Free Labour Mobility and Economic Shocks: The Experience of the Crisis

1. Free Labour Mobility and Economic Shocks: The Experience of the Crisis JOINT EC/OECD CONFERENCE ON GROWING FREE LABOUR MOBILITY AREAS AND TRENDS IN INTERNATIONAL MIGRATION 14 November 2011, Brussels International Migration Division Directorate for Employment, Labour and Social Affairs, OECD

2. Introduction • The crisishit European OECD countries just after twoenlargements • Prior tothecrisis, in therecipient countries forwhichstandardiseddataareavailable, freemobilityinflowsaccountedforabout 15% ofnewentriesintotheworking-agepopulation • The crisisdidleadto an increaseofunemploymentratesbythreepercentagepoints on average, but therehasbeenwidevariation • Threekeyquestions: • Wererecentfreemobilitymigrantsharderhitbythecrisisthanthe native-born? • Howhasfreemobilityreactedtothecrisis? • Hasfreemobilitycushionedpartoftheshockofthecrisis in hard-hit countries andregions?

3. Overall, the observed increase in unemployment among free-mobility migrants was less than among the native-born Percentage point change in unemployment rate between 2008 and 2010

4. With the crisis, free mobility declined in some countries, but it continued to increase in others… Permanent-type free-movement migration per thousand population in selected OECD countries in 2007 and 2009

5. …and a similar trend is observed in comparison with other migration flows Change in the share of free-movement among permanent-type inflows in 2009, compared with 2007 (in %-points)

6. Even in most hard-hit countries, stocks of free mobility migrants did not decline Evolution of the foreign population from the EU-27/EFTA with a valid permit in Spain (in thousands), 2005-2011 Part of the continuingincreaseis due to ongoingfamily migration

7. …But there have also been significant shifts within the EU-8 → relative decline in Polish emigration Free mobility entries in the United Kingdom (in thousands), national data

8. These shifts are associated with different situations in origin countries, which is also visible in return migration rate of returnees

9. Free mobility appears to have cushioned asymmetric shocks to a certain extent Data: Regional data (NUTS-2) from the EU-LFS, 2000-2010 Methodology: Look at evolution of unemployment relative to that in the free mobility area as a whole, and subsequent response in free movement flows Result: Due to free mobility, the increase in unemployment in the hardest-hit regions in the EU-27/EFTA area is reduced by about 6% per year at the maximum (preliminary findings)

10. Conclusion • Overall, recent free mobility migrants have been less hard hit by the crisis than the native-born – to which degree this is due to return migration is unclear • Although free mobility flows declined, it did not stop during the crisis • Family migration has been ongoing • Several countries lifted transitional arrangements during the crisis • Romania and Bulgaria joined the EU in 2007 • Prospects for economic development remained bleak in key origin countries – except Poland • Although free mobility has cushioned the shock to a certain extent, overall its impact has been small