Labour mobility as an adjustment mechanism

The movement of workers from one EU country to another has become an increasingly important adjustment mechanism for the European economy, particularly since the introduction of the euro. This section assesses the economic adjustment role played by labour mobility (i.e. intra-EU labour migration). It first looks at stylised facts on mobility in the EU before going on to analyse the reasons why workers move between countries. The analysis shows 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. The final part of the section shows that workers have become more likely to move to another EU country in response to economic shocks affecting only some countries. Movements in response to shocks have increased significantly since the introduction of the euro. The analysis demonstrates that real wages also became more responsive to asymmetric shocks during the same period.