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Berenberg/HWWI study: Labour mobility “Willingness to migrate is increasing in Europe”

  • Migrants from new member states demonstrate greatest mobility 
  • Rise in intra-EU migration from the periphery to the core 
  • Germany is one of the most popular destination countries 
  • Mobility driven primarily by employment opportunities and pay

Hamburg/Frankfurt. In a single currency area, the movement of workers can play an important role in eliminating imbalances on the labour markets. “Economic shocks can be cushioned by a high level of labour mobility,” explains Dr Jörn Quitzau, an economist at Berenberg. 

In their latest study, private bank Berenberg and the Hamburg Institute of International Economics (HWWI) analyse labour mobility in Europe during the crisis years. “Workers reacted to the imbalances on the labour markets caused by the euro crisis,” says Professor Thomas Straubhaar, Director of the HWWI. “This has resulted in a redirection of migration flows together with additional movements out of the crisis-hit regions.” Previously popular destinations for migrants like Spain evolved into net emigration countries during the crisis. The migration flows from the European Union’s new member states in central and eastern Europe (NMS-12) in particular have changed direction. Instead of going to Spain, Ireland or Italy, workers from the accession countries are now heading more to other European countries or returning to their home countries. Furthermore, an ever increasing number of natives are emigrating from the periphery of the eurozone to the core European countries. In 2012, around 349,000 people from the EU-27 immigrated to Germany alone, of whom around 217,000 came from the NMS-12.

The willingness of young, well-educated Europeans to migrate seems to be increasing within the EU. An analysis of labour mobility between 2009 and 2012 shows that internal migrations in the EU-27 rose by around 20% during this period. Immigration to Germany in that four-year period increased by 71% overall and a massive 108% from the EU-27. Compared with the UK, Germany tends to attract less well-educated migrants. In this context, it is primarily employment and incomes that are the actual drivers of labour mobility in Europe. “The single currency is not an issue in this regard. People go where the jobs are. In addition, the persistent income gap between the countries of central and eastern Europe and western Europe is acting as a lever initiating migration,” says Berenberg economist Quitzau.

Between 2008 and 2011, the proportion of migrants within the EU-27 accounted for by highly skilled workers rose by 13 percentage points. At the same time, new jobs were still created for highly educated workers in the eurozone even during the crisis. The mobility of increasingly young and well-educated people within Europe promotes the integration of the labour markets. However, around one-third of the migrants entering the EU-15 from the NMS-12 are over-qualified for the work they do in the destination country. “Over-qualification for the job is the price that many highly skilled migrants pay for employment in the destination country. At the same time, a job for which they are actually over-qualified is the better choice for them, provided this represents the only alternative to unemployment in the short run”, says Dr Christina Boll, a research director at the HWWI. To cite one example, Germany has deliberately courted migrants for future-looking occupations in healthcare and nursing, some of whom are over-qualified for the jobs they do in the destination country. By contrast, low-skilled workers, many of whom have become unemployed in the crisis-hit countries, can only be redirected to new jobs in more stable countries to a limited extent. “The falling demand for low-skilled workers is connected to the economic shift towards knowledge-based services confronting all European countries,” believes Boll. The crisis in the eurozone led to a sharp increase in the mismatch between available and required education levels. 

“Even though labour mobility within Europe still has upward scope, Europe would do well not to ‘put all its apples in one basket’ when it comes to further efforts to integrate its labour markets,” summarizes Quitzau. “It is just as important to press ahead with structural reforms and make the eurozone and Europe attractive for young, educated immigrants from countries outside of the EU.”

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