Host cities profit from labour migration: study

  

The European Commission published an independent study yesterday (11 February) saying that labour migration is profitable to the host communities. The study focuses on six European cities, chosen for the multinational composition of their population: Barcelona, Dublin, Hamburg, Lille, Prague and Turin.

EU citizens move to other countries of the Union mainly for job opportunities, not for “social benefit tourism”, and are on average younger and more likely to find an occupation, the study says.

It shows that for all six cities the inflow of younger, working age EU citizens has had a positive economic impact.

For example in Turin, a local evaluation shows that tax revenues from foreigners on the whole brought a net benefit of €1.5 billion to national public finances.

The study also shows that newcomers have helped fill gaps in local labour markets, contributed to growth in new sectors and have helped balance out ageing populations. It finds that mobile citizens are often overqualified for the jobs they take up, may be paid less and at the same time do not always benefit from the same access to housing and education.

"Free movement is a benefit for Europe, its citizens and its economies … It would, however, be the wrong response to question the right to free movement," said Commission Vice-President Viviane Reding, responsible for justice, fundamental rights and citizenship said during the report’s presentation.

The study was presented at a meeting with more than 100 mayors and representatives of local authorities from around Europe who met to discuss current challenges and opportunities to do with the free movement of citizens in the EU. The event took place at a mayors' conference in the Committee of the Regions in Brussels.

The main findings of the study are:

  • EU citizens move mainly because of job opportunities and are, on average, younger and more economically active than the local population in the cities examined;
  • The inflow of younger, working age EU citizens in the selected cities is helping to address the demographic challenges of an ageing population and a shrinking labour force;
  • They are also helping to fill gaps in the labour market, either taking up mainly low-skilled jobs (Turin and Hamburg), contributing to growth of new sectors (such as ICT in Dublin), or helping create new business ventures (as in Turin and Hamburg).

The study also outlines some negative findings:

  • Mobile citizens are more likely to be overqualified than nationals (taking up jobs below their qualification) which could imply a wasting of skills, mitigating the potential benefits of intra-EU mobility;
  • Wage differentials emerged in some cases between nationals and mobile EU citizens (who most often earn less), although evidence is quite limited;
  • Mobile citizens do not always benefit from the same opportunities in terms of housing and inclusion of children in schools, although they work and pay taxes.

What apparently is lacking in the study is the impact of migration on the new EU member countries from where a large number of the immigrants move to more prosperous older member states.

According to a recent census, the population of Bulgaria is shrinking at an alarming rate. The EU newcomer, who has now 7,351,633 inhabitants, has lost 1.5 million of its population since 1985, a record in depopulation not just for the EU, but by global standards too [more].

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Comments

A Londoner's picture

One major issue for London and the South-East of England is that migration is exacerbating the infrastructure problem. We have a housing shortage, congested roads, railways, airports and a shortage of school buildings.
The economic studies I have seen tend to underestimate this problem.

The result is that I am taxed to provide infrastructure projects in the new accession countries to the east and then taxed again to provide extra infrastructure in the South East of England when they move here.

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