Labor Mobility and the Integration of European Labor Markets

This paper outlines the importance of labor mobility for the improvement in allocating and distributing economic resources. We are faced with an increasing lack of skilled workers and a growing tendency of unemployment amongst the low-skilled. A central political objective for the future will not only be education policy but also the recruitment of high-skilled workers from international and European labor markets. Additional skilled labor increases well-being and reduces inequality. However, internal European barriers to mobility are difficult to break through. An improved transparency of the European labor market, a greater command of languages and a standardization of the social security system can strengthen mobility. The key to mobility is in promoting the integration of international workers in the European migration process, which can be strengthened through circular migration. The European "blue card" initiative and the opening of labor markets to foreign graduates who have been trained in Europe could set a new course.Migration, migration effects, EU Eastern enlargement, free movement of workers

European Labour Mobility: Challenges and Potentials

European Union economies are pressed by (i) a demographic change that induces population ageing and a decline of the workforce, and (ii) a split labour market that is characterized by high levels of unemployment for low -skilled people and a simultaneous shortage of skilled workers. This lack of flexible high-skilled workers and the aging process has created the image of an immobile labour force and the eurosklerosis phenomenon. In such a situation, an economically motivated immigration policy at the European level can generate welfare improvements. A selective policy that discourages unskilled migrants and attracts skilled foreign workers will vitalize the labour market, foster growth and increase demand for unskilled native workers. The paper summarizes the available economic insights, and suggests (i) the need to harmonize the single -country migration policies across Europe and (ii) that the European Union needs to become an active player on the international labour markets.Labour mobility; Migration; Skilled migration; Unskilled migration; Migration policy; Integration policy

Labor Mobility and the Integration of European Labor Markets

This paper outlines the importance of labor mobility for the improvement in allocating and distributing economic resources. We are faced with an increasing lack of skilled workers and a growing tendency of unemployment amongst the low-skilled. A central political objective for the future will not only be education policy but also the recruitment of high-skilled workers from international and European labor markets. Additional skilled labor increases well-being and reduces inequality. However, internal European barriers to mobility are difficult to break through. An improved transparency of the European labor market, a greater command of languages and a standardization of the social security system can strengthen mobility. The key to mobility is in promoting the integration of international workers in the European migration process, which can be strengthened through circular migration. The European “blue card” initiative and the opening of labor markets to foreign graduates who have been trained in Europe could set a new course.migration, migration effects, EU Eastern enlargement, free movement of workers

Costs and Benefits of Labour Mobility Between the EU and the Eastern Partnership Partner Countries. Country Report: Germany

This study provides an overview of the situation of migrants from Eastern Partnership (EaP) countries in Germany, with this chapter particularly focusing on the labour market integration of EaP migrants, their access to social assistance and social services, and the impact of these flows on the German labour market. We then provide an informed view of the scope for future increased mobility between Germany and EaP countries, in the light of the skills needs and demographic trends expected in the next 10 to 20 years. Based on the results, the following conclusions can be drawn. More than half of EaP migrants come to Germany for work and study purposes. Family reunification is important for Ukrainians and Moldovans. Work and family purposes are the two main residence grounds for migrants from Moldova and Ukraine, while the other nationalities hold residence permits for reasons of study and work in most cases

Ethnic Self-Identification of First-Generation Immigrants

This paper uses the concept of ethnic self-identification of immigrants in a twodimensional framework. It acknowledges the fact that attachments to the home and the host country are not necessarily mutually exclusive. There are three possible paths of adjustment from separation at entry, namely the transitions to assimilation, integration and marginalization. We analyze the determinants of ethnic selfidentification in this process using samples of first-generation immigrants for males and females separately, and controlling for pre- and post-migration characteristics. We find strong gender differences and the unimportance of a wide range of premigration characteristics like religion and education at home.Ethnic self-identification, first-generation immigrants, gender, ethnicity

Work and Money: Payoffs by Ethnic Identity and Gender

Upon arrival in the host country, immigrants undergo a fundamental identity crisis. Their ethnic identity being questioned, they can be classified into four states – assimilation, integration, separation and marginalization. This is suggested by the ethnosizer, a newly established measure to parameterize a person's ethnic identity, using individual information on language, culture, societal interaction, history of migration, and ethnic self-identification. In what state individuals end up varies among immigrants even from the same country. Moreover, the quest for ethnic identity affects women and men differentially. This paper contends that ethnic identity can significantly affect the attachment to and performance of immigrants in the host country labor market, beyond human capital and ethnic origin characteristics. Empirical estimates for immigrants in Germany show that ethnic identity is important for the decision to work and significantly and differentially affects the labor force participation of men and women. Women who exhibit the integrated identity are more likely to work than women who are German assimilated; this does not hold for men. However, once we control for selection in the labor market and a slew of individual and labor market characteristics, ethnic identity does not significantly affect the earnings of men or women immigrant workers.integration, immigrant assimilation, ethnic identity, ethnicity, ethnosizer, ethnic earnings

Circular Migration: Counts of Exits and Years away from the Host Country

The economic literature has largely overlooked the importance of repeat and circular migration. The paper studies this behavior by analyzing the number of exits and the total number of years away from the host country using count data models and panel data from Germany. More than 60% of migrants from the guestworker countries are indeed repeat or circular migrants. Migrants from European Union member countries, those not owning a dwelling in Germany, the younger and the older (excluding the middle ages), are significantly more likely to engage in repeat migration and to stay out for longer. Males and those migrants with German passports exit more frequently, while those with higher education exit less; there are no differences with time spent out. Migrants with family in the home country remain out longer, and those closely attached to the labor market remain less; they are not leaving the country more frequently.Repeat migration, circular migration, guestworkers, minorities, count data

Bad Bank(s) and Recapitalization of the Banking Sector

With banking sectors worldwide still suffering from the effects of the financial crisis, public discussion of plans to place toxic assets in one or more bad banks has gained steam in recent weeks. The following paper presents a plan how governments can efficiently relieve ailing banks from toxic assets by transferring these assets into a publicly sponsored work-out unit, a so-called bad bank. The key element of the plan is the valuation of troubled assets at their current market value - assets with no market would thus be valued at zero. The current shareholders will cover the losses arising from the depreciation reserve in the amount of the difference of the toxic assets' current book value and their market value. Under the plan, the government would bear responsibility for the management and future resale of toxic assets at its own cost and recapitalize the good bank by taking an equity stake in it. In extreme cases, this would mean a takeover of the bank by the government. The risk to taxpayers from this investment would be acceptable, however, once the banks are freed from toxic assets. A clear emphasis that the government stake is temporary would also be necessary. The government would cover the bad bank's losses, while profits would be distributed to the distressed bank's current shareholders. The plan is viable independent of whether the government decides to have one centralized bad bank or to establish a separate bad bank for each systemically relevant banking institute. Under the terms of the plan, bad banks and nationalization are not alternatives but rather two sides of the same coin. This plan effectively addresses three key challenges. It provides for the transparent removal of toxic assets and gives the banks a fresh start. At the same time, it offers the chance to keep the cost to taxpayers low. In addition, the risk of moral hazard is curtailed. The comparison of the proposed design with the bad bank plan of the German government reveals some shortcomings of the latter plan that may threaten the achievement of these key issues.Financial crisis, financial regulation, toxic assets, Bad Bank

Unemployment Dynamics among Migrants and Natives

Unemployment rates are often higher for migrants than for natives. This could result from longer periods of unemployment as well as from shorter periods of employment. This paper jointly examines male native-migrant differences in the duration of unemployment and subsequent employment using German panel data and bivariate discrete time hazard rate models. Compared to natives with the same observable and unobservable characteristics, unemployed migrants do not find less stable positions but they need more time to find these jobs. The probability of leaving unemployment also varies strongly between ethnicities, while first and second generation Turks are identified as the major problem group. Therefore, policy should concentrate on the job finding process of Turkish migrants to fight their disadvantages on the labor market.Unemployment duration, employment stability, bivariate hazard rate models, migration, ethnicity

Agenda 2020: Strategies to Achieve Full Employment in Germany

This strategy paper by the Institute for the Study of Labor (IZA) shows ways in which Germany once more can attain full employment in the coming decade. Much of what the previous government's "Agenda 2010" has put into motion has clearly steered labor market development in the right direction. The reforms are one of the main reasons why Germany has been more resistant to the recent financial and economic crisis than other countries. While these achievements should not be called into question, further action is necessary. The IZA concept includes the following elements: (1) Education reform: Early childhood education must be improved. Social background should no longer determine future career prospects. More independence and competition between schools and universities would improve the quality of education. Selection of students into different secondary school tracks should occur at a higher age. The dual system of apprenticeship training could be shortened. College tuition fees could be replaced by a graduate tax. (2) Welfare state reform: A consistent implementation of the principle of reciprocity would create additional employment incentives and make working for a living worthwhile again even for the low-skilled. Workfare is socially just and promotes independence rather than producing dependency. Child benefits should be granted primarily as vouchers. (3) Job placement reform: The problem groups of the labor market need one-stop support tailored to their individual needs as soon as they become unemployed. IZA proposes the creation of job centers that act independently from local and federal authorities in order to avoid the organizational maze of unclear responsibilities. (4) Immigration policy reform: Germany needs high-skilled immigrants to cope with demographic change and skilled labor shortages. A selection system for permanent immigrants and a market-based solution for temporary immigrants would substantially increase the economic benefits of immigration and create additional momentum for the realization of full employment.labor market policy, Agenda 2010, Hartz reforms, workfare, job center, education, demography, migration policy