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Labour mobility and labour market adjustment in the EU

Author

Listed:
  • Alfonso Arpaia

    () (European Commission)

  • Aron Kiss

    (European Commission)

  • Balazs Palvolgyi

    (European Commission)

  • Alessandro Turrini

    (European Commission)

Abstract

Abstract This paper assesses the role of labour mobility in the adjustment to asymmetric economic shocks in the EU. After presenting a series of stylised facts of mobility in the EU, it assesses mobility as a channel of economic adjustment by means of a vector autoregression (VAR) analysis in the vein of Blanchard and Katz (BPEA 1:1–75, 1992). Results indicate that, over the period 1970–2013, mobility absorbed about a quarter of an asymmetric shock within 1 year. Movements in response to shocks have almost doubled since the introduction of the euro. In contrast to previous papers on the labour market adjustment in the EU, the response of wages is integrated to the analysis. It is found that real wages have also become more responsive to asymmetric shocks. JEL Classification: J61, J64

Suggested Citation

  • Alfonso Arpaia & Aron Kiss & Balazs Palvolgyi & Alessandro Turrini, 2016. "Labour mobility and labour market adjustment in the EU," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-21, December.
  • Handle: RePEc:spr:izamig:v:5:y:2016:i:1:d:10.1186_s40176-016-0069-8
    DOI: 10.1186/s40176-016-0069-8
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    Cited by:

    1. Thomas Y. Mathä & Stephen Millard & Tairi Rõõm & Ladislav Wintr & Robert Wyszynski, 2019. "Shocks and labour cost adjustment: Evidence from a survey of European firms," BCL working papers 128, Central Bank of Luxembourg.
    2. Helge Berger & Giovanni Dell’Ariccia & Maurice Obstfeld, 2019. "Revisiting the Economic Case for Fiscal Union in the Euro Area," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(3), pages 657-683, September.
    3. Gaetano Basso & Francesco D’Amuri & Giovanni Peri, 2019. "Immigrants, Labor Market Dynamics and Adjustment to Shocks in the Euro Area," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(3), pages 528-572, September.
    4. Angana Banerji & Bergljot B Barkbu & James A John & Tidiane Kinda & Sergejs Saksonovs & Hanni Schoelermann & Tao Wu, 2015. "Building a Better Union; Incentivizing Structural Reforms in the Euro Area," IMF Working Papers 15/201, International Monetary Fund.
    5. Gregory, Terry & Salomons, Anna & Zierahn, Ulrich, 2016. "Racing With or Against the Machine? Evidence from Europe," Annual Conference 2016 (Augsburg): Demographic Change 145843, Verein für Socialpolitik / German Economic Association.
    6. Pastore, Francesco & Semerikova, Elena, 2020. "It’s the way people move! Labour migration as an adjustment device in Russia," GLO Discussion Paper Series 445, Global Labor Organization (GLO).
    7. Martin Kahanec & Martin Guzi, 2017. "How immigrants helped EU labor markets to adjust during the Great Recession," International Journal of Manpower, Emerald Group Publishing, vol. 38(7), pages 996-1015, October.
    8. Julia Jauer & Thomas Liebig & John P. Martin & Patrick A. Puhani, 2019. "Migration as an adjustment mechanism in the crisis? A comparison of Europe and the United States 2006–2016," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(1), pages 1-22, January.
    9. Pierluigi, Beatrice & Sondermann, David, 2018. "Macroeconomic imbalances in the euro area: where do we stand?," Occasional Paper Series 211, European Central Bank.
    10. Florence Huart & Médédé Tchakpalla, 2019. "Labor Market Conditions and Geographic Mobility in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(2), pages 263-284, June.
    11. Massimo Anelli & Gaetano Basso & Giuseppe Ippedico & Giovanni Peri, 2019. "Youth Drain, Entrepreneurship and Innovation," NBER Working Papers 26055, National Bureau of Economic Research, Inc.
    12. Ivana Drazenovic & Marina Kunovac & Dominik Pripuzic, 2018. "Dynamics and determinants of emigration: the case of Croatia and the experience of new EU member states," Public Sector Economics, Institute of Public Finance, vol. 42(4), pages 415-447.
    13. Gajewski Pawe³, 2018. "Demand and Supply Shock Symmetry across Polish Voievodships," Lodz Economics Working Papers 5/2018, University of Lodz, Faculty of Economics and Sociology.
    14. Harald Oberhofer & Christian Glocker & Werner Hölzl & Peter Huber & Serguei Kaniovski & Klaus Nowotny & Michael Pfaffermayr & Monique Ebell & Nikolaos Kontogiannis, 2016. "Single Market Transmission Mechanisms Before, During and After the 2008-09 Crisis. A Quantitative Assessment," WIFO Studies, WIFO, number 59156.
    15. Constant, Amelie F. & Zimmermann, Klaus F., 2017. "Challenged by migration: Europe's options," MERIT Working Papers 018, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Amélie Barbier-Gauchard & Agathe Simon, 2019. "Quel instrument budgétaire pour la zone euro ?," Bulletin de l'Observatoire des politiques économiques en Europe, Observatoire des Politiques Économiques en Europe (OPEE), vol. 40(1), pages 45-50, July.

    More about this item

    Keywords

    Labour mobility; Geographic mobility; Migration; Adjustment; Asymmetric shocks; Optimal currency areas; European Union;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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