“Action and Reaction” – the Impact of European Youth Mobility on the Economy and the Labour Market

Within the framework of the international MOVE project, we are carrying out quantitative data analysis for the countries of the European Union / EFTA to reveal the labour market and economic effects of youth mobility. Following the Introduction, the theoretical framework of youth mobility is described including the centre – periphery model in the analysis of youth mobility, the brain-drain effect involved in youth mobility and the theories dealing with the effect of youth mobility on both labour market and economic growth. Then, two models describing the effects of incoming youth mobility on youth unemployment and prosperity are elaborated upon, in which economic, social and state indicators are also taken into consideration. In the third section, panel OLS regression analysis is used for modelling. 30 European countries are covered with data for ten years (2004-2013). The analyses are carried out for three groups of countries separately: centre-receiving countries, periphery-sending countries and all the EU / EFTA countries included. In the analysis, other economic, social and state indicators that may influence youth unemployment rate and per capita GDP of the receiving countries (such as minimum wages, FDI outward, adult education level or urban population) are controlled for. Our hypotheses include that the increase of incoming youth mobility has a beneficial effect on the labour market and on economic growth, i.e. it decreases youth unemployment and increases per capita GDP in the receiving countries in all the three cases. The next section, “Results of the analysis” reveals that in all the examined country groups, incoming youth mobility decreases youth unemployment rate and promotes economic growth in the receiving countries. Therefore, both of our hypotheses have been failed to be rejected. The Summary section provides the main consequences and conclusions of the analysis. Our results can contribute to the elaboration of the Human Resource Strategy of the European Union. It has become obvious that the benefits in both the sending and receiving countries can be increased by promoting youth mobility. The former model including two actors (the migrant and the receiving country) has been extended with the sending country, the organizing institution and multinational and domestic companies. From all actors, flexibility is necessary in migration issues to ensure the free movement of potential labour force.