Migration to Cyprus set to rise

The Economics Research Centre of the University of Cyprus published a study in 2009 entitled ‘Immigration in Cyprus: An analysis of the determinants’. Researchers followed an econometric approach, analysing the factors involved in immigration to Cyprus. The results confirm the significance of some non-economic factors, particularly a common language, distance from origin and ‘network effects’. Researchers also closely examined unemployment rates and income levels.

Migration facts in Cyprus

Since 1983 Cyprus has been a magnet for immigrants from many countries, especially since its accession to the European Union. Since then, Cyprus has experienced unprecedented levels of migration. According to the Cyprus Statistical Service, migrants made up 4.43% of the labour force in 2004. The majority of migrants come from Greece, Russia, Sri Lanka and the United Kingdom. Other EU countries of origin are Bulgaria and Romania. Greek migration to Cyprus is the greatest because of the strong cultural and linguistic bonds between the two countries. It is obvious that economic and non-economic factors play an important role in migration to Cyprus.

Economic factors

The authors of the report (217Kb PDF), based at the Economics Research Centre (CypERC) of the University of Cyprus, assessed economic factors such as income gaps, unemployment and labour market conditions. They found that income gap is an important element of the decision to migrate, especially for countries whose GDP per capita is much lower than that of Cyprus, such as Poland, Russia and Sri Lanka. A lower unemployment level is also thought to attract jobseekers from countries with higher levels of unemployment. However, the analysis shows a weak association of this factor, since the data are based on the number of registered unemployed individuals and the official unemployment rate is generally significantly lower than the actual rate. Countries like Greece, Poland, Russia and Sri Lanka certainly have higher real unemployment rates than Cyprus. The study also contradicts the hypothesis that people tend to migrate from one country to another in search of better working conditions; labour market conditions, or relative conditions, are not found to be very significant. However, the most likely explanation for this is the poor reliability of the official unemployment data in the countries of origin and, in most cases, underestimations of unemployment levels due to the absence of any meaningful social protection in many of the countries.

Non-economic factors

The authors also examined reasons for migrating, such as political stability, weather conditions, language, the distance to the country of origin, and network effects (friends or family who live in Cyprus). They found that:

• countries with the greater number of immigrants to Cyprus are spread worldwide and include Sri Lanka, the UK, Russia, Poland and Greece;

• Cyprus does not have a higher number of immigrants from neighbouring, relatively poor countries such as Egypt, Lebanon and Syria;

• there is no evidence of political factors in the countries of origin being key determinants of migration to Cyprus and differences in the degree of political stability are not found to be a significant determinant of migration;

• there is no statistical evidence that weather conditions are important, something which is puzzling given the strong presence, and continuing arrival, of UK nationals.

More specifically, using the average temperature data, authors calculated the (absolute) differences in temperatures between Cyprus and the migrants’ countries of origin. The data for this came from the Climatic Research Unit of the University of East Anglia.

Commentary

Overall the study has highlighted known evidence regarding migration to Cyprus. The authors predict that since the income gap will continue to grow in relation to very poor countries, immigration from these countries will continue to rise in the next 10–20 years. However, flows from the more prosperous countries, especially in the EU such as Romania and Bulgaria, will gradually taper off. The finding of strong network effects, however, also suggests that changes in the composition of immigrants in Cyprus will be more gradual. The authors conclude that, as the economy continues to expand, immigration will continue to be a major engine of growth.

Polina Stavrou, Cyprus Labour Institute (INEK-PEO)