Labour mobility and labour market adjustment in the EU

Alfonso Arpaia, Aron Kiss, Balazs Palvolgyi and Alessandro Turrini

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.

MoreLess

Year of publication:	2016
Authors:	Arpaia, Alfonso ; Kiss, Áron ; Palvolgyi, Balazs ; Turrini, Alessandro
Published in:	IZA journal of migration : IZAJOM. - Heidelberg : SpringerOpen, ISSN 2193-9039, ZDB-ID 2693175-8. - Vol. 5.2016, 21, p. 1-21
Subject:	Labour mobility \| Geographic mobility \| Migration \| Adjustment \| Asymmetric shocks \| Optimal currency areas \| European Union \| Arbeitsmobilität \| EU-Staaten \| EU countries \| Schock \| Shock \| Regionale Arbeitsmobilität \| Regional labour mobility \| Arbeitsmigranten \| Migrant workers \| Arbeitsmarkt \| Labour market \| Theorie \| Theory \| Optimaler Währungsraum \| Optimum currency area \| Währungsunion \| Monetary union \| Binnenwanderung \| Internal migration \| Regionaler Arbeitsmarkt \| Regional labour market