Free Movement of Workers and Labour Market Adjustment

Free Movement of Workers and Labour Market Adjustment

Recent Experiences from OECD Countries and the European Union You do not have access to this content

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27 June 2012
9789264177185 (PDF) ;9789264177178(print)

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This publication presents recent evidence and analytical work on the impact and future perpectives of demographic trends in the workforce, taking also into account education, skills and geographical mobility. It pays particular attention to the labour mobility patterns generated by the development of free mobility in Europe and simlar developments in other parts of the world.
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  • Foreword
    Demographic projections for the next decades point to shrinking workforces in most OECD countries. In the EU member states, the working-age population is expected to contract by 12% by 2030. In addition, the increasingly competitive global economic environment induces an accelerating pace of structural change. As a consequence, despite the high unemployment rates currently observed in many OECD countries, labour and skills shortages are anticipated to rise over the next two decades, challenging economic growth prospects. In this context, maintaining a high-quality workforce represents a key strategic goal for both employment and economic growth.
  • Acronyms and abbreviations
  • Main findings of the joint EC/OECD conference on growing free labour mobility areas and trends in international migration, 14-15 November 2011, Brussels
    Since the 1950s, in many parts of the world, labour migration movements have been facilitated – to a lesser or greater extent – among selected groups of countries, generally characterised by close geographical proximity and historic and economic ties. Such liberalisation of international labour mobility has generally developed in the context of a broader process of regional economic integration, and has tended to be introduced in the latter phases of this process. The degree to which labour migration is facilitated varies with the level of regional integration. Only in a limited number of cases has the liberalisation of international labour mobility in the context of regional economic integration processes led to the establishment of free labour mobility areas, involving full and equal labour market access for all member countries’ nationals. The great majority of such free-movement areas are to be found among OECD countries.
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  • Expand / Collapse Hide / Show all Abstracts The development of free mobility areas

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    • Free labour mobility areas across OECD countries
      Since the 1950s, in many parts of the world labour migration movements have been facilitated between selected groups of countries to a lesser or greater extent. If these liberalisation experiences share a number of characteristics, there are also important differences – both in terms of the degree to which the migration movements have been facilitated and in terms of accompanying measures. This chapter aims to provide a better understanding of the development of free labour mobility areas and their impact on migration flows. This sort of movement is expected to play a greater role in responding to ageing populations and workforces.
    • Free labour mobility and economic shocks
      This chapter aims to shed some light on the impact of the global economic crisis on free mobility. It aims to answer the following three key questions: First, how has free mobility evolved during the crisis? Second, how did free-mobility migrants who had migrated just prior to the onset of the crisis fare during the crisis? Finally, not all countries and regions were equally affected by the crisis. Is there any evidence that free mobility has played an equilibrating role during the crisis – that is, did free mobility encourage moves from areas that were hard hit towards others that were less affected?
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  • Expand / Collapse Hide / Show all Abstracts The labour market impact of free mobility in Europe

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    • EU enlargement and Ireland's labour market
      This chapter considers several issues related to EU enlargement, migration and Ireland’s labour market. The first section presents the figures on net migration to Ireland for the recent past. What becomes clear from this picture, and what will be known to most observers, is that the Irish experience since 2004 is broken up into two very distinct phases. For the four years after 2004, net migration was strong but from 2009, net migration has turned negative due to Ireland’s deep recession. Given these two phases, it is necessary to examine the labour market dimensions from different perspectives.
    • The United Kingdom experience of post-enlargement worker inflows from new EU member countries
      The United Kingdom was one of only three EU member states to allow citizens of those Eastern European countries acceding in May 2004 freedom of entry into the labour market. Although this arrangement was not extended to the citizens of Bulgaria and Romania they continue to be employed under the work permits scheme, the Seasonal Agricultural Workers Scheme and the Sectors Based Scheme. This chapter looks at the post-enlargement worker inflows from the new EU member countries and their impact on employment and wages of domestic workers by level of education in the United Kingdom.
    • Labour mobility from new EU member countries: the impact on Italy
      The European Union’s eastern enlargement stimulated substantial labour migration from new to established member states. Among the latter, Italy has experienced one of the largest increases in inflows over the past decade. The number of immigrants regularly residing in the country almost doubled in the seven years following enlargement in 2004. This chapter describes the size of these flows and the functioning of transitional arrangements in Italy. A broad picture is provided of the demographic characteristics and observed skills of these immigrants from new member states, as well as their labour market outcomes. The impact on the Italian labour market and welfare system is also investigated.
    • Central and Eastern European labour migration to Norway
      The Nordic countries have attracted considerable numbers of labour migrants since the eastward enlargement of the European Union in 2004 and 2007. However, the magnitude and composition of migration flows have differed considerably between the Nordic countries, with Norway as the top destination. We analyse how the influx to Norway has been powered by economic growth, high wages – especially for lesser skilled workers – and structural changes in many industries facing shortages in local labour supply. Such dynamics have been complemented by family- and network-related effects, as individual workers settle down and bring their families. In the wake of migration, new secondary forms of employment have spread in many sectors. Based on in-depth surveys collected among Polish migrant workers in Oslo in 2006 and in 2010, this chapter analyses how terms of employment, working conditions, social mobility and risk of unemployment vary between different groups of workers. Finally, it briefly reviews the impact of migration on the economy, labour markets and institutions in Norway.
    • Labour market impacts of post-accession migration from Poland
      The period following Poland’s accession to the European Union saw significant changes in the migration patterns of the country’s population. There was an unprecedented increase in scale: in just three years the number of Polish citizens staying temporarily abroad rose from 1 million to over 2.3 million, or 6.6% of the total population. Migration dynamics changed as well, including choice of destination and migrants’ skills. Theoretically, such a massive supply shock should lead to severe adjustments on the sending labour market. Available empirical evidence, however, indicates that there were no significant effects in either the short term (employment/unemployment) or the medium term (wages). This chapter argues that the labour market situation in Poland was only moderately affected by the recent outflow. Nevertheless, serious long-term impacts may be in store, particularly in terms of demographic structures and regional allocation of labour on the domestic market.
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  • Expand / Collapse Hide / Show all Abstracts Matching labour supply and demand

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    • The EU workforce and future international migration
      Demographic projections for the EU27 point unequivocally to a growing shortage of young graduates, which will become increasingly pronounced as the decade continues. In theory, selective immigration could fill part of the corresponding labour needs. However, against the prospect of developing selective immigration based on the level of education, it is important to note that the distribution of immigrants by level of education does not appear very favourable, since there is still very heavy overrepresentation of the lowest level of education. In addition, the ability of immigration to help manage demographic challenges depends more on the architecture of the host countries, in terms of integration and non-discriminatory deployment, than on the characteristics of the immigrants themselves.
    • Exploring conditions for EU growth given a shrinking workforce
      The decline in the working-age population in Europe will place its welfare system under strain unless it can maintain the growth of the pre-crisis decade (1999-2008). Increases in labour force participation rates and increases in productivity are both necessary. This chapter looks at some of the impacts of different labour-supply development scenarios on Europe’s economic growth paths and the productivity yields necessary to achieve those scenarios, in line with the Europe 2020 commitments. Potential contributors to better employment performance are examined, including regional development, mobility and migration policies, and progress in education. Single policy strands – such as activation measures, more open migration and structural policy – will not be sufficient to meet growth objectives, and a longer time horizon is necessary as new challenges will arise beyond 2020.
    • Changing demographic, educational and migration patterns in new EU member countries
      This chapter addresses future labour market needs in new European Union member countries, viewed through the prism of recent and projected demographic, educational and migration developments. A comparison is made between developments in the new member states (NMS or EU12) and in the old member states (OMS or EU15). As the demography-education-migration nexus is too complex an issue to be discussed in detail here, the focus is on aggregate trends rather than microeconomic issues. Data used for analysis throughout are secondary, drawn from public EU and OECD databases, with migration and no migration options developed by Eurostat and migration statistics by the OECD. Findings are supplemented by the results of several ad hoc case studies and observations from new member states on general patterns at the national level.
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  • Expand / Collapse Hide / Show all Abstracts Regional experiences beyond the European Union

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    • Migration and bilateral agreements in the Commonwealth of Independent States
      The Commonwealth of Independent States (CIS) currently comprises 11 states with different demographic and migration trends, as well as economic situations. The historical period preceding its establishment, which began with the breakup of the former Soviet Union at the end of 1991, saw migration flows in practically all of these countries – and even at that time, these flows varied tremendously in terms of reasons, volumes and directions. This chapter provides a description of the scale and characteristics of migration, focusing on labour mobility. It also gives a general picture of the co-operation among CIS states in the field of migration, and describes the main limitations on the free mobility of people and labour force in the region.
    • Governing migration
      International migration, like trade, is a fundamental feature of the postwar liberal order. As states and societies become more liberal and more open, migration increased. Will this increase in migration be a virtuous or a vicious cycle? Much will depend on how migration is managed by the more powerful liberal states, because they will set the trend for the rest of the globe. This chapter discusses the need for the rights of migrants to be respected and for states to co-operate in building an international migration regime in order to avoid a domestic political backlash against immigration. It also presents the asymmetry of interests, particularly between the developed and the developing world, and underlines the implications for international co-ordination and co-operation.
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