Effects of Migration on European Labour Market Equilibrium

Abstract

This paper investigates the labour market effects of migration-related supply shocks on labour market. Immigration has become important socio-economic phenomenon for many countries in globalized world. It is therefore the subject of increasingly vigorous political debate. Focusing mostly on European migration, we provide an evaluative review which aims to enhance the understanding of migration and its potential role for development. However, regardless of (i) the demographic change that induces population ageing, low fertility rates, and increase in life expectancy, as well as (ii) a labour market that is characterized by high levels of unemployment for low-skilled people and a simultaneous shortage of skilled workers that the EU is facing today, it still lacks the common immigration policy that would address this issues. In such a situation, an economically motivated common immigration policy at the European level can result in welfare improvements.