Almost half of foreign workers exited the labour market after a period of between one and two years, a study by the Central Bank has found.
A 2019 policy note by the Central Bank found that between 2002 and 2017, 25 per cent of foreign workers left the labour market within the same year they were employed and 45 per cent after between one and two years. Only 30 per cent remained employed in the Maltese labour market for more than six years after their first engagement, the study found.
The amount of foreign workers has been the subject of much political debate recently.
Prime Minister Joseph Muscat has gone as far as declaring that those who did not want foreign workers in Malta would also be turning their back on economic growth and social measures like pensions.
Jobsplus chief Clyde Caruana said during a recent interview with The Sunday Times of Malta that the country would require another 13,000 foreign workers this year alone to maintain the economic growth.
When comparing Malta’s migration flows to those experienced by other European countries, the Central Bank found that the island had a dual phenomenon of large migrant inflows and outflows.
It had the second largest immigration rate in 2015 but, that same year, Malta experienced the third highest re-emigration rate.
Since migration to Malta in the last few years was mostly related to work opportunities, the large flows suggested that while the country had managed to attract a large number of foreign workers, their length of stay was rather short, the Central Bank noted.
The average length of stay of foreign workers is three-and-a-half years, relatively unchanged since 2012.
Exit rates had limited evolution over time and indeed remained quite high throughout the period 2002 to 2017, the study said.
Non-EU nationals were found to stay in the labour market for longer than foreign workers from the EU.
The exit rate of European Union nationals was said to be six per cent higher than those of third country nationals during the first year of employment. The exit rates converged over longer durations.
Foreign workers in Malta tended to be quite young, as 27 per cent employed between 2002 and 2017 were under 25 and 43 per cent fell into the 25 to 34-year age bracket.
In general, those in the youngest age brackets tended to have the lowest length of stay.
The highest skilled foreign workers tended to have a longer length of stay but the results were mixed when comparing low- and medium-skilled employees, the study noted.
The high exit rates meant it was difficult for their wages to converge with those of the native population.
Very few foreign workers change their job or improve their employment occupation while in Malta.
The lack of labour mobility within the Maltese labour market, in turn, posed challenges to labour productivity growth as firms had to consistently hire new workers, with limited gains from ‘learning-by-doing’, the Central Bank said.