2003 OECD Economic Surveys: Luxembourg 2003

image of OECD Economic Surveys: Luxembourg 2003

This 2003 edition of OECD's periodic review of Luxembourg's economy examines recent economic developments, prospects and policies and includes special features on policies to strengthen growth in national income and on migration.

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The Economic Impact of Migration in Luxembourg

Luxembourg stands out in international comparisons as having a much higher proportion of foreigners in its population than any other OECD country; about 37 per cent of its population and 65 per cent of employees are foreigners.92 This is partly a function of size, since Luxembourg is a small country located in a large economic area. Hence movement over relatively small distances that would be internal migration in Luxembourg’s much larger neighbours, France and Germany as well as Belgium, is recorded as international migration. Indeed, approximately the same number of people as there are foreigners resident in Luxembourg – about one-third of the labour force – cross from neighbouring countries to work in Luxembourg every day and are known as cross-border workers (“frontaliers”).93 But most of Luxembourg’s foreign resident population comes from much further away – in particular Portugal and Italy – than its neighbouring “Grande région”, so the phenomenon is not merely local. While frontaliers might not be strictly defined as a migration issue, in the case of Luxembourg it is very much part of the same set of economic phenomena: reducing labour market constraints and allowing the economy to grow independently of locally available skills.

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