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Report shows worker mobility key to tackle EU demographic and skills challenges

18/09/2014 Report shows worker mobility key to tackle EU demographic and skills challenges

To address the effects of population ageing, the EU will need to close the gender gap and increase the participation of young and older workers in the labour market, but mobility and migration also have a key role to play. This is the main finding of the joint Commission-OECD report on matching economic migration with labour market needs published today.

Demographic decline and skills shortages

In Europe the working-age population (15-64) is projected to decline by 7.5 million (-2.2%) between 2013 and 2020, while it will grow in the same proportion in the OECD area as a whole. Under a scenario with zero net migration, the working-age population of the 28 EU countries would be expected to decline even more, by up to 11.7 million (-3.5%) by 2020.

The implications are not only demographic: because the labour market is dynamic and occupations are changing, skills shortages and skills mismatches will become crucial issues in the EU. According to Eurofound's 2013 European Company Survey, despite the slack in the labour market, 40% of EU companies have difficulties finding workers with the right set of skills.

Overall, available evidence suggests that in most OECD countries labour needs over the next decade will be concentrated in specific occupations – largely requiring high skills, but also at intermediate skill levels.

Against this background, the joint EU-OECD report outlines three complementary policy responses:

  1. Fostering intra-EU labour mobility to ensure a better allocation of skills
  2. Better integrating non-EU migrants to ensure a smarter use of their skills
  3. Attracting the skilled migrants needed on the EU's labour market

Fostering intra-EU labour mobility

The contribution of EU mobile workers to global employment growth is clear: people moving across EU countries have a higher employment rate (68%) than nationals (64.5%). Moreover, by transferring labour and skills from regions and countries where they are less in demand to those where they are needed, intra-EU mobility makes a more efficient use of human resources.

According to the report, policy action will be needed to further remove obstacles to mobility. Fostering intra-EU labour mobility will also require stronger skill matching tools and greater promotion of language learning.

Better integrating non-EU migrants

In 2013, non-EU nationals residing in the EU had an employment rate 12 points below the average among nationals (52.6% versus 64.5%) and the gap was even more pronounced when comparing those who have tertiary education.

The report highlights that this significant waste of human capital could be addressed notably by:

  • making it easier to recognise foreign qualifications,
  • making sure that immigrants have access to the most efficient active labour market programmes, and
  • providing language training adapted to migrants’ skills in destination countries.

Attracting the skills needed on the EU's labour market

There is currently a low level of skilled labour migration from non-EU countries to most EU Member States, despite the fact that countries have liberalised migration regulations. According to the report, it is notably due to the system of legal admission and the fact that, in most countries, employers are reluctant to hire from abroad.

It underlines several options in future actions such as striking a better balance between reliance on employer demand and safeguard mechanisms and improving matching tools to enable employers to identify potential migrant workers, including foreign students.