Wiener Institut für Internationale Wirtschaftsvergleiche The Vienna Institute for International Economic Studies Migrants and Economic Performance in the EU15: 1. their allocations across countries, industries and job types 2. their (productivity) growth “impacts” at the sectoral and regional levels FIW Study by M. Landesmann, R. Stehrer and M. Liebensteiner

 wiiw 2 Migrants and Economic Performance in the EU15: wiiw participated in 3 studies recently:  Alvarez-Plata/Bruecker et al (2008): The impact of East-West migration after EU Enlargement  Migration, Skills and Productivity (2009): Background study for EU (DG Enterprise) Competitiveness Report 2009  Landesmann, Stehrer, Liebensteiner (2010): FIW Study

 wiiw 3 Content of the study: Part I: Descriptive Analysis using LFS data Migrant workers in the EU15; their places of origin, their ‘skills’ (educational attainment levels); their allocations across industries and ‘job types’; skills-jobs mismatches; comparisons with ‘domestic’ employees. Part 2: Econometric analysis: Migrants and productivity and output growth LFS data supplemented with industry level (EU-KLEMS) data and regional statistics Migrants’ presence at industry and regional levels and productivity and output growth; the impact of skill structure of migrants; impact of integration policy indicators. Main challenge: causality and endogeneity issues. Unresolved Policy Brief: Focus on Austria relative to EU15: skill composition of migrants; skills-jobs mismatches

 wiiw 4 Basic argument: East-West integration meant for Austria a strong push factor in the direction of changing international specialisation (e.g. tradable services), cross-border production integration and fragmentation processes. All these processes were skill-demanding Austria’s migrant stock was historically (comparatively) low-skill intensive; this has inherent tendency to persevere (e.g. family reunion) East-West integration would have facilitated a significant change in migrants’ skill composition Opportunity was not sufficiently used; also unfavourable labour market and integration settings for migrants’ skill use and skill acquisition Let us look at the evidence

 wiiw 5 Migrants (‚Foreign Born‘) in Total Workforce (%)

 wiiw 6 Migrants in total workforces by origin (%)

 wiiw 7 Migrants skill groups in the workforces (%)

 wiiw 8 Skill Composition of Migrants and of Domestic Workers by Country (%),

 wiiw 9 Employment shares in high skill industries (%)

 wiiw 10 Industry allocations of high skill migrants and of high skill domestics (%)

 wiiw 11 Skills mismatches of high-skilled workers - Over qualification ( Over-/underrepresentation of migrants relatively to domestic workers, averages )

 wiiw 12 Over qualification - highly educated workers: domestic workers and migrants,

 wiiw 13 Job (mis)matching in low skill jobs: domestic workers and migrants,

 wiiw 14 Job (mis)matching in low skill jobs: domestic workers and migrants,

 wiiw 15 Job (mis)matching in medium skill jobs: domestic workers and migrants,

 wiiw 16 Job (mis)matching in high skill jobs: domestic workers and migrants,

 wiiw 17 Relative over-qualification and correct-qualification of migrants vs. domestic workers,

 wiiw 18 Job matching in low skill jobs: domestic workers and migrants,

 wiiw 19 Job matching in medium skill jobs: domestic workers and migrants,

 wiiw 20 Job matching in high skill jobs: domestic workers and migrants,

 wiiw 21 Six Years after EU Enlargement: Austria and Its Eastern Neighbours, Labour Markets Econometric results from Landesmann/Stehrer/Liebensteiner (2010):  Positive and robust relationship between presence of high-skilled migrants and productivity (and output) growth – sectoral and regional analysis (EU-15 and individual country estimates)  Particularly strong relationship in high-skill intensive industries  Positive impact of anti-discrimination policy settings on the ‘impact’ of migrants on productivity growth; Austria has a very low MIPEX indicator in this respect (position 22 from 28 countries; in labour market access: position 20)

 wiiw 22 Austria and its Migrant Labour Force: Comparison with EU15 peers Main policy results from Huber et al (2009) and Landesmann et al (2010):  Austria has (comparatively) an unfavourable skill composition of migrants; especially in the context of various skill-biased developments  Evidence of under-utilisation of migrants’ skills (‘brain waste’)  Austria has a comparatively very low indicator on anti- discrimination policy setting  Insufficient use of high-skilled migrants in high-skilled industries and in ‘skill-intensive jobs’ - compared to ‘peer countries’

 wiiw 23 Six Years after EU Enlargement: Austria and Its Eastern Neighbours, Labour Markets Assessing Austria’s migration policy in the context of EU Enlargement:  Inefficient use of formula to up-grade skill composition of migrants  Austria has to make sustained effort to change the skill mix of its migrant labour force – EU Enlargement would have provided an opportunity to do so  Migration policy has to be seen in the context of Austria’s changing structure of international specialisation and cross-border production integration; complementarity and substitutability of different channels of economic integration  Variety of migration policies: selective migration at border, integration policy, training and degree recognition and human capital up-grading  Path-dependency of migration policy decisions in all these respects