Labor migration is expected to be a big part of the solution (if it is beneficial to both host country & person) to tackle this problem.

Why “no migration” is not a solution if the EU wishes to remain viable:

• In 2005 Europe had almost 200 million working people. If we stop migration - close the borders internally in the EU and externally from outside the EU – Europe’s working force in 2050 will be lacking 55 million people. If we keep the borders as they are now - open in the EU15 and semi-open for the EU8 and mostly closed to non-EU migration - then Europe will be lacking 30 million people in the workforce in 2050.
• In 2005 Europe has almost 300 million people in the working age group (not all people in this potential workforce are employed). Due to the ageing effect there will be 50 million less people in this age group in 2050. While the number of elderly will increase, costs for care will too, but less employment means less contribution in taxes and social security, which is a double burden on the welfare state and health care etc.

Lisbon targets

Besides the issue of ageing and decreasing populations, the EU25 has to reach the Lisbon targets in 2010:

1. Participation has to be 70% = this might be realistic provided economic development is positive and participation has to grow faster than it has in the last 5 years.
2. Unemployment has to be 4% = with unemployment in 2006 being 8.2%, which is the lowest in 2 decades it will not reach 4% in the coming years plus:
   -     Female employment has to be 60% = will be difficult to reach in 2010 (now 56.2%), since within Europe there are structural differences with female employment, in most countries being 10-15% less than male employment. In several countries the ‘gender gap’ is even higher (Eastern Europe and Italy)
   -     Elderly employment (55-64 years old) has to be 50% = may be reached but not in Poland, Italy, Austria, Luxemburg, Belgium, Hungary, France.

Participation projections 2005-2050

Large labor market effects of an ageing EU population are expected for 2050.

• Baseline scenario = assuming current values remain constant until 2050 (birth rate, life expectancy, net migration)
• Low Growth scenario = assuming all values are below current ones
• High Growth scenario = assuming all values are higher than current ones
• No Migration scenario = assumption like baseline but with no net migration (immigration minus emigration).

The number of working persons will decline, even if we have a High Growth scenario. In Baseline scenario the working age group will decline from 300 million à 255 million until 2050. The ageing of our society implies that the elderly population will grow faster than the working age population è lower employment in all 4 scenarios, means extra burden on welfare state & health care + less contribution in taxes and social security.

Solutions to increase participation rates

• Increase number of people working: this only works for countries with a pool of inactive people such as women and elderly people
• Increase the age when people stop working: will only solve a small part of the problem (current practice in many countries)
• Increase productivity (hard to predict) by increasing the number of hours worked per week: will be difficult since there’s a trend of decreasing working hours in the last decades
• Labor migration: will have the strongest effect on participation rates.

Part-Time work

• Mostly women working less than 30 hours/week
• Eastern Europe data does not exhibit evidence yet that part-time is an important aspect of labor market
• Popular with young people
• Part-Time can be a preferred choice for many people- contrary to popular belief
• The high and rising share of part-time work is some countries together with rising participation suggest that not all (new) employees prefer full time jobs
• Part-time is less frequent among high skilled in all countries and more frequent among low skilled in all countries except Switzerland.

Temporary Work (agency and limited duration)

• In many countries temp work has been an important component of employment growth in the last one or two decades
• Temping is popular with youth (15-24) and women
• Temping can be a preferred choice and also a second choice (like part-time)
• Popularity/choice of temp work is also related to employment protection legislation of regular jobs (more protection for regular jobs= more need for temping)
• Temping is popular among low-skilled (except Sp, PL, PT, IT) because they are still in education or because it provides access to labor market for school leavers
• Temping differs in sectors among countries and there is no pattern
• Temping functions as a stepping stone towards permanent jobs (45-65% of all temps from 1998 was working in a perm job 3 years later (OECD data)
• Temping is popular with immigrants as it provides access to labor market (especially SP= 50% of total immigrants vs. only 24% of total Spanish born temps).

Agency Work

• The penetration rate (average daily number of Agency Work as % of total employment) is increasing in all countries à UK, NL, BL, FR most common.
• Size of AW differs between countries because legislation also differs between countries. AW use has been recently de-regulated in many countries è increase in the use of this type of employment
• Temp workers are more often male (except in GR, IT, SW, AU) and mostly are under 30 years old (in NL half of total= under 25 years old reflecting the study & work pattern).

 Immigration

• Migration includes intra EU and also coming from outside the EU 27
• Type of migration flow and reasons for migration differ per country
• Net migration is important (immigration minus emigration) as it is this that fills the employment gap
• Currently most immigrant absorbing countries (SP, IT, IR) have transformed from clear emigration countries not so long ago
• Generally (and on average) in the EU 25 immigrants have an unemployment rate which is twice the rate of native population
• Interesting in the example of the Czech Republic where unemployment is higher among the native populationà immigrants there offers skills that the native people do not have
• In the Med countries & LU, immigrant employment participation rate is above average
• Immigrants & Part-Time work is only a case in PL, IT, SP….They are more often than natives in full-time jobs
• In every country (except from Switzerland and LU) the share of temporary jobs is much higher among immigrants
• Immigrants cannot be taken as one homogeneous group. In most countries 2 migrant groups can be characterized: one relatively high skilled and one relatively low skilled-àIn 13 out of 20 countries immigrants are overrepresented among the higher educated and in 11 countries they are overrepresented among the lower educated
• When looking at immigrants from Eastern Europe they turn out to be on average high skilled in the one country and on average low skilled in the other.

Source: Randstad