The biggest economic difference between emigrants in the current sample and Russian emigrants in the E.U. is the number of respondents indicating that their primary source of income is located in the host country. In the E.U., this figure is 79%, whereas in the CIS and Serbia, it is 37%. Conversely, only 23% of the respondents in the current sample have a source of income in Russia, compared to just 9% of immigrants in the E.U. The study revealed an unexpectedly high (31%) share of Russian emigrants whose main income source is in “another country,” i.e., neither Russia nor the host country. This peculiarity is explained by the high proportion of IT professionals in the sample: 42% of the respondents versus 26% among the immigrants in the E.U.
On the one hand, such a difference makes migrants in “transit countries” much less attached to the host country and more interested in local issues. On the other hand, they less compete with local residents in the labor market and represent a pure source of external currency inflows and additional demand for goods and services for the host economies.
Respondents in the current study are noticeably poorer than the Russian immigrants in the E.U. This is particularly evident among those with monthly incomes exceeding $10,000 and in responses regarding the size of assets in Russia. Migrants in the “transit zone” less frequently purchase real estate and cars, although it is difficult to determine whether this is due to financial limitations or less certainty about plans to stay in the host country.
Despite their relative poverty compared to Russian emigrants in the EU, respondents from the “transit zone” are significantly more affluent than the local populations of the host countries. According to the data, the average household income of Russian immigrants in Serbia is about €3,500 versus around €900 on average in Serbia. The average household income of Russian immigrants in Georgia is €3,300, compared to roughly €650 for the locals. This statistic increases the economic value of Russian immigrants for the host countries as consumers, especially in the upper segment of the service market, where Russian immigrants often set new standards for quality and consumption standards.
A year ago, as we surveyed the Russian diaspora in the E.U, we were still quite surprised by the data on the education level of Russian immigrants, which significantly exceeded the average indicators both for Russia and for E.U. countries. This time, we were better prepared for the obtained results. However, comparisons with the indicators of the host countries are still impressive enough. According to the 2022 census, 22.4% of workers in Serbia have a college degree. Among the Russian immigrants in that country, this figure is 75%. In Georgia, only 35% of workers are college-educated, while among the Russian immigrants in Georgia, the number is 69%.
The inflow of high-skilled personnel generally has a positive impact on the economy of the host country. However, unlike E.U. countries where there is high demand for qualified labor, it is not a given that the economies of relatively poorer CIS countries can offer adequate vacancies for newcomers and fully utilize their potential. An exception to this rule is the IT industry, where immigrants often maintain existing businesses with clients from third countries.
The influx of migrants from Russia has accelerated the economic dynamics of the host countries. For example, the average annual GDP growth rate in Georgia from 2012 to 2021 was 4.4%, and during the three war years, 2022–2024, it was 9.4%. The GDP growth in Armenia was 3.6% and 9%, respectively. The average pace of economic growth after 2022 increased in all the countries under consideration; however, changes within 1%–2% cannot be unambiguously attributed to the migration factor. The arrival of Russians also caused other consequences: an 11–23% increase in the local currencies’exchange rates against the dollar during the first year2, a rise in inflation rates, and an increase in real estate prices, especially noticeable in the capitals of relatively poorer countries.
2 — See Exchange Rates: History of USD to AMD Exchange Rates in 2022, Exchange Rates: History of USD to GEL Exchange Rates in 2022.
Russian immigrants, especially those moving to the poorest CIS countries, are fiscally favorable for the budgets of the host countries. With rare exceptions, they do not receive social benefits, yet all of them pay indirect taxes, and some (particularly in Serbia) also pay direct taxes.
Like any large-scale social phenomenon, relocation has both benefits and a number of problems that are primarily intrinsically social rather than economic. The main among them is the sharp increase in housing rental and purchase prices in the host countries. This was particularly acute as of late 2022 in Georgia and Armenia, but it is also characteristic of other countries where the number of Russian emigrants relative to the local population is significant. In particular, rental prices for apartments in Armenia increased by 47% from the beginning of 2022 to mid-2023, and in Georgia by 62%3. Despite the direct medium-term economic benefits this process lends to the host countries (some become landlords, others work in construction, and the budget gains additional revenue from all this), the majority of the population in the host countries is unable to perceive the long-term benefits and only sees the current price hikes, which they rightly attribute to the relocated individuals.
3 — See Geostat: Inflation Rate in Georgia, December-2022, World Bank: GEORGIA MONTHLY ECONOMIC UPDATE — FEBRUARY 2024.
Another factor is the, on average, higher income of those coming from Russia and their habit of consuming higher-quality services. These factors lead to a disproportionately high concentration of relocators in certain areas associated with prestigious consumption: from restaurants and fitness centers to private schools. Suddenly, these places become fully booked, and prices sharply increase. Aside from the general social sentiment of the poor toward the wealthy, it is precisely in such locations that the perception of “they’ve come in droves” and “they’ve taken over” is rife.
Nonetheless, considering all factors, for transit countries and, to a lesser extent, for E.U. countries, Russian emigration brings far more economic and social benefits than drawbacks.