Macro-Economic Aspects Of People’s MobilityHow to Improve Intra-European Mobility and Circular Migration? Fostering Diaspora Engagement

Jonathan ChaloffInternational Migration Division

OECDRiga, 11 May 2015

• The role of migration to respond to the business cycle

• Structural aspects notably in line with population ageing

Structure of the presentation

No surprise that free mobility responds to economic conditions in destination country…

OECD (2014), International Migration Outlook 2014, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/migr_outlook-2014-en

Permanent immigration in OECD countries by category of entry, standardised statistics, 2007-12

Work Accompanying family of workers

Family Humanitarian Other Free movements0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2007 2008 2009 2010 2011 2012

1. The role of migration to respond to the business cycle

Working-age citizens living in another EU country as a percentage of the population (15-64) of the country of citizenship, 2013

..and a large share of the mobile migrants left their home only following EU membership…

RO PT HR LT LV BG IE LU PL EL EE SK AT NL HU IT BE DK FI CZ UK SE FR ES DE0

2

4

6

8

10

12

14

16

More than 10 years 5 to 10 years Less than 5 years

Source: OECD/European Union (2014), Matching Economic Migration with Labour Market Needs, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/9789264216501-en

1. The role of migration to respond to the business cycle

Return migration from the EU-27/EFTA and labour market conditions in selected European OECD countries, 2005-2010

…while return migration depends on the conditions in the origin country

2005 2006 2007 2008 2009 20100

0.10.20.30.40.50.60.70.80.9

1

00.020.040.060.080.10.120.140.160.18

Czech Republic

2005 2006 2007 2008 2009 20100

0.20.40.60.8

11.21.41.61.8

2

00.10.20.30.40.50.60.70.80.91Lithuania

2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35Latvia

2005 2006 2007 2008 2009 20100

0.5

1

1.5

2

2.5

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18Poland

2005

2006

2007

2008

2009

2010

0.7

0.75

0.8

0.85

0.9

0.95

1

0

0.05

0.1

0.15

0.2

0.25Romania

2005 2006 2007 2008 2009 20100

0.2

0.4

0.6

0.8

1

1.2

1.4

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09Germany

Chaloff, J., et al.  (2012), "Free labour mobility and economic shocks: the experience of the crisis", in OECD, Free Movement of Workers and Labour Market Adjustment: Recent Experiences from OECD Countries and the European Union, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/9789264177185-5-en

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1. The role of migration to respond to the business cycle

• Wide and increasing variation in unemployment rates among countries of the Eurozone since the beginning of the crisis (in 2012, 25% in Spain, 24% in Greece, 4% in Austria and 6% in Germany)

• Two questions:

Is free labour mobility reducing labour market disparities in Europe, in the Eurozone and in the United States?

Did the crisis lead to a change in the migratory response to regional disparities?

Labour Market Adjustment in the Eurozone

1. The role of migration to respond to the business cycle

Migration as an Adjustment Mechanism in the Crisis

• Labour mobility contributed to reducing regional unemployment and non-employment disparities in Europe and in the United States

• In both Europe and in the United States, up to a quarter of a shock to unemployment or non-employment may be accommodated within a year’s time

• During the crisis, Europe, unlike the United States, exhibited a stronger migratory reaction to labour market shocks, although cross-state mobility in the U.S. is still larger than in Europe

• Labour market adjustment in Europe has primarily been driven by citizens from outside the Eurozone, such as the recent EU accession countries or non-EU-27/EFTA countries

Jauer, J., et al.  (2014), "Migration as an Adjustment Mechanism in the Crisis? A Comparison of Europe and the United States", OECD Social, Employment and Migration Working Papers, No. 155, OECD Publishing, Paris.DOI: http://dx.doi.org/10.1787/5jzb8p51gvhl-en

1. The role of migration to respond to the business cycle

• Population Aging• Compositional effects

2. Structural aspects of migration

Percentage change of the working age population, 2010-2020 (%)

Without migration, the working age population would be falling in most OECD countries

Bulgaria

Latvia

Russian

Federa

tionMalt

aEU

12

Hungary

German

y

Icelan

d

Slove

niaEU

27

Portuga

l

Denmark EU

15

Austria

Irelan

dIta

ly

United Kingd

om

Canad

a

United St

ates

New Ze

aland

Norway

Australi

aBraz

il

Indonesia

Turke

yIndia

-15

-10

-5

0

5

10

15

20

Percentage change of 15-64 population (%, 2010-2020)Percentage change of 15-64 population (%, 2010-2020), assuming zero net migration

Source: OECD/European Union (2014), Matching Economic Migration with Labour Market Needs, OECD Publishing, Paris.DOI: http://dx.doi.org/10.1787/9789264216501-en

2. Structural aspects of migration

Composition of the change in the labour force, by education level and demographic group, 2010-20

-90%

-70%

-50%

-30%

-10%

10%

30%

50%

70%

90%

-60%

-40%

-20%

0%

20%

40%

60%

Young workers (new entrants) Older workers (retirees) Prime-age workers

New immigrants Growth in tertiary-educated labour force 2010-20 (right-hand scale)

Tertiary educated

assumes progress in education attainment of cohorts aged 35-64, already in the labour market in 2010, but no educational upgrade for those aged 15-34 in 2020 (compared to 2010)

-90%

-60%

-30%

0%

30%

60%

90%

-60%

-40%

-20%

0%

20%

40%

60%

Less than upper secondary education

2. Structural aspects of migration

Importance of medium-educated workforce

-90%

-60%

-30%

0%

30%

60%

90%

-60%

-40%

-20%

0%

20%

40%

60%

Young workers (new entrants) Older workers (retirees) Prime-age workers

New immigrants Growth in labour force with upper secondary 2010-20 (right-hand scale)

Upper secondary education: Scenario 1

-90%-70%-50%-30%-10%10%30%50%70%90%

-60%

-40%

-20%

0%

20%

40%

60%Upper secondary education: Scenario 2

2. Structural aspects of migration Scenario 1 assumes progress in education attainment of cohorts aged 35-64, already in the labour market in 2010, but no educational upgrade for those aged 15-34 in 2020 (compared to 2010). Scenario 2 assumes progress in education attainment for all cohorts in 2020

Strengthen mobility

• Increase take-up rates for assessment and recognition of foreign qualifications

• Activate migrants’ skills through mainstream and flexible specific programmes

• Put immigrants in contact with employers

Better use of existing skills

• Grant children of immigrants better access to early childhood education and care

• Language training should be adapted to migrants’ skills in destination country

• Strengthen anti-discrimination policy

What can be done?

Recruiting new skills

• Better balance between reliance on employer demand and safeguard mechanisms

• Tools to match employers and potential immigrants, including foreign students

• Promote learning of EU languages abroad

2. Structural aspects of migration

Develop strategies for interacting with these new Diaspora populations

• Some OECD countries have experience of how to benefit from large Diaspora communities, and these should be examples

• Promising paths to pursue include brain circulation, diaspora engagement, language support and reinforcement of networks

What role for the diaspora?

But,

• the longer the stay abroad, the less likely the return - many countries should not expect large scale returns

• those who return may have a wage premium for their work experience abroad, but they face a higher risk of unemployment

2. Structural aspects of migration

For further information:

www.oecd.org/migration jonathan.chaloff@oecd.org

14/11

Thank you for your attention

Free mobility entries in the United Kingdom and Ireland, national data (in thousands)

No surprise that free mobility responds to economic conditions in destination country…

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q22006 2007 2008 2009 2010 2011

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Other EU-8 countries Poland

Ireland:Personal Public Service (PPS) numbers issued to EU-8 citizens

Q3

Q4

Q1

Q2

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Q1

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Q1

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Q1

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Q1

2004 2005 2006 2007 2008 2009 2010 2011

0

10

20

30

40

50

60

70

Other A-8 countries Poland

United Kingdom:Applications for the Worker RegistrationScheme (WRS) by EU-8

citizens

Note: PPS numbers are issued to anyone in Ireland accessing social benefits, public services and certain other public services. Changes in PPS numbers are therefore only a proxy for changes in labour-related flows, as they are issued to children and inactive immigrants.Chaloff, J., et al.  (2012), "Free labour mobility and economic shocks: the experience of the crisis", inOECD,  Free Movement of Workers and Labour Market Adjustment: Recent Experiences from OECD Countries and the European Union, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/9789264177185-5-en