Arbeitspapier

Labour mobility and labour market adjustment in the EU

This paper assesses macroeconomic determinants of labour mobility and its role in the adjustment to asymmetric shocks. First, the paper develops stylised facts of mobility at the national and sub-national levels in the EU. Then, it explores the macroeconomic determinants of bilateral migration flows. Econometric evidence suggests that labour mobility increases significantly when a country joins the EU. While euro area membership seems not to be associated with an overall rise in the magnitude of mobility flows, workers do appear more ready to move from countries where unemployment is high to those where it is lower. Thirdly, the paper looks at mobility as a channel of economic adjustment by means of a VAR analysis in the vein of Blanchard and Katz (1992). Results indicate that mobility absorbs about a quarter of an asymmetric shock within 1 year. Movements in response to shocks have almost doubled since the introduction of the euro. Real wages have also become more responsive to asymmetric shocks during the same period.

Language
Englisch

Bibliographic citation
Series: IZA Policy Paper ; No. 106

Classification
Wirtschaft
Geographic Labor Mobility; Immigrant Workers
Unemployment: Models, Duration, Incidence, and Job Search
Subject
labour mobility
geographic mobility
migration
gravity
adjustment
asymmetric shocks
optimal currency areas
European Union

Event
Geistige Schöpfung
(who)
Arpaia, Alfonso
Kiss, Aron
Palvolgyi, Balazs
Turrini, Alessandro
Event
Veröffentlichung
(who)
Institute for the Study of Labor (IZA)
(where)
Bonn
(when)
2015

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Arpaia, Alfonso
  • Kiss, Aron
  • Palvolgyi, Balazs
  • Turrini, Alessandro
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2015

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