Why do Ukrainian students study and work abroad

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How doest it feel like to be Ukrainian student

I'm a student of the 5th course, finishing my M.A. This year in International Economic relations.

Does it sound good, encouraging.

I should probably write about my future expectations, wide range of possibilities that lies wide open, but write about youth migration, brain drain and wasted human capital in Ukraine.

You ask me why?

I'm a participant of numerous student conferences, awarded with

During a few years of study, Lyubov was awarded numerous diplomas and certificates which signify her outstanding performance on different events. Her personal achievements are not confined to a local level

But the only question I'm asking myself for the last year is: where can I find a job? Can I continue my research with a PhD.

Does Ukraine need it?

Besides loud declarations about the youth year, year of science and research proclaimed in UA, I see no changes and as a matter of fact no possibilities:

Let me give you a simple example:

The salary of a PhD student is 800 UAH per month, which means 80 USD per month,

An average scholarship, which could be proposed by the Universities is 1000 UAH.

Is it possible to imagine such a surviving?

Of course not!

That's why less and less students continue their studies with PhD. Mainly they prefer to go to work from the very first courses of their studies.

skilled migration / brain drain

My friends, who have finished their studies before and managed to fulfill requires and studied with Erasmus

Come back to UA and don't know what to do.

The skilled force is not that much required in Ukraine: as they can't find a well payed job they are just leaving Ukraine and come back to the countries…

I sincerely hope it wouldn't be a voice crying in the wilderness.

The time for challenge should come.

And then, I hope, in a few years, I would be happy to write an essay about innovation growth "How fantastic "

Using the Legatum Prosperity Index [www.prosperity.com], we can clearly see that Ukraine has a big potential in Education and Science, but it doesn't correlate with the Innovation development and Social capital.

Phenomenon, isn't it?

Maybe the key answer lays under the consequence of skilled migration?

Where do talented students go? Why?

The research made by me to find

The era of information technologies and innovations opens new relations between economic development, FDI and human capital. In the knowledge economy, a human capital, especially intellectual capital, used to play a much bigger role compared to a traditional economy. In particular, formation of a subsistence level of the worker essentially depends on its creative abilities. The formal model explains the logic behind higher salary for workers.

P. Romer emphasized FDI's role in diffusing technology and its relationship to economic growth, and his dynamic macro model (1990) could be a good example to explore factors of knowledge production: work, the capital, an land (in a broad sense). Two sectors are presented in the model: the sector producing goods and services, and the sector producing new knowledge.

The model is described by the equations (1.1) - (1.4) as follows:

- production function

(1.1)

labor market equilibrium

(1.2)

production of new knowledge

(1.3)

average productivity of the knowledge sector

(1.4)

From equations (1.3) and (1.4), a function of the new knowledge production is obtained as:

(1.5)

where Y is production of goods and services; K is a fixed capital; L is a total labor supply; LY is a labor supply used to production of the goods and services; LA is a labor employed in the new knowledge sector; A is technology, knowledge and ideas; is a growth rate of technologies, knowledge and ideas (new technologies, knowledge and ideas); is a factor of production function of the goods and services; is a average labor productivity in the knowledge sector (quantity of new knowledge per one researcher); are constants.

This equation shows that producing of new knowledge at the present time depends on quantity of researchers and the volume of knowledge. From the equation (1.5) it follows that for > 0, there is a positive knowledges' spillover in the future; if <0, then the basic knowledge have been produced in the past, and in the future it could be more difficult to improve new knowledge.

In Romer's seminal work (1990) a specific factor of knowledge production at constant "effect of scale" is defined, if = 1, = 1:

. (1.6)

That is how the equation of knowledge' growth rate is received:

(1.7)

Hence, in a stationary condition we obtain:

(1.8)

The equation (1.8) demonstrates, that in the long-run production of knowledge, measured as the number of scientists, is going to increases the rate of economic growth per capita. Thus, the government policies aimed at increasing the number of employees in R&D industries (for example, by subsidizing them), has a direct positive influence on rate of long-term economic growth.

4. Empirical results

The investigation of Ukrainian model for interdependence of GDP and other investments' factors could be measured by such indicators, as expenses for R&D, mn hryvnas (Expenses), personnel's number of scientific and technical work (Personnel), the share of firms that introduce innovations, in percent (Firms); innovative products realized (Products).

The model 2SLS estimates for the 2004-2008 period are presented below:

GDP = 0,808*Expenses + 0,767*Personnel - 0,032*Firms - 0,481*Products

(7,299)* (8,262)* (-0.390) (-6.398)*

Adj.R= 0,96

DW = 1,446

The Durbin-Watson statistics at 1.44 is rather low, but it could be the outcome of a small sample. Adjusted R-squared at 0.95 shows that all independent variables determine the dynamics of the dependent variable. It is clear that an increase in the R&D expenditure and number of scientists contributes to the GDP growth. However, an increase in the number of innovative products has an opposite impact, running counter to the logic of knowledge-based growth.

Table 1

The Granger causality test

Hypothesis

Lags

1

2

3

4

EXPENSES does not Granger Cause GDP

8,034

4.507

20,42

4,31

(0.01*)

(0.048*)

(0.003*)

(0.197)

GDP does not Granger Cause EXPENSES

33,179

10,967

49,374

2,339

 

(0.000*)

(0.005*)

(0.000*)

(0.321)

PERSONNEL does not Granger Cause GDP

14,247

20,501

4,71

0,638

 

(0.00*)

(0.000*)

(0.064***)

(0.685)

GDP does not Granger Cause PERSONNEL

6,279

11,069

8,051

1,783

 

(0.029**)

(0.005*)

(0.023**)

(0.389)

FIRMS does not Granger Cause GDP

2,842

1,65

0,562

0,341

 

(0.295)

(0.251)

(0.662)

(0.835)

GDP does not Granger Cause FIRMS

0.295

0.471

1,252

1,471

 

(0.597)

(0.640)

(0.384)

(0.442)

PRODUCTS does not Granger Cause GDP

6,385

2,701

1,489

0,648

 

(0.028**)

(0.216)

(0.324)

(0.681)

GDP does not Granger Cause PRODUCTS

0.937

0,436

3,487

1,073

 

(0.353)

(0.661)

(0.106)

(0.534)

The Granger test supports that expenses on R&D and number of scientists have an impact upon GDP at the statistically significant level. However the hypothesis of the reverse causality between two variables is not ruled out. The results have shown the tight relation in the spirit of the Romer dynamic macro model, as in the long-run production of knowledge (number of scientists) is to increase the rate of economic growth per capita. Thus, the government policies aimed at increasing the number of employees in science has a direct positive impact on the rate of long-term economic growth.

Number of firms seems to be neutral in respect to GDP, while there are weak signs that PRODUCTS Granger cause GDP. That means that the share of firms that introduce innovations and produce innovative products do not influence GDP. As those two indicators are quite related, the results above could be interpreted that Ukrainian products are not competitive enough to produce significant impact upon the growth rate. Also, it is possible that profits of firms were not directed towards the development of domestic technologies and products but towards the adaptation of imported equivalents.

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