Labour mobility in the EU László Andor Mercator 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) EMPLOYED plus family members Free movement of workers SELF-EMPLOYED Freedom of establishment POSTED WORKERS Freedom to provide services

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 workers in % of total labour force Source: Eurostat EU–LFS 2012

Limited flows to most Member States Recent (< 10 years) mobile EU workers (economically active) as a percentage of the host country's labour force Source: Eurostat, LFS and European Commission calculations.

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 Recent (<10 years) mobile (economically active) EU citizens by nationality, in % of labour force of origin country, 2013 Source: Eurostat EU-LFS and European Commission calculations

Mobile EU citizens tend to be young 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 Source: Eurostat EU-LFS and European Commission calculations

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) Remittances partly offset negative impact of loss of workers in Central and Eastern Member States Personal remittances received (% of GDP) (average for 2004-12) Source: World Bank

Impact of the crisis on EU mobility Mobility declined sharply between 2008 and 2010 (-41%), but recovered (+22%) somewhat in 2011 and 2012. Source: Eurostat, LFS and European Commission calculations.

Impact of crisis on intra-EU mobility 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) Source: Eurostat, LFS and EC calculations.

Impact of crisis on distribution of 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 countries Recent (< 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 persons in employment) Source: Eurostat, LFS and European Commission calculations

East to West mobility likely to decrease GDP 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 "Rest Europe" includes EU accession countries but also some non-EU countries "Other" includes China, USA among others countries. Source: UK ONS – Long-term international migration 1991-2012

Number of adult EU foreigners registering in the UK – 2012/2013 compared to 2011/2012 (%) Romania Bulgaria Source: DWP 2013 Study Spain Portugal Italy

71 77 Employment rate in the UK (age 15-64) (%) Nationals Source: EU Labour force survey - 2013 Nationals EU Citizens (excluding nationals)

7.8 7.2 Unemployment rate in the UK (age 15-64) (%) Nationals Source: EU Labour force survey - 2013 Nationals EU Citizens (excluding nationals)

EU mobile citizens are low users of welfare benefits EU mobile citizens claim 2.1% of welfare benefits despite representing 4.6% of the working population 93 4.8 2.1 Source: DWP 2013 Study Claimants of benefits (%)

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!