Migrating Workers and Jobs: A Challenge to the European Social Model?

15 Pages Posted: 27 Jan 2006

See all articles by Axel Heitmueller

Axel Heitmueller

London Business School; Prime Minister's Strategy Unit; IZA Institute of Labor Economics

Simon John Commander

London Business School; IZA Institute of Labor Economics

Laura D'Andrea Tyson

Haas School of Business, UC Berkeley

Date Written: January 2006

Abstract

This paper proceeds from two key assumptions. The first is that European countries are likely to face increased immigration of individuals. The second is that the emigration of jobs from Europe to other regions of the world through offshoring is also likely to increase. It has been widely argued that both factors are contributing to growing insecurity among European workers. This paper has two goals: first, to put the wider discussion of job displacement and wage changes resulting from immigration and offshoring on a firmer empirical foundation; and second, to explore changes in the European social model that will allow the European economies to adjust to the challenges and respond to the opportunities resulting from increased global competition from emerging market economies. Both immigration and offshoring confront European policy makers with trade-offs between efficiency and equity. These tradeoffs can be eased by active labour market and education policies to enhance the flexibility and skills of European workers so that they enjoy the productivity advantages necessary to support high wages and compete in the global economy. Such policies must combine an appropriate balance of incentives, obligations and benefits that focus on the overall employability of workers rather than on the number of jobs in a particular company or sector. A key challenge in designing such policies is how to combine generous income support for jobseekers while at the same time strengthening their incentives to find and accept available jobs.

Keywords: offshoring, migration, social model, displacement

JEL Classification: J3, J6, H2, L0

Suggested Citation

Heitmueller, Axel and Commander, Simon John and Tyson, Laura D'Andrea, Migrating Workers and Jobs: A Challenge to the European Social Model? (January 2006). IZA Discussion Paper No. 1933. Available at SSRN: https://ssrn.com/abstract=878666 or http://dx.doi.org/10.2139/ssrn.878666

Axel Heitmueller (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Prime Minister's Strategy Unit ( email )

Admiralty Arch
London, SW1A 2WH
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Simon John Commander

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Laura D'Andrea Tyson

Haas School of Business, UC Berkeley

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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