy of the aforementioned university rankings to capture the performance of Greek universities accurately, mostly due to the specific biases and drawbacks these metrics embody (cf. Marginson and Van der Wende 2007; Rauhvargers 2011). On the other hand, the general picture regarding the performance of the Greek universities is better than these indexes reveal, since Greece had one of the greatest increase rates in terms of published scientific activity among EU member states and OECD countries during the period 1993–2008, which – in terms of growth rate – was up to 3.98, compared to 1.87 and 1.65 for EU and OECD, respectively (Sachini 2011, 5). At the same time, some universities are very efficient in specific research areas (Caloghirou 2010) and there is a significantly growing number of Greek publications via international collaborations, a figure which represented 38.1% of their total number in 2008 (Sachini 2011, 15), facts which illustrate that the performance of Greek universities, vis-à-vis research, creation of new knowledge and scientific outputs, is far better than the world university rankings reveal. We are, by no means, trying to assert here that Greek universities are efficient in all areas, or that a reform and a revision of their role is not essential, especially in accordance with the heterogeneous returns to alternative academic disciplines that are observed in the labour market (see Livanos and Pouliakas 2011; Mitrakos, Tsakloglou, and Cholezas 2010a, 2010b). It is true that the promotion of an entrepreneurial culture among students has been for long incriminated by the Greek universities, resulting, for example, in an extremely limited number of spin-offs and a lack of entrepreneurial-oriented degrees. Furthermore, a mismatch is apparent regarding the knowledge and skills required by the economy and the ones provided by the higher education system, particularly in specific fields. As Livanos (2009) also argues, based on data from the Greek Labour Force Survey, young graduates from disciplines which are ‘traditionally’ more oriented to jobs in the Greek public
Downloaded by [University of Macedonia] at 22:37 20 November 2013
12
L. Labrianidis and N. Vogiatzis
sector (e.g. Sociology) face poorer employment prospects compared to other disciplines, such as the Computer Science. Despite that, public sector has been for a long serving as the primary source of employment for graduates in Greece, as stated before, given that the most important barrier young graduates face is related to a secure/permanent job in the private sector (Karamesini, 45). Nonetheless, our intention here is to highlight that the underutilization of graduates in Greece could not be only attributed to their growing number and to their ‘poor’ studies; or, in other words, following Liagouras, Protogerou, and Caloghirou (2003, 18), to emphasize also a less cited reason, which is the inability of the Greek economy to keep pace with the strong demand for higher education and the presence of a highly-skilled labour force”. The examination of the research and innovation system in Greece could offer some additional insights to this argument. Specifically, the country is listed in the 19th position among the 27 EU member states in 2010 in terms of innovation performance (PRO INNO EUROPE 2011), compared to the 30th position among 38 countries in 2007, a factor which led to its transition from the ‘catching-up’ to ‘moderate’ innovators. Despite these signs of improvement, Greece has steadily performed below the EU27 average during recent years and this poor innovation record, according to Giannitsis (1993), has been a major determinant of the national economy’s course over time. Greece lags behind most European countries in terms of public expenditures on R&D, an area that remained between 0.60 and 0.80 of the total public expenditures during 1999–2007, in contrast to 1.60 for the EU27.5 However, it is interesting to note that public sector contribution to R&D expenditures is much higher in Greece than those of the EU27, in comparison to private
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Private Sector (%)
Public Sector (%)
EU27
56.8
35.1
Abroad (%) 8.0
Greece
28.3
50.5
21.2
Figure 8. Expenditures on R&D by source of funds (%) – Greece, EU27 (average figures for the period 1999–2005). Source: Compiled by the authors – data from Eurostat, Science and technology, Key indicators – GERD by source of funds (%).
Southeast European and Black Sea Studies
13
Capacity for innovation 140 120 Utility patents per million population
100 80
Quality of scientific research institutions
60 40 20 0 Availability of scientists and engineers
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Gov’t procurement of advanced tech products
Company spending on R&D
University-industry collaboration in R&D
Figure 9. Ranking of Greece on innovation sub-pillars of the GCI. Source: Compiled by the authors – data from WEF (2010).
sector contribution, which was significantly lower in the period 1999–2005 (Figure 8). This fact is also confirmed through a detailed analysis of the country’s performance on the innovation pillar of the GCI (see Figure 9). Specifically, it is evident that the main weaknesses are recorded in the cases of companies’ low spending on R&D and the frail collaboration by the university-industry sector. Conversely, the above data confirm that highly educated population, in the sense of available scientists and engineers, constitutes one of Greece’s most reliable assets. This argument is further supported by other relevant studies (Grant et al. 2011; IMD 2010; Lioukas et al. 2009; Protogerou, Caloghirou, and Siokas 2007), while, as far as ‘higher education and training pillar’ in the Global Competitiveness Index is concerned (World Economic Forum 2010), Greece’s ranking in the 42nd position among 139 countries in 2010 confirms that its graduates represent one of the fundamental strengths in the area of innovative capabilities (see also Lioukas et al. 2009). Hence, even though the impacts of the national research system in the Greek economy are extremely low, owing to the system’s small size in absolute terms and the private sector’s inability to reap the benefits of the new knowledge produced through research projects,6 the scientific personnel involved in this process emerges as a valuable asset, which can further empower the development of R&D activities and innovation in the near future (Protogerou, Caloghirou, and Siokas 2007, 21). Hence, it could be argued that the restricted employment opportunities for young graduates in Greece are also the result of the low demand by the private sector. This could be attributed to the fact that, on the one hand, the Greek educational system has been oriented to preparing graduates that can work on the public sector, but, on the other hand, to the fact that Greek firms are not oriented towards the promotion of knowledge-intensive activities, mostly due to their small size and their family-based structures, factors which also hinder their access to financing. Greek firms present a strong domestic market orientation, combined with the small market size and the informal price agreements between dominant firms in several sectors (e.g. the milk market cartel), facts that prevent them from seeking competitive advantages through innovative activities, thus harming the competitiveness of the national economy. Moreover, the Greek manufacturing industry has
Downloaded by [University of Macedonia] at 22:37 20 November 2013
14
L. Labrianidis and N. Vogiatzis
been based on the production (often through sub-contracting assignments from developed countries) of low-cost products, and for a long time the firms participating in Global Production Networks have postponed their upgrading, that is, the infusion of new technologies, product and scope differentiation (see Labrianidis and Vogiatzis 2011). Thus, investing in new knowledge through the recruitment of a highly educated labour force constitutes a ‘risky’ activity that Greek SMEs cannot afford. However, the current depression creates an urgent reorientation for the economy as a whole, which includes the promotion of these seemingly ‘risky’ activities. After all, the focus on low-cost production is no longer viable for Greek firms, also due to the increasing competition that emerged from Eastern Europe, Turkey, India, Vietnam and, of course, China, areas which are characterized by significantly lower labour costs per unit (Smith et al. 2002). The limited demand for highly educated personnel from the private sector imposes, on the one hand, the vicious cycle of low competitiveness and, on the other hand, combined with the inability of the Greek research system to attract talented researchers and scientists, leads to an extensive outflow of graduates (European Communities 2009, 2). Thus, this cycle is further exacerbated as the country loses this valuable asset. The phenomenon of highly educated population’s migration from Greece has received wider attention during the past year, owing to the financial recession, and, hence, it is also extremely interesting to present some empirical results regarding the profile of these individuals. This analysis is presented in the next section. 3. Migration of highly educated labour force from Greece: an empirical investigation The migration, usually from less developed countries to developed ones, of people endowed with a high level of human capital is usually denoted as a ‘brain-drain’ (Beine, Docquier, and Rapoport 2001, 276), and it has been widely discussed within the frames of the ‘New Growth’ literature (cf. Miyagiwa 1991), which highlights the relation between education, migration and growth. The loss of highly educated population is frequently associated with negative repercussions on the origin countries, in the sense of decreases in the average educational levels (Barro and Sala-Martin 1995) and the loss of public funds invested in the formation of this human capital (Raymond 1973; Straubhaar 2000). This form of migration is particularly crucial for less developed countries that lose their most needed asset in order to foster their development (Glăvan 2008; Skeldon 2008), while rich countries are able to reap most of the benefits, since they receive a skilled labour force in which they have not invested (Docquier, Lowell, and Marfouk 2009, 17–46 and 314), mostly due to higher shares of R&D expenditures (Docquier and Marfouk 2000). Thus, brain-drain may also exacerbate the potential for divergence in the world economy, in terms of distribution of income per capita on a global scale (Mountford and Rapoport 2011). On the other hand, the presence of a highly educated labour force abroad should not be solely viewed as a negative aspect of international migration for less developed countries, since these people form a mobilized asset for them (Meyer 2001). More specifically, the ‘diaspora option’ underlines the importance of expatriates’ networks, which could present an advantage in cases in which countries of origin are connected to them. Thus, combined with the ‘braingain’ option, which predicts long-term positive effects in the case of repatriation
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Southeast European and Black Sea Studies
15
(Hunger 2002), this approach stresses the fact that the negative aspects of the brain drain phenomenon can be – under circumstances – reversed, as the cases of China (Zweig 2006) and Colombia (Meyer et al. 1997) illustrate. While less developed nations and regions around the world (e.g. sub-Saharan Africa, Korea, Jamaica) have received wider attention in regard to the brain drain phenomenon, its magnitude is equally important in the south-eastern regions that shape the ‘periphery’ of Europe (Becker, Ichino, and Peri 2004; Horvat 2004; Vizi 1993). Although placed among the developed countries, Greece also suffers from an extensive loss of its graduates, and it is rather interesting to note that this does not constitute a new phenomenon. A noteworthy outflow of its educated population has been observed since the Second World War , the civil war that followed and during the 1967–1974 dictatorship (Coutsoumaris 1968; Labrianidis 2011; Manitakis 2010; Panourgiá 2009). Recently, however, the interest in this topic has revived, as an impressive increase has been observed regarding the number of graduates who are willing to leave the country due to the ongoing financial recession that further diminishes their opportunities for employment (and not necessarily according to their qualifications).7 It is indicative that while approximately 1,000,000 Europass CVs were completed in Greek during the period 2005–2010, this number reached 60,000 in 2011 and 95,000 in 2012. Thus, Greece presents an exceptionally high growth rate, especially during 2012 (Table 2), while it is interesting to note that a similar trend is observed for other ‘peripheral’ countries as well, following the expansion of the negative effects of the financial crisis across the Eruozone.8 Despite the growing significance of this phenomenon in the case of Greece, there has not been a systematic effort to assess it empirically until now. Our study, presented here, constitutes the first effort to examine the profile and the motives of the individuals involved and link international migration of highly educated labour force with the ongoing financial crisis in the country. 3.1. Methodology of the study and participants’ profile Given the lack of any official data regarding the presence of Greek graduates employed abroad today that could form an accurate sampling frame, our strategy to
Table 2. Annual change (%) of the number of Europass CVs completed online by citizens residing in each country (2008–2012).
Austria France Germany Greece Ireland Italy Portugal Spain Total
2008–2009
2009–2010
2010–2011
2011–2012
30.6 36.6 37.3 44.6 −9.3 37.9 33.5 43.3 32.8
38.9 31.5 16.4 43.9 14.8 52.4 38.4 67.0 41.0
8.6 9.6 −3.0 70.2 13.9 28.8 31.3 34.5 53.9
34.3 27.0 34.3 56.9 55.5 26.6 34.4 35.4 40.4
Source: Compiled by the authors – data from: http://europass.cedefop.europa.eu/europass/home/hornav/ Statistics.csp (accessed 4 April 2013).
Downloaded by [University of Macedonia] at 22:37 20 November 2013
16
L. Labrianidis and N. Vogiatzis
locate them was implemented in two stages: first, an email database was compiled, based on the writers’ personal/professional networks and the available electronic addresses on the Website from universities, research institutes, companies, alumni associations, etc. (1600 addresses in total). Second, individuals who agreed to participate provided us with other potential participants’ emails or forwarded our message to them. Ultimately, more than 2600 email messages were sent by the authors, containing a link to this survey, which involved a semi-structured questionnaire posted on the Website for nine months (15 May 2009–15 February 2010). An accurate estimation of the final response rate is not available, due to the fact that the link to the survey was also posted by the respondents on websites, blogs and social/professional groups’ pages (Hellenic Observatory LSE, Facebook, LinkedIn, etc.). The final sample involved more than 2700 tertiary education graduates, while 1821 questionnaires that were properly completed were finally used to carry out the analysis presented below. This number excludes any second -generation immigrants and refers to Greek graduates with at least one year of experience working abroad. It is worth mentioning that a successful effort was made in order to also locate individuals who have returned to the country (representing 15.8% of the total sample) and formed a control group, a fact that constitutes a unique attribute of this study in the relevant literature. The basic demographic characteristics of the sample are as follows. The majority of participants are males (66%), aged less than 39 years old (64.8%), while more than half of them hold a PhD degree and 36.8% a master’s Degree. It is interesting to note that 40.4% of them have studied (at any level) in one of the world’s top-100 universities (based on the widespread university rankings mentioned above), while the respective share for PhD holders is more impressive, reaching 46.1%! It should be noted, however, that the findings regarding educational levels of the participants should be treated with caution, given that the employed data collection method (snowball technique) does not allow us to generalize all the findings presented here. Even though this constitutes a caveat of the survey, the lack of a database in which Greek graduates abroad could be located imposed this method as the only alternative one. The vast majority of respondents abroad (91%) live today in 10 developed countries (e.g. the USA. the UK Germany and Belgium), and, as a result, ‘global cities’ such as London, New York and Brussels emerge as the most common places of residences for them. In cases in which individuals reported a previous experience of living abroad, studies in a foreign university emerged as the most cited reason (60.2% of this group). 3.2. Results and discussion A very first interesting finding refers to the age at expatriation of these graduates (Figure 10). Most of them left when they were 24–29 years old, but a significant number of them expatriated at the age of 18–23, a fact which, in accordance with the international literature, shows that studies abroad constitute one of the most common reasons for the international migration of graduates also from Greece. The examination of their answers regarding the moment of departure reveals that 42.1% of them left immediately after finishing their undergraduate studies in
Southeast European and Black Sea Studies
17
65.7
70.0
60.0 50.0 40.0 28.0
% 30.0 20.0
5.2
Downloaded by [University of Macedonia] at 22:37 20 November 2013
10.0
0.4
0.7
0.0 <18
18-23
24-29 Age Groups
30-39
40-49
Figure 10. Age at the moment of expatriation (%). Source: Fieldwork data.
Table 3. Motives to work abroad (shares of ‘very important’ reasons). Motive Better career prospects Interesting job-in the field of my expertise Effort to upgrade-update my knowledge in the field of my expertise Satisfactory income Unable to find a job in Greece relevant to the level of my studies Working experience abroad Unable to find a job in my field of expertise in Greece I studied abroad and I stayed there to work Lack of meritocracy/corruption in Greece Life experience abroad-familiarization with different cultures Recognition of my qualifications abroad Other personal/family reasons I wanted to live in a society with higher tolerance towards ‘difference’ Followed my partner Description of friends’ experiences already working there Avoid my military service Dictatorship
% of ‘very important’ 74.8 70.5 60.1 51.8 51.4 46.4 40.3 37.9 33.9 27.6 27.5 17.8 16.6 8.8 7.4 7.2 3.0
Source: Fieldwork data.
Greece, while a noteworthy share (28.0%) after acquiring a work experience in the country, which is an indication of the intensity of the migration of graduates. As far as their motives of expatriation are concerned, respondents were asked to evaluate 12 predefined reasons in terms of their importance, while the opportunity to report any additional reasons that might be of crucial importance was also possible. Their answers (Table 3) show that their career, both in terms of prospects and
Downloaded by [University of Macedonia] at 22:37 20 November 2013
18
L. Labrianidis and N. Vogiatzis
opportunities to work and update their knowledge in the area of their expertise, emerges as the most important motive to migrate abroad. It is interesting to note that satisfactory income did not appear to be as significant as the aforementioned reasons, a fact that illustrates that participants were not primarily driven by financial gains abroad. However, it should be clearly mentioned here again that the survey was carried out in 2009–2010, during a period that the financial crisis’ impacts were not that severe compared to the current situation, while the snowball technique could also affect the validity of these findings. It would be extremely interesting to repeat the survey after 2012, in order to compare the results; this constitutes an area of future research. The fifth most important motive concerns the inability of finding a job relevant to the level of their studies, and, finally, more than one-thire of the sample considers the lack of meritocracy and the existence of corruption as very important factors. These results are aligned with the arguments shaped in the previous section regarding the observed mismatch between graduates’ qualifications and the labour market in Greece, as well as the extent of corruption, which hinder the efforts of those individuals to take advantage of their skills and knowledge. On the contrary, the examination of the factors that facilitated those graduates’ efforts in finding jobs abroad reveals that their qualifications are better recognized there. Specifically (see Figure 11), based on a rating scale from 1 to 3 (18 = not important at all, 3 = very important), both the level and the field of their studies received the highest mean scores. This finding denotes that the mismatch of higher education and the labour market that is apparent in Greece is probably less intense abroad, thus facilitating better employment opportunities for graduates who decide to migrate. Moreover, this indicates that, despite the Greek education system’s inefficacies, the quality of studies cannot be considered as the main reason behind the under-utilization of young graduates in the country. As far as their jobs abroad are concerned, it is interesting to note that expatriates stated that both their first job abroad and their current one is very much related to their expertise, as the respective shares reached 77.0% for the first job abroad and 80.5% for the current one. Furthermore, concerning their annual earnings according to educational level, it is useful to present a direct comparison
Educational level The field of my studies Good language skills The reputation of my university International experience/studies abroad Working experience Being an EU citizen 0.00
0.50
1.00
1.50
2.00
2.50
3.00
Figure 11. Importance (mean scores) of different factors in finding a job abroad (1 = not important, 3 = very important). Source: Fieldwork data.
Southeast European and Black Sea Studies
19
Table 4. Annual earnings according to education level: comparison between those currently employed abroad and those who have returned to Greece. Gross Annual earnings (€)
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Educational level Remain abroad (%) Graduate Degree Master’s Degree PhD Total Returned to Greece (%) Graduate Degree Master’s Degree PhD Total
<25,000
25,000–60,000
>60,000
Total
19.1 12.7 4.8 9.2
49.4 45.2 42.9 44.4
31.5 42.2 52.3 46.4
100.0 100.0 100.0 100.0
43.5 40.9 36.8 39.4
52.1 33.8 51.8 43.1
4.3 25.2 11.4 17.4
100.0 100.0 100.0 100.0
Source: Fieldwork data.
Table 5. Motives that could lead those graduates to return. Reason to return I could find a job in Greece relevant to my qualifications both my partner and I could find a satisfactory job my annual earnings in Greece were equally satisfactory the Greek State recognized the importance of the Greek scientists living abroad If I realized there was a crucial ongoing change in Greece If there was meritocracy/fight of corruption and changes regarding bureaucracy and the Greek mentality I would not return If I was forced to return due to my elder-sick parents Of quality of life and working in Greece was similar to that I enjoy abroad If I was forced to return in order to run our family business If the military service was Greece was not mandatory
If If If If
% of ‘very important’ 63.8 59.2 58.6 50.2 38.6 36.8 29.6 28.9 9.6 5.0 4.0
Source: Fieldwork data.
between expatriates and those who have returned to Greece. This examination (Table 4) reveals a straightforward relationship between these two variables in the cases of graduates living abroad, as opposed to the prevailing situation in Greece. Moreover, a significantly higher share of graduates in Greece receives less than 25,000€ compared to those currently employed abroad. This finding supports the argument that the positive correlation between education and social status, in terms of annual earnings, is less strong in Greece compared to most of other developed countries. Lastly, it is extremely useful to examine how likely these people are to return. Once more, respondents were asked to evaluate seven different factors, while they were encouraged to report any additional factors that might led them to return. This evaluation, presented in Table 5 below, illustrates that the most significant precondition for a Greek graduate to return is again related to a job relevant to his/her
20
L. Labrianidis and N. Vogiatzis
Downloaded by [University of Macedonia] at 22:37 20 November 2013
qualifications. The fact that most of these people are well embedded and familiar with living in a foreign society (they are married with children, they have permanent job positions, etc.) stresses their need to achieve comparable standards of living to those they had abroad, in case they return. In other words, if working positions that cannot ensure a comparable standard of living are not available in Greece, they are more likely to remain abroad. However, as already sketched in the previous sections of this paper, the general picture of the Greek economy shows that these probabilities are extremely low. Therefore, one cannot expect that a significant share of those graduates are likely to return in the near future, but rather that – due to the ongoing crisis – that the migration of graduates will most probably increase. 4. Conclusion and policy recommendations The analysis presented in this paper relates the highly educated human capital and the financial crisis by focusing on the case of Greece. Our main argument is that the underutilization of graduates in the Greek labour market contributed to a significant extent to the accumulated loss of competitiveness of the national economy over time, a factor that in turn created large current account deficits that were matched by private and public debt. At the same time, as an important share of these individuals is likely to seek employment through migration in the near future, owing to this crisis, the country will suffer from a vicious cycle of underdevelopment, since it loses one of the most dynamic elements that could assist its developmental prospects and the escape from it. Hence, a mutually reinforcing relation emerges. An examination of the available statistical data illustrates that the underutilization of highly educated population cannot be only attributed to an over-supply of graduates or to the poor quality of their studies in Greece, but also to the low demand for graduates by the private sector. Greek firms, mostly due to their small size and several other related weaknesses, have been mainly focused on the production of low-cost products and services and avoided any upgrading efforts, including the infusion of technology and innovation, a strategy which is no longer viable on an international level. These characteristics hindered the utilization of a highly educated labour force that could act as an intermediary between universities/research centres and the private sector and, combined with the fact that the Greek R&D system is not able to attract and retain the growing number of qualified scientists despite its satisfactory results, led a significant share of these graduates to migrate abroad, in order to seek employment with better prospects there. Hence, the loss of these graduates is also the result of the Greek economy’s inability to keep pace with their skills and knowledge, which further reduces the levels of competitiveness and the employment prospects for highly educated population in the country. Adding on that, the ‘informality’ of the national economy and specific aspects of the Greek society (e.g. nepotism, familial and cliental links, political instability, and evidences of corruption) has surely affected the relative significance of graduates in the Greek labour market and, even though returns to tertiary education are evident in the country, their magnitude is reduced over time, especially nowadays, during the crisis. Thus, even though the available scientific personnel in Greece appear as one of the most valuable factors in terms of competitiveness capabilities, the country seems to be unable to retain it. Given also the recent developments on
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Southeast European and Black Sea Studies
21
a global scale, which – indicatively– include the increasing mobility of capital (Castles and Miller 2003), the role of multinational companies and organizations (such as the EU common labour market), the familiarization with different cultures and societies via increasing international tourism (Urry 1990; UNWTO 2010) and the developments in transportation and communication technology (e.g. Skype, job mobility portals) that have led to a time-space compression (Harvey 1999), one can expect that migration of highly educated human capital will be further facilitated in the near future, as graduates are able to directly compare and choose between living and working within the ‘national boundaries’ or migrating abroad. In the case of Greece, this comparison is obviously in favour of migration, given the restricted employment opportunities for graduates – and even more so – in the areas of their expertise, combined with aspects of Greek society that create some additional barriers to their social and professional upward mobility. It is worth mentioning here that these indications appear not only in Greece but also to a certain extent in other ‘peripheral countries’, as the recent situation in Italy in particular illustrates. Indeed, similar characteristics regarding both the national economy and society are observed there, as well as an equivalent loss of graduates who decide to migrate abroad. Therefore, a strong necessity emerges, especially during the era of debt crisis, which also imposes a different treatment of this highly educated population. Thus, the recommendations presented below for the case of Greece could form some significant proactive measures for other ‘peripheral’ European countries. In the short-medium term, as our empirical findings demonstrate, we can expect neither a significant share of those expatriates to return nor the loss of graduates from Greece to cease. Despite the biases that the survey’s data collection method embodied, which were discussed above, this finding could be more safely generalized, given the austerity measures that further continuously reduce the standards of living in the country. Therefore, it is crucial to implement straightforward measures in order to moderate the intensity of expatriation of ‘talents’ by creating a more challenging and attractive business environment. These actions could include the provision of subsidies to enterprises (especially micro- and small-sized enterprises) for hiring skilled graduates and science and technology personnel, in order to add value through human capital development. In addition, given the satisfactory research outcomes in the country, it is essential that increased mobility of research and technical personnel among enterprises and research organizations in Greece be enhanced, by gradually including inflows from abroad. These actions could be implemented by creating subsidized working positions in the private sector for graduates involved in international research projects; these individuals can foster the cooperation between the Greek universities/research centers and the private sector, thus fostering the SMEs ability to adopt and utilize research and technological advances. At the same time, it is essential that the country be linked to these expatriates’ professional and scientific networks, by following the ‘diaspora option’. This set of actions could include the promotion of collaboration schemes between both the public and the private sector and those networks abroad, e.g. by creating the opportunities for expatriated Greek scientists to participate in research projects in Greece or by offering Greek professors abroad the chance of dual appointments9 or by promoting cooperation in the private sector in the form of educational and training seminars by invited professionals. Furthermore, the role of alumni associations
Downloaded by [University of Macedonia] at 22:37 20 November 2013
22
L. Labrianidis and N. Vogiatzis
could be also promoted, in order to establish effective links between graduates who either continue their studies or work abroad. Thus, the creation of an experts’ network abroad will be enhanced, which will facilitate the linkage between expatriates and the country of origin. In the long run, we believe that the country must seek an alternative developmental path which should clearly involve moving away from low-cost competition on the international level – which is no longer viable, as the performance of Greek exports illustrate, combined with the rising competition from eastern European and Asian countries – and focus on innovation and product differentiation. At the same time, the Greek State must publicly and formally recognize the fundamental value of this human capital and encourage the creation of a more meritocratic labour market, in order to ensure that this highly educated labour force not only is employed according to its skills and knowledge, but also occupies a central role in the Greek administrative/political system and the decision-making centers. Adding on that, an educational reform that could aim to reduce the mismatch between skills/qualification of graduates and the labour market’s need could also produce positive results. Last but not least, we cannot ignore the current situation in the country, as Greece today faces the threat of a disorderly default and an exit from the Eurozone. None of the above suggestions is possible if the country is not able to face the current debt crisis immediately, in the sense of reaching a viable solution for paying off its debt. The country must also control its painful public deficits in the near future, while a major challenge remains as far as the reorientation and the boosting of competitiveness of its economy is concerned. We do hope that the recognition of the presence of a highly educated and competent labour force in the country, as well as of Greeks that are pursuing excellent carriers all over the world, will lead companies to decide that it is to the best of their interests to try to reap the benefits of the skills and knowledge embodied in them. This can form an escape route from the crisis and an ‘alternative’, knowledge-based developmental path today and tomorrow respectively, not only for Greece, but also for other countries of the EU. Notes 1. See http://glossary.uis.unesco.org/glossary/en/term/2048/en. 2. The declining returns to higher education could be also attributed to the fact that in the 1980s the Greek government implemented, first, a generous increase in the minimum wage that affected mainly non-tertiary education graduates and, second, a ‘sliding wage scaling’ that affected adversely the upper part of the earnings distribution, where most higher education graduates are usually found, thus creating a significant compression in the distribution of wages (Tsakloglou and Cholezas 2001). 3. There were 300,906 university graduates registered as employees in the public sector in July 2010 (public sector census 2010: see http://apografi.gov.gr/2010/07/379) in a total of 889,600 tertiary education graduates who were employed in Greece during the second quarter of the same year (data from Labour Force Survey: http://www.statistics. gr/portal/page/portal/ESYE/PAGE-themes?p_param=A0101). 4. For example, Times-SQ (http://www.topuniversities.com/university-rankings/world-university-rankings/home) and Academic Ranking of World Universities by the Shanghai Jiao Tong University (http://www.arwu.org). 5. See Eurostat: Total GBAORD (Government Budget Appropriations or Outlays on R&D) as a % of total general government expenditure. 6. Greece presents a strong and steady participation in the European FrameworkProgrammes (FP) during the period 1984–2006. Financing through the FP6 for Greece corresponds to 2.26% of the framework’s total budget, while it represents more than
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Southeast European and Black Sea Studies
23
10% of the total R&D expenditures in Greece, this being one of the highest figures in Europe (European Communities 2009, 30). Thus, the minimal collaboration between universities/research centers and firms could be primarily attributed to the latter’s inability to take advantage of the research outcomes. 7. cf. http://www.dw-world.de/dw/article/0,,15,291,125,00.html. 8. It should be noted here that these data may be misleading in two ways. First, it is possible that they simply reflect differences regarding the ‘penetration’ of this type of CVs between the European countries. Second, they do not include tertiary education graduates only. However, given that this segment of the labour force is more familiar with ICT applications, such as the Internet and the job mobility portals, we can treat these data as representative of the likelihoods of migration of highly educated-individuals and, surely, not as evidences of migration per se. 9. It should be noted that some of these measures will be promoted through the recent Law 4009/2011 (e.g. dual appointments), while a recent state funded research programme (‘Thales’), encouraged the participation of Greek researchers from foreign universities/research centers.
Notes on contributors Lois Labrianidis is a professor in the Department of Economic Sciences, University of Macedonia Greece; as well as founder and head of the Regional Development and Policy Research Unit. He is an economic geographer (MA, Sussex, PhD, LSE) and has done research and published on topics such as industrial location, the spatial aspects of subcontracting, the economic implications of peripheral universities on their locality, development of rural areas/rural entrepreneurship, delocalization of economic activities/foreign direct investment, economic consequences of immigration and economic consequences of highly skilled migration (brain drain). Nikos Vogiatzis is a member of the RDPRU. He graduated from the Department of International & European Studies, University of Macedonia in 2001, where he also pursued his postgraduate studies and obtained a master’s degree in Business Administration in 2004. He has been awarded a PhD (2013) from the Department of Planning and Regional Development at the University of Thessaly, on the spatial and economic aspects of Tourism Global Value Chains in the case of Greek mass tourism destinations. His wider research interests concern tourism development, migration, firms’ internationalization and restructuring processes.
References Aggelopoulos, G. 2011. Higher Education Institutes: Success outside Greece and demerit in Greece. Avgi/Enthemata, July 24. [in Greek]. Arrow, K.J. 1962. The economic implications of learning by doing. The Review of Economic Studies 29, no. 3: 155–73. Barro, R.J., and X. Sala-Martin. 1995. Economic growth. New York: McGraw-Hill. Becker, S.O., A. Ichino and G. Peri 2004. How large is the ‘brain drain’ from Italy? Giornale degli Economisti e Annali di Economia 63, no. 1: 1–32. Beine, M., F. Docquier, and H. Rapoport. 2001. Brain drain and economic growth. Journal of Development Economics 64, no. 1: 275–289. Caloghirou, Y. 2010. Greek university: A factory of university degrees or a vehicle of change towards the knowledge economy and society? In The university today, ed. A. Dimitropoulos, Ν. Maravegias, and Α. Mitsos, 184–90. Athens: Themelio. [in Greek]. Castles, S., and M.J. Miller. 2003. The age of migration. New York: Guilford Press. Christodoulakis, N. 2010. Crisis, threats and ways out for the Greek economy. Cyprus Economic Policy Review 4, no. 1: 89–96. Cohen, D., and M. Soto. 2007. Growth and human capital. Journal of Economic Growth 12, no. 1: 51–76.
Downloaded by [University of Macedonia] at 22:37 20 November 2013
24
L. Labrianidis and N. Vogiatzis
Coutsoumaris, G. 1968. Greece. In The brain drain, ed. W. Adams, 166–82. New York: MacMillan Press. Crotty, J. 2009. Structural causes of the global financial crisis. Cambridge Journal of Economics 33, no. 4: 563–80. De Grauwe, P. 2010. Crisis in the eurozone and how to deal with it. CEPS Policy Brief 204, February. http://www.ceps.be/book/crisis-eurozone-and-how-deal-it (accessed November 4, 2011). Docquier, F., B.L. Lowell, and A. Marfouk. 2009. A gendered assessment of highly skilled emigration. Population and Development Review 35, no. 2: 297–321. Docquier, F., and A. Marfouk. 2000. International migration by educational attainment (1990–2000). In International migration, remittances and the brain drain, ed. C. Özden and M. Schiff, 151–99. New York: Palgrave Macmillan. Dolton, P., and O. Marcenaro-Gutierez. 2009. Overeducation across Europe. In Education and inequality across Europe, ed. P. Dolton, R. Asplund, and E. Barth, 67–90. Northampton, MA: Edward Elgar. Doxiadis, A. 2011. Keynote Speech at the conference on What should we do? Greece 2011: Dilemmas and prospects, July 6, in Athens, Greece. Driouchi, A., E.M. Azelmad, and G.C. Anders. 2006. An econometric analysis of the role of knowledge in economic performance. The Journal of Technology Transfer 31, no. 2: 241–55. European Communities. 2009. ERAWATCH research inventroy report for: Greece. Brussels: DG Joint Research Centre. http://cordis.europa.eu/erawatch/index.cfm?fuseaction=reports. content&topicID=600&parentID=592 (accessed October 23, 2011). Featherstone, K. 2011. The Greek sovereign debt crisis and EMU. Journal of Common Market Studies 49, no. 2: 193–217. Florida, R.L. 2002. The rise of the creative class. New York: Basic Books. Giannitsis, T., ed. 1993. Industrial and technology policy in Greece. Athens: Themelio. [in Greek]. Giwa, T.O. 2000. Human capital evolution and economic crisis: Minding ‘the gap’. Discussion papers in Economics 9. Royal Holloway: University of London. Glăvan, B. 2008. Brain drain: A management or a property problem? American Journal of Economics and Sociology 67, no. 4: 719–37. Grant, J., T. Ling, D. Potoglou, and D.M. Culley. 2011. A rapid review of the Greek research and development system. Cambridge, Athens: RAND Europe for the Greek Ministry of Education, Lifelong Learning and Religious Affairs. http://www.rand.org/ pubs/documented_briefings/DB631.html (accessed October 10, 2011). Hadjimichalis, C. 2011. Uneven geographical development and socio-spatial justice and solidarity. European Urban and Regional Studies 18, no. 3: 254–74. Harvey, D. 1999. Time-space compression and the postmodern condition. In Modernity: Critical concepts, ed. M. Waters, 98–118. London: Routledge. Horvat, V. 2004. Brain drain. Threat to successful transition in South East Europe. Southeast European Politics 5, no. 1: 76–93. Hunger, U. 2002. The ‘brain gain’ hypothesis, Working Paper. Center for Comparative Immigration Studies, University of California, San Diego. IMD. 2010. World competitiveness yearbook. Lausanne: International Institute for Management Development. http://www.imd.org/research/publications/wcy/index.cfm (accessed October 20, 2011). Jones, C.I. 2002. Sources of US economic growth in a world of ideas. The American Economic Review 92, no. 1: 220–39. Kanellopoulos, K.N. 1997. Pay structure in Greece 1974–1994. Athens: Centre of Planning and Economic Research. [in Greek]. KAPA Research. 2010. Young graduates in Greece and the new migration. Kapa Research – To BHMA, Athens. http://www.kapa-research.com/Default.aspx?tabid=95 (accessed October 30, 2011). Karamessini, M. 2008. The absorption of university graduates in the labour market. Athens: Network of the Career Offices of Universities and Dionicos. [in Greek]. Katsanevas, T. 2002. Professions of the future and the past. Athens: Patakis. [in Greek].
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Southeast European and Black Sea Studies
25
Katsios, S. 2006. The shadow economy and corruption in Greece. South-Eastern Europe Journal of Economics 1: 61–80. Koilias, C., E. Tourna, A. Garmpis, S. Retiniotis, and B. Tolis. 2010. Following the employment of graduates of Greek Technological Educational Institutes. Athens: New Technology Publishing. Kourtessis, A. 2008. Creative cities and Thessaloniki. In Thessaloniki on the verge, ed. G. Kafkalas, L. Labrianidis and N. Papamichos, 267–93. Athens: Kritiki. Labrianidis, L. 2011. Investing in leaving: The Greek case of international migration of professionals. Athens: Kritiki. [in Greek]. Labrianidis, L., and N. Vogiatzis. 2011. Local delocalization across borders. Journal of Borderlands Studies 26, no. 1: 35–51. Lambropoulos, H., and G. Psacharopoulos. 1992. Educational expansion and earnings differentials in Greece. Comparative Education Review 36, no. 1: 52–70. Lapavitsas, C., G. Lambrinidis, D. Lindo, J. Meadway, J.P. Painceiria, J. Powell, A. Stenfores, and N. Teles. 2010. The eurozone between austerity and default. Research on Money and Finance. http://www.researchonmoneyandfinance.org/media/reports/RMF-Eurozone-Austerity-and-Default.pdf (accessed September 12, 2011). Liagouras, G., A. Protogerou, and Y. Caloghirou. 2003. Exploring mismatches between higher education and the labour market in Greece. European Journal of Education 38, no. 4: 413–26. Lianos, T.P. 2007. Brain drain and brain loss: Immigrants to Greece. Journal of Ethnic and Migration Studies 33, no. 1: 129–40. Lianos, T.P., D. Asteriou, and G. Agiomirgianakis. 2004. Foreign university graduates in the Greek labour market. International Journal of Finance & Economics 9, no. 2: 151–64. Liargovas, P. 1998. The white paper on growth, competitiveness and employment and Greek small and medium sized enterprises. Small Business Economics 11, no. 3: 201–14. Lioukas, S., E. Voudouri, A. Gouras, and P. Latzouni. 2009. Innovation in Greece. Athens: Kokkalis Foundation – Athens University of Economics. http://www.kokkalisfoundation. gr/page.ashx?pid=5&aid=51&cid=29&qcid=44 (accessed October 9, 2011). Livanos, I. 2009. The relationship between higher education and labour market in Greece: The weakest link? Institute for Employment Research, University of Warwick. http:// mpra.ub.uni-muenchen.de/16239/1/MPRA_paper_16239.pdf (accessed March 18, 2013). Livanos, I., and K. Pouliakas. 2011. Wage returns to university disciplines in Greece. Education Economics 19: 411–45. Lucas, R.E. 1988. On the mechanics of economic development. Journal of Monetary Economics 22, no. 1: 3–42. Lundvall, B.A., and S. Borrás. 1999. The globalising learning economy. Bruxelles: DG XIITSER, European Commission. ftp://ftp.cordis.lu/pub/tser/docs/globeco.doc (accessed September 12, 2011). Makridakis, S., Y. Caloghirou, L. Papagiannakis, and P. Trivellas. 1997. The dualism of Greek firms and management. European Management Journal 15, no. 4: 381–402. Manitakis, N. 2010. Foreign public scholarships: Students’ migration during the civil war. In The history of Greece during the 20th century, ed. C. Chatziosif, 133–57. Athens: Vivliorama. [in Greek]. Mankiw, N.G., D. Romer, and D.N. Weil. 1992. A contribution to the empirics of economic growth. The Quarterly Journal of Economics 107, no. 2: 407–37. Marginson, S., and M. Van der Wende. 2007. To rank or to be ranked. Journal of Studies in International Education 11, no. 3–4: 306–29. Meyer, J.B. 2001. Network approach versus brain drain. International Migration 39, no. 5: 91–110. Meyer, J.B., J. Charum, D. Bernal, J. Gaillard, J. Granés, J. Leon, A. Montenegro, et al. 1997. Turning brain drain into brain gain: The Colombian experience of the diaspora option. Science, Technology and Society 2 no. 2: 285–315. Mitrakos, T.M., P. Tsakloglou, and I. Cholezas. 2010a. Determinants of the wage rates in Greece with an emphasis on the wages of tertiary education graduates. Economic Bulletin 34: 7–40.
Downloaded by [University of Macedonia] at 22:37 20 November 2013
26
L. Labrianidis and N. Vogiatzis
Mitrakos, T.M., P. Tsakloglou, and I. Cholezas. 2010b. Determinants of youth unemployment in Greece with an emphasis on tertiary education graduates. Economic Bulletin 33: 21–62. Miyagiwa, K. 1991. Scale economies in education and the brain drain problem. International Economic Review 32, no. 3: 743–59. Mountford, A., and H. Rapoport. 2011. The brain drain and the world distribution of income. Journal of Development Economics 95: 4–17. Nelson, R.M., P. Belkin, and D.E. Mix. 2010. Greece’s debt crisis. Congressional Research Service. http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA517744&Location=U2&doc= GetTRDoc.pdf. (accessed October 17, 2011). Nielsen, P., and B.A. Lundvall. 2003. Innovation, learning organizations and industrial relations. Working Paper 03–07. Danish Research Unit for Industrial Analysis. OECD. 1996. The knowledge-based economy. Paris: OECD. OECD. 1997. Reviews of national policies for education: Greece. Paris: OECD. OECD. 2008. A profile of immigrant populations in the 21st century: Data from OECD countries. Paris: OECD. Pagoulatos, G., and D. Mpourikos. 2006. The outline of the study on the Departments of Economics and Management. In Study on tertiary education in Greece, ed. Hellenic Foundation for European & Foreign Policy. Athens: Hellenic Foundation for European & Foreign Policy. http://www.eliamep.gr/wp-content/uploads/2008/07/chapter12.pdf. Panourgiá, N. 2009. Dangerous citizens: The Greek left and the terror of the state. New York: Fordham University Press. Patrinos, H.A. 1997. Overeducation in Greece. International Review of Education 43, no. 2: 203–23. Pavlopoulos, P. 2002. Shadow economy in Greece. Athens: Research Institute for Tourism. http:// www.grhotels.gr/GR/xee/ITEP/DocLib2/Forms/itemview.aspx?ID=58 (accessed November 1, 2011). Pelagidis, T., and M. Mitsopoulos. 2011. Understanding the crisis in Greece: From boom to bust. Basingstoke: Palgrave Macmillan. Pesmazoglu, S. 1994. Government, ideology and the university curriculum in Greece. European Journal of Education 29, no. 3: 291–304. PRO INNO EUROPE. 2011. INNOVATION UNION SCOREBOARD 2010. Brussels: European Commission – PRO INNO EUROPE. http://www.proinno-europe.eu/sites/default/ files/docs_EIS2010/IUS_2010_final.pdf (accessed October 20, 2011). Protogerou, A., Y. Caloghirou, and E. Siokas. 2007. The participation and role of Greek research actors in the context of EU-funded research programmes (1984–2006). Paper presented at the Conference of Chemical Engineering (Section of Economics and Business), May 31– June 1, in Athens, Greece. Rauhvargers, A. 2011. Global university rankings and their impact. Brussels: European University Association. Raymond, R. 1973. The interregional brain drain and public education. Growth and Change 4, no. 3: 28–34. Romer, P.M. 1986. Increasing returns and long-run growth. The Journal of Political Economy 94, no. 5: 1002–1037. Sachini, E. (scientific coordinator). 2011. Greek scientific publications 1993–2008. Athens: National Documentation Centre/National Hellenic Research Foundation. http://www.ekt. gr/en/metrics/GreekScientificPublications_EKT_en.pdf (accessed November 2, 2011). Schneider, F., A. Buehn, and C.E. Montenegro. 2010. Shadow economies all over the world. World Bank. http://www.econ.jku.at/members/Schneider/files/publications/LatestResearch2010/SHADOWECONOMIES_June8_2010_FinalVersion.pdf. Scott, A.J. 2004. Cultural-products industries and urban economic development. Urban Affairs Review 39, no. 4: 461–490. Skeldon, R. 2008. International migration as a tool in development policy. Population and Development Review 34, no. 1: 1–18. Smith, A., A. Rainnie, M. Dunford, J. Hardy, R. Hudson, and D. Sadler. 2002. Networks of value, commodities and regions. Progress in Human Geography 26, no. 1: 41–63. Spraos, J. 1997. Some thoughts on the role of the manufacturing sector. Athens: SAMISDAT.
Downloaded by [University of Macedonia] at 22:37 20 November 2013
Southeast European and Black Sea Studies
27
Stathakis, G. 2011. Keynote Speech at the Conference on What should we do? Greece 2011: Dilemmas and prospects, July 6, in Athens. Storper, M. 1995. The resurgence of regional economies, ten years later. European Urban and Regional Studies 2, no. 3: 191–221. Straubhaar, T. 2000. International mobility of the highly skilled. Discussion Paper 88. Hamburg, Germany: Hamburg Institute of International Economics. Supiot, A. 2010. A legal perspective on the economic crisis of 2008. International Labour Review 14, no. 2: 151–62. Tsakloglou, P., and I. Cholezas. 2001. Greece. In Education and earnings in Europe, ed. C. Harmon, I. Walker and N. Westergaard-Nielsen, 129–145. Cheltenham: Edward Elgar. Tsoukalas, K. 1982. Dependence and reproduction: The social role of educational mechanisms in Greece (1830–1922). Athens: Themelio. [in Greek]. UNWTO. 2010. International Tourism. UNWTO Press Releases. http://www.unwto.org/ media/news/en/press_det.php?id=5912 (accessed April 15, 2010). Urry, J. 1990. The tourist gaze. London: Sage. Varoufakis, Y. 2011. Keynote Speech at the Conference on What should we do? Greece 2011: dilemmas and prospects, July 6, in Athens, Greece. Vizi, E.S. 1993. Reversing the brain drain from Eastern European countries. Technology in Society 15, no. 1: 101–9. Williams, A.M., and V. Baláž. 2008. International migration and knowledge. London: Routledge. World Economic Forum. 2010. The Global competitiveness report 2010–2011. Geneva: WEF. The Economist. 2010. Tax evasion. http://www.economist.com/node/16792848 (accessed October 31, 2011). Zweig, D. 2006. Competing for talent: China’s strategies to reverse the brain drain. International Labour Review 145, no. 1–2: 65–90.
