Foreign workers have flooded into Malta in recent years, but according to a new study they are also quick to leave.
According to the Central Bank, a quarter of foreigners working in Malta leave the island within the first year of arriving here.
This figure climbs up to nearly half by the second year they are on the island. And by the sixth year, only one in three foreigners remain here.
The study sheds light on the contentious issue of the influx of foreign labour.
While arrivals were climbing, Malta’s outward-migration rate was more pronounced than that observed in other advanced economies.
According to the Organisation for Economic Co-operation and Development, less than a third of migrants either return to their home country or move elsewhere five years after their arrival.
By contrast, around half of the foreign workers in Malta exit the Maltese labour market within just two years of their arrival.
Where do they come from?
Due to country’s access to the European single market, around 70 per cent of foreign workers originate from the European Union, while just 30 per cent are third country nationals.
EU nationals generally tend to stay for slightly shorter periods than others. Skill seems to be positively correlated with length of stay, the Central Bank found.
The lowest skilled workers have the shortest duration of stay, while highly-skilled workers have the lowest exit rate – staying here far longer.
However, those considered medium-skilled also have pretty high exit rates.
Foreign workers employed in services and sales have the highest exit rates at the shortest duration, which the bank says was probably because they are engaged in the accommodation sector, which is seasonal and volatile.
Managers maintain the lowest exit rates, while those employed as plant and machine operators have the highest exit rates.
Maltese firms are predominantly small- and medium-sized enterprises, but micro firms employing less than 10 workers, have the lowest exit rates across the different durations.
One would expect, the study says, the length of stay for foreign workers in Malta would fluctuate depending on the economy.
The relatively short length of stay of foreign workers in Malta, however, limits the scope for them to experience “economic assimilation” into the broader workforce – in other words their wages do not come into line with those of the Maltese.
“It is likely that since foreign workers tend to be relatively young and stay for a short period of time, the rate of economic assimilation in Malta is rather low,” the study says.
The process of constantly selecting and hiring workers, as a result of the high level of labour turnover, also puts significant pressure on the human resource departments in local firms.
Furthermore, firms were often unable to hire foreign workers who had already obtained experience in the Maltese job market, and were instead constrained to consistently hire workers who did not already live here. Since foreign workers tended to exit the labour market very rapidly, it also posed limitations on learning-by-doing, which in turn could negatively impact the island’s economy.
The relatively short length of stay by migrants, however, could also have its advantages.
Despite the costs related to hiring and training, new employees were more likely to bring new ideas to the table. In fact, they were linked to increased innovation and productivity.
Moreover, a relatively short length of stay could also have a positive impact on public finances.
They were contributing more towards government coffers in taxes than they were taking out in the use of public services.
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