Globalization, technological change, and migration form three major challenges for European welfare states in the 21st century. These challenges are regarded as important sources of inequality on the labour market. Whereas the existing literature has mainly been focused on the sectors and...

This paper studies the costs and benefits of the adoption of the policy of free movement for workers. For the countries to agree on uncontrolled movement of workers, the short run costs must be outweighed by the long term benefits that result from better labor market flexibility and income...