EU – A Single Labor Market has not been accomplished yet

A Single European Labor Market, particularly involving the free movement of workers within Europe, has been a goal of the European community since the 1950s. 

While a Single European Labor Market may create certain drawbacks, it certainly entails benefits that are likely to outweigh the downsides. Labor market experts agree that free labor mobility is important for overall economic welfare, economic integration and society. However, there is also wide agreement among academics and policy makers that a Single European Labor Market has not yet been achieved. In other words, mobility within Europe is not high enough to fully induce the related benefits. Obstacles to free mobility include language and cultural differences, the monetary costs of moving, inefficient housing markets, the lack of harmonization of social security benefits, insufficient international recognition of professional qualifications, disparate education systems and the lack of transparency in job openings. Although low net migration does not necessarily imply that a Single European Labor Market is not functioning, relatively high mobility rates indeed appear as a necessary condition to achieve a Single European Labor Market.

Sensible policy recommendations mainly tackle institutional measures such as a more appropriate use of tools like EURES, in order to increase the distribution of information about jobs across Europe,12 simplifying the recognition of professional qualifications and harmonizing social security systems, such as the pension and unemployment systems as well as harmonizing education and vocational training systems (see also Dhéret et al. 2013). On the other hand, attitudes regarding the EU and free mobility should not be overlooked while moving towards a Single European Labor Market: At least 50 percent of labor market experts in the IZA Expert Opinion Survey consider positive attitudes—by policy makers and citizens alike—towards free mobility to be important to enhance labor mobility. Furthermore, recent developments in Europe, such as a joint letter by ministers of four member states to the European Council emphasizing the threat of welfare migration, as well as a referendum in Switzerland in favor of reintroducing immigration quotas, are very likely to create anti-immigration sentiments within Europe. These evolutions need to be taken seriously and taken into account when creating policy recommendations. For example, labor market policies and work-related migration regulations may influence natives’ opinions about immigrants and attitudes towards immigration.

A Single European Labor Market has not been accomplished yet. This is the clear message from the IZA Expert Opinion Survey 2014. However, do we observe patterns of convergence? To some extent, this is the case. For example, Germany currently serves simultaneously as a role model and as a copy-cat country. A prime example for the former is the country’s vocational education system, and for the latter the introduction of a statutory minimum wage. If such a process continued and mobility increased, Europe could converge towards a Single European Labor Market.

Chosen excerpts by Job Market Monitor. Read the whole story at How Far Away Is a Single European Labor Market?