Labour mobility in the EU László Andor Mercator Senior Fellow at Hertie School of Governance (Berlin) Visiting Professor at ULB (Brussels) Poznan, 19 May.

Labour mobility in the EU

László AndorMercator Senior Fellow at Hertie School of Governance (Berlin)Visiting Professor at ULB (Brussels)

Poznan, 19 May 2015

Free Movement of Persons in the EU

EU CITIZENS have the right to move and reside freely, including non-actives, pensioners and

students (Art 21 TFEU)

Freedom of movement for workers

Can look for a job in another member country    

Can work there without a work permit

Can reside there for that purpose

Can stay there after employment has finished

Have a right to equal treatment with nationals in access to employment, working conditions and all other social and tax benefits

Can have their family members join them with derived rights

Share of EU mobile workersin % of total labour force

Sourc

e:

Euro

stat

EU

–LFS

20

12

Source: Eurostat, LFS and European Commission calculations.

Limited flows to most Member StatesRecent (< 10 years) mobile EU workers (economically active) as a percentage

of the host country's labour force

Increase in numbers of mobile EU workers after 2004 and 2007 enlargements

EU workers residing in another member country in millions and as a percentage of total labour force (2005-13)

Source: Eurostat and European Commission estimates.NB: Croatian nationals included from 2009 on.

Large outflow in % of labour force in origin countries

Source: Eurostat EU-LFS and European Commission calculations

Recent (<10 years) mobile (economically active) EU citizens by nationality, in % of labour force of origin country, 2013

Mobile EU citizens tend to be young

Source: Eurostat EU-LFS and European Commission calculations

Percentage of young people (15-34) among recent (<10 years) mobile EU citizens and in population of countries of origin, by group of EU countries, 2013

Mobile EU citizens more likely to be economically active – and employed -

than nationals of host countries

Source: Eurostat, Labour Force Survey (LFS)

Personal remittances received (% of GDP) (average for 2004-12)

Source: World Bank

Remittances partly offset negative impact of loss of workers in Central

and Eastern Member States

Impact of the crisis on EU mobility

Source: Eurostat, LFS and European Commission calculations.

Mobility declined sharply between 2008 and 2010 (-41%), but recovered (+22%) somewhat in 2011 and 2012.

Impact of crisis on intra-EU mobility

Source: Eurostat, LFS and EC calculations.

Mobility flows declined sharply from 2007-08 to 2009-10 (-41%)before recovering to some extent (+22%) in 2011-12.

Recent (<2 years) mobile EU citizens and non-EU economically active persons ('000)

Impact of crisis on distributionof mobile workers by region of origin

Recent (< 2 years) mobile EU workers (econ. active) by region of origin ('000)

Source: Eurostat (LFS) and EC calculations.

Impact of crisis on origin countriesRecent (< 2 years) intra-EU movers (econ. active) by origin country, in 2011-12, in comparison to pre-crisis period (2007-08)

Source: Eurostat, LFS and European Commission calculations.

Impact of crisis on distribution of mobile workers by host country

Recent (< 2 yrs) mobile EU citizens (econ. active) by host country (as % of total)

Source: Eurostat (LFS) and EC calculations.

• Sharp increase in the share of recent mobile EU workers with tertiary

education – according to labour demand

Distribution of recent (< 2 years) intra-EU movers (econ. Active) by highest education level, in % of total

Source: Eurostat, LFS and European Commission calculations.

Growing percentage of tertiary graduates among mobile EU workers

Source : Eurostat, Education statistics

Mobile EU workers' high over-qualification rate

Around 35% of recent mobile EU tertiary-educated workers employed in low and medium-skilled occupations – around 50% in 2012 among those from Central and Eastern Europe.

Over-qualification rate among recently established foreigners by group of countries(as a percentage of all highly educated personsin employment)

Source: Eurostat, LFS and European Commission calculations

East to West mobility likely to decreaseGDP per capita in Central and Eastern EU countries (in PPS, EU15=100), 2000-2012

Source: European Commission (AMECO database)

Lessons learned from the impact of crisis on mobility

People go where the work is

Mobility flows in the EU have reacted more strongly to economic situation than in the US (contrary to the past)

Some people go back when the economic situation in their country improves

People willing to move but more scope for intra-EU mobility to increase

•  

Impact of (post-2004) EU mobility:

Positive economic impact (GDP of EU-15 boosted by 1% in the long-run)

Positive impact on economy - filling labour shortages

Moderate impact for specific groups

Very limited impact on wages / unemployment among natives

Higher impact in major destination countries

Possible negative impacts in short-run and on groups more likely to be substitutes (past immigrants, low-skilled natives)

• 

Impact of mobility on origin countries Could be negative on GDP due to large population outflows

Impact on GDP per capita more limited

Many young people leaving their origin countries

The share of tertiary educated has increased in the last decade

Remittances sent to origin countries

No overall brain drain effect

Mobility is not necessarily permanent phenomenon

Many mobile workers come back with additional experience

Possible strong impact for specific sector (eg: situation in the health sector)

Impact of mobility on social security in destination country

+ Fiscal impact likely to be positive, as mobile EU citizens tend to be economically active

+ EU mobile citizens less likely to receive social benefits

- Problems at local level may occur due to sudden influx of poor EU mobile citizens in specific areas = impact on local services such as healthcare and education

•  

Total inflow of migrants to the UK

Source: UK ONS – Long-term international migration 1991-2012

"Rest Europe" includes EU accession countries but also some non-EU countries

"Other" includes China, USA among others countries.

Number of adult EU foreigners registering in the UK – 2012/2013

compared to 2011/2012 (%)

Sourc

e:

DW

P 2

013 S

tud

y

Spain Portugal Italy

Romania Bulgaria

Employment rate in the UK (age 15-64) (%)

71 77

Nationals EU Citizens(excluding nationals)

Sou

rce:

EU

Lab

ou

r fo

rce s

urv

ey -

20

13

Unemployment rate in the UK (age 15-64) (%)

7.8 7.2

Nationals EU Citizens(excluding nationals)

Sou

rce:

EU

Lab

ou

r fo

rce s

urv

ey -

20

13

Sourc

e:

DW

P 2

013 S

tud

y

EU mobile citizens are low users of welfare benefits

93

Claimants of benefits (%)

4.8

2.1

EU mobile citizens claim 2.1% of welfare benefits despite representing 4.6% of the working population

Overall positive fiscal impact in UK of mobility from EU countries

• Positive net contribution of about 25 billion GBP between 2001 and 2011

• Source: Centre for Research and Analysis of Migration of the University College London

Other recent findings:LSE brief (2013): Immigrants, on average, are less likely to be in social housing than people born in the UK, even when the immigrant is from a developing country.

EU policy for supporting labour mobility

The EU’s three-pronged approach to promoting labour mobility:

• Remove remaining obstacles to labour mobility

• Actively support labour mobility and cross-country matching of jobseekers and vacancies

• Tackle economic and social challenges linked to labour mobility

1. Removing remaining obstacles to the free movement of labour

‘Portability’ of supplementary pensions• Directive on improving the acquisition and preservation

of supplementary pension rights for mobile workers

Recognition of professional qualifications

2. Actively supporting labour mobility and cross-country matching of jobseekers and vacancies

Enforcement Directive on the exercise of the right to free movement of workers• advice to mobile workers

• easier redress when rights breached

Upgrading EURES into a pan-European recruitment and placement tool

3. Addressing related economic and social challenges

European Social Fund (> €80bn in 2014-20)

Proposal for a European Platform to prevent and deter undeclared work

Enforcement Directive on the posting of workers

• Thank you for your attention!