Graph of the week: Cross-border labour mobility in the euro area

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The number of euro area workers employed in another Member State has increased steadily over the last decade (data from Eurostat’s Labour Force Survey; the survey provides data on citizenship and not on commuters, i.e. workers who cross national borders on a daily basis). Workers from new Member States have caught up, and most of the increase since 2006 can be attributed to them. By 2015 the number of cross-border workers from new Member States had surpassed the number of workers from the old ones. Overall, there was a minor slowdown during the crisis, but by 2015 the share of euro area workers who are citizens of another EU country had reached almost 4%.

In the event of an asymmetric shock hitting the home country, cross-border workers can absorb part of that shock through their income from abroad. However, there is quite a disparity among Member States regarding the share of cross-border labour from another EU Member State. In 2015, it varied between more than 10% in Ireland and Cyprus to as low as 0.6% in Portugal and below or close to 2 % in France, Finland, the Netherlands, Malta and Greece. Luxembourg, with its small size and high expatriate population, is an outlier. Workers from new Member States are a clear majority of EU workers in Ireland, Austria, Spain and Italy. This diversity suggests that the pattern of cross-border risk sharing through cross-border employment is quite different depending on the country concerned.

There is still quite a lot to be done to increase the impact of cross-border labour mobility on risk sharing among euro area Member States. The slow-down during the crisis shows that the aggregate number of cross-border workers within the euro area is pro-cyclical. This may help adjustment, for example when cross-border workers return to their countries of origin after a shock in the host country. 

Related publication: Quarterly Report on the Euro Area (QREA), Vol.15, No.2 (2016)