Unemployment, Labour Market, Migration Group: C3 14 th April 2008
Dec 26, 2015
Unemployment, Labour Market and Migration
Free movement of person, Accession Treaty, EU Member States, Migration
Economic Background (tables, migration, unemployment)
Poland, Ireland Summary
Free movement of workers
Free Movement of Persons
= one of the four fundamental freedoms provided for in the EC Treaty
- The right for EU nationals to move to another Member State to take up employment and to establish themself in the host State
Free movement of workers
The Accession Treaty- signed on 16 April 2003
- lays down transitional arrangements concering the free movement of workers within the enlarged Union
- arrangements continue for up to seven years
- Preference rule - priority over nationals of countries that do not belong to the Union
Member States - free movement of workers (1November 2007)
EU-15 x EU-8 No restrictions: Luxembourg, Spain, Finland,
Portugal, Italy, Great Britain, Ireland, Sweden, Greece, Netherlands
Partial restrictions: Belgium, Denmark, France, Germany
Full restrictions: Austria
Member States - free movement of workers (1November 2007)
EU-25 x Bulgaria, Romania No restrictions: Estonia, Finland, Cyprus,Latvia,
Lithuania, Poland, Slovak Republic, Czech Republic, Slovenia, Sweden
Partial restrictions: Denmark, France, Italy, Luxembourg, Hungary, Germany, Belgium
Full restrictions: Ireland, Malta, Netherlands, Austria, Greece, Spain, Great Britain, Portugal
Migration + having beneficial effects on the economies
of the Member States which have opened up their labour market
improving industrial competitivness, reducing undeclared work,
helping to raise economic growth rates and create more new jobs,
generating higher tax revenue for the host countries' budgets
Migration - Transitional periods:
higher levels of illicit working and sham self-employment
will increasingly lead to regionally acute wage pressure and unfair working conditions, as
well as to discrimination against and the exploitation of migrant workers
Unemployment – economic aspects
Simple definition:
- the proportion of unemployed people over the sum of total workforce
Dynamic approach towards labour market
Q: Why do some people stay unemployed?
A: Different reasons exist:
- frictional unemployment - people changing their job- structural unemp. - structure of the national economy- cyclical unemp. - phases of the business cycle
Structural unemployment
DL = SL, that means the number of jobs available equals the number of people searching for a job
x BUT - unemployed people exist, due to:
- disharmony between qualification offered by employees and requested by firms
- disharmony between allocation of workers and allocation of job-opportunities (regional aspect)
- Structural unemployment can cause migration!
Migration – impacts on the home economy
Positive:- decrease in unemployment (the structural part)
- remittances (financial transfers to the home economy) contribute to the growth of GDP
improve the balance of payments
Negative:
- “Brain drain”
Unemployment of the EU states in 2007 (CIA World Factbook)Austria 4.30%Belgium 7.60%Bulgaria 8%Cyprus 3.80%Czech Rep. 6.60%Denmark 3.50%Estonia 5.20%Finland 6.60%France 8%Germany 9.10%Greece 8.40%Hubgary 7.10%Irland 5%Italy 6.70%Latvia 5.90%Lithuania 3.20%Luxemburg 4.40%Malta 6.80%Netherlands 4.10%Poland 12.80%Portugal 8%Romania 4.10%Slovakia 8.60%Slovenia 4.60%Spain 7.60%Sweden 4.50%United Kingdom 5.40%
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Situation in Poland
Unemployment rate for the age group <25 ~ 40%
too many graduates and not enough jobs
Motives for departure:- work experiences (easy to find low-qualified job)- higher income (monthly salary in Poland is just 1/3 of the EU average)
One of the biggest post-war “exodus”:About 2 million of Poland's 38 million people have opted to leave home…(UK, Ireland, Sweden)
Implications for Polish economy (I.)
Unemployment
Source: www.oecd.org
Positive effect on the decrease of unemployment can be identified
Years 2003 2004 2005 2006 2007
Unemployment rate
19,6% 19% 17,7% 13,8% 12,8%
Employment Age group 15-24
19,5% 20% 20,9% 24%
Implications for Polish economy (II.)
Labour force by occupation
Agriculture:
16,1%
Industry:
29% Services:
54,9%
A (Germany):
2,8%
I (Germany):
33,4%
S (Germany):
63,8%
GDP – composition by sectors
Agriculture:
4,1% Industry:
31,9%
Services:
64%
A (Germany):
0,9%
I (Germany):
29,6%
S (Germany):
69,5%
Source: www.cia.gov
The structure of polish economy is underdeveloped, qualified labour force is desperately needed; lack of labour in some industries.
Implications for Polish society
• Social dimension – depopulated areas, older people left alone
• Demographic dimension – population is getting older
• “Brain waste” – migrants` qualification is not recognised
Conclusion
Positive impacts:- rate of unemployment has decreased
Negative impacts:- lack of qualified workers- social dimension, demographic dimension, “Brain waste”- qualification for “bus drivers” … ?
Poland needs its migrants back
Ireland
Traditionally a country of emigration
In the 1990's, economic success led to an influx of immigrants: 1999: 6,000 non-
Irish workers 2003: 50,000 Only one third of
non-nationals are from outside the EU
The “Celtic Tiger”
In the early 1990's Irish emigrants began returning home, this led to increased unemployment: From 1990 – 1993 unemployment increased from
13% - 16% However, economy began growing at a fast
pace: From 1995 – 2000 real GDP growth averaged
around 9% By April 2000, unemployment had fallen to 4.3%
Immigration policy
Social benefits rather than unemployment was the main issue regarding EU expansion.
Two year period in which immigrants are not eligible for social benefits
2004: Habitual Residence Condition
Immigration After Enlargement
Open immigration for EU-10 By 2005, 3.8% of the working population from
EU-10 Unemployment has continued to fall after
enlargement: EU-10 nationals in Ireland have a higher employment rate than Irish nationals (currently around 85%).
Less than 1,000 EU-10 nationals on the unemployment register (March 2006)
Problems with immigration
Inflows of workers has put stress on housing and infrastructure
Successes of immigration has been dependent on rapid growth and job creation
Perceived problem of job replacement Social problems
Literature and other sources:
EU Commission Report on the Functioning of the Transitional Arrangements set out in the 2003Accession Treaty (period 1 May 2004–30 April 2006)
Holman, Robert. Ekonomie. Praha: C. H. Beck, 2002.
www.integrationindex.eu
Soukup, J. - Pošta, V. - Neset, P. - Pavelka, T. - Dobrylovský, J. Makroekonomie. Moderní přístup. Praha: Management press, 2007.
The Economist, European migration: The brain-drain cycle, December 10th 2005.
www.oecd.org
www.cia.gov
http://news.bbc.co.uk/1/hi/business/3442329.stm
www.mpsv.cz