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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.

Commissioner for Employment, Social Affairs and Inclusion László Andor commented “This joint report with the OECD offers valuable guidance on the serious demographic challenges ahead. Ensuring fair labour mobility within the EU, improving training to close skills gaps, ensuring decent working conditions to workers and better integration of non-EU workers can be part of the solution to population ageing and future skill shortages in the European labour market”.

Commissioner for Home Affairs, Cecilia Malmström said: "It is a reality today that many EU countries cannot meet their labour needs with a purely home-grown workforce. The question is not whether we need migrants but how to make the most of migration. To reap the benefits of migration we need open, transparent, realistic policies that are active on integration and strong political leadership".

Director for Employment Labour and Social Affairs of the OECD, Stefano Scarpetta said: “It may surprise people that we talk about matching economic migration with labour market needs at a time when many European countries face persistent unemployment and a growing backlash against migration. Yet Europe would already be in better shape with a more efficient use of migrants’ skills. Successful integration of migrants and their children, and more efficient labour migration management systems responding to real needs, are necessary to strengthen social cohesion as much as they are to increase Europe’s competitiveness”.

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's2013 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.

Background

The joint research project on Matching Economic Migration with Labour Market Needs has been carried out by the European Commission and the OECD over three years. In 2012, a first publication was released: Free Movement of Workers and Labour Market Adjustment - Recent Experiences from OECD Countries and the European Union. Today, the final report on Matching Economic Migration with Labour Market Needs is published, together with a short Policy Brief.

Since the 2012 Employment package outlined the vision of a genuine EU labour market various initiatives have been taken to remove barriers to mobility, such as the recently adopted EU Directives on facilitating the exercise of rights to free movement (IP/14/421) and on acquisition and preservation of supplementary pension rights (IP/14/445). Other initiatives include the proposal to further improve the pan-European job search network EURES (IP/14/26) and the enforcement Directive on posted workers (IP/14/542).

The Commission has also taken measures to support the integration of non-EU nationals, notably through theIntegration Fund. It has also provided policy guidance on labour market integration of migrant in its yearlyCountry Specific Recommendations to Member States where the employment gaps between migrants and nationals are the most pronounced.

Further information

Joint EU-OECD Report 'Matching economic migration with labour market needs'

Joint EU-OECD Policy brief

László Andor's website

Follow @László AndorEU on Twitter

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