Geographical and Job Mobility in the EU

Geographical and Job Mobility in the EU Project Empirical evidence on job and geographical mobility in the European Union Tender No. VT/2005/0107 DG Employment, Social Affairs and Equal Opportunities EXECUTIVE SUMMARY Ettore Recchi, Emiliana Baldoni, Francesca Francavilla, Letizia Mencarini (CIUSPO, University of Florence) June 2006

Geographical and Job Mobility in the EU EXECUTIVE SUMMARY Ettore Recchi, Emiliana Baldoni, Francesca Francavilla, Letizia Mencarini (CIUSPO, University of Florence) Introduction Geographical and occupational mobility are distinct phenomena. However, they have in common a reference to dynamism and change in society. Social organizations in which individuals stay put in their localities and keep the same employment status for life are likely to be markedly different from others in which there is some mobility on both fronts. An empirical assessment of the degrees of spatial and occupational mobility in the Member States of the EU, therefore, helps grasp with relevant indicators of socio structural change. In a diachronic perspective, information on these aspects of socio economic life is useful to monitor major directions of convergence of European societies. Geographical mobility has always been conceived as a key factor of European integration. Policies of free movement of goods, capital and people represent a quintessential concern of the European Communities from their early years in the 1950s. Freedom of movement forms the cornerstone of European citizenship and the backbone of an ever closer Union, justified on both economic and political grounds. Job mobility attracts a growing interest in the context of the end of jobs for life debate. The movement of workers between workplaces can be regarded as an important means of adjustment in the labour market, facilitating structural economic changes. In this sense, job mobility represents a critical ingredient of workforce flexibility, indicating the extent by which labour markets are able to create job opportunities and reallocate employment in the face of changing economic conditions. This report presents EU wide analyses based on three different sources: a) the Eurostat Dissemination Database (EDD), which integrates censuses and other data 2

stemming from national institutes of statistics of the Member States (data refer to the period 1987 2005); b) the EU Labour Force Survey (LFS), which is a standardized cross sectional survey carried out in all Member States (data for our analyses refer to the period 1995 2005); c) the European Community Household Panel (ECHP), a comparative longitudinal study conducted in the EU Member States between 1994 and 2001. Geographical mobility In the analysis of geographical mobility, a basic distinction is drawn between stocks and flows of intra EU immigrants. In terms of stocks, between 1987 and 2004 in EU 15 the total number of foreign residents grew from 14.4 to 21.4 millions (+48.7%); among these, EU 15 non nationals rose from about 5.2 to 6.3 millions (+21.1%). From the mid 1980s to the mid 2000s, stocks of EU 15 non nationals increased in all EU Member States especially in the United Kingdom (+443,000), Germany (+207,000) and Spain (+181,000) but Sweden, France and Italy. Over these two decades, Germany, France (for which no data are available in the mid 1990s, though) and the United Kingdom stay on top as the countries hosting the largest numbers of EU citizens living abroad. The Italians and the Portuguese keep on being the largest communities of Europeans residing in another EU Member State. However, the fastest growing communities of Europeans abroad are not formed by Southern Europeans, as it was traditionally in the 1950s 1970s, but rather by Central and Northern Europeans. Between 1987 and 2002, the number of Germans living outside their native country in the EU almost doubled (+96%); the rise of expatriate French (+59%), Belgians (+51%), Britons (+42%) and Dutch (+32%) is also remarkable. Only the Spanish and the Finnish communities abroad shrank in this period, albeit modestly. EU 25 citizens living in a EU Member State different from their own amount to 7.1 millions persons in 2004. They represent 31.8% of the foreign population of the enlarged Union. Third country nationals make up 3.4% and EU non nationals (including EU 10 citizens) 1.6% of the EU 25 resident population. 3

In the working age population the increase of EU non national residents is particularly pronounced: from 4.1 million individuals in 1995 to 6.1 in 2005 (that is, +48.7%). As this rise is stronger than the rise of the entire stock of EU non nationals, there are reasons to believe that workers mobility is outpacing population mobility in the EU in the last decade. Overall, people aged 25 to 44 form from one third to half the total of EU non nationals in EU Member States (ranging from 34% in France to 48% in Italy). The majority of intra EU immigrants are men (55%). Traditional receiving countries of intra European migration, and particularly Germany, host EU movers with a lower educational background. In this regard, the difference between Germany and the UK is striking, as in the latter country one third of EU non nationals have tertiary level credentials. These individuals are probably taking jobs in the high skilled sectors, whereas Germany keeps on offering employment opportunities to intra EU immigrants mainly in low end occupations. Yet, the education of EU non nationals has improved constantly and markedly from 1995 to 2005. If in the mid 1990s only 14.3% of intra EU movers had tertiary degree, in 2005 this is the case for almost a quarter of them. But the most significant finding is the following: while in 1995 the proportion of national residents with a tertiary level education was higher than that of EU movers, the situation has reverted in 2005. In other words, the upgrading of the educational level of intra EU immigrants has exceeded that of the general population. EU movers are now a positively selected population in terms of education. The education differentials between EU non nationals and nationals are at their peak in Denmark, Ireland, Luxembourg, Austria, Spain, Portugal, Poland, the Czech Republic and Hungary, where the share of tertiary educated EU movers is about twice larger than that of nationals. Geographical mobility brings additional human capital to these countries, although the size of the population at stake varies considerably from one country to another. Over time, intra EU immigrants are also redefining their position in the workforce. In terms of sectors of employment, EU citizens living abroad are less likely than nationals and also third country nationals to have a job in agriculture. More 4

significantly, their involvement in the industrial sector is declining at a faster pace than that of nationals. Indeed, still in 1995 the proportion of industrial workers among EU movers was well above that of nationals (55.8% vs. 50.9%); after 2000, the two are about the same. Finally, we have distinguished the broad service sector into two separate categories: a low level sector (mainly including personal service activities) and a mid high level sector (in which non manual activities are the rule). In the low level service sector, EU 15 non nationals are more frequently employed than nationals, but less than third country nationals. The growth of this sector of employment from the mid 1990s onwards is almost entirely fed by immigrants from outside the EU. In fact, EU non nationals follow in the path of nationals as long as mid high service jobs are concerned. Although they still lag behind national workers in relative terms, they are in increasingly larger numbers employed in this economic sector. On the basis of comparable EU wide sources, the oldest possible complete information on flows of geographic mobility in the EU dates back to 1997. In that year, European citizens relocating in the EU 25 area amounted to 628,868 individuals (of which a negligible part relocated in future EU 10 countries; data are not available for Ireland, Poland, Latvia and Slovakia).This means that in 1997 31.8% of the entire international immigration flows in Europe was generated by EU movers. In 2003, over 900,000 EU citizens resettle in another Member State, 388,000 of these being non nationals, the rest being returning nationals. EU non nationals amount to 15.2% of the total of international immigrants in 2003, while returning nationals form 20.4% of that same total. Inflows to the (soon to become) EU 25 amount to 1,132,603 units (figures not available for Greece, France, Ireland, Poland and Estonia). It is worth noting that 64% of EU 15 moving citizens are returning migrants, while only 6% of EU 10 movers belong to this same category. The only two EU 25 Member States where the proportion of EU non nationals prevails among immigrants are Luxembourg and Cyprus (respectively, 68% e 53%), but they represent a sizeable number of newcomers also in Belgium (38.2%), Malta (37.7%), Ireland (27.1%) and Portugal (26.8%), while they are a definitely small group in Slovakia (1.9%), Slovenia (3.3%), Czech Republic (6.2%), Italy (7.5%), Lithuania 5

(8.7%), and Finland (9.8%). The countries with the largest proportions of returning nationals are Finland (44.9%), Slovakia (42.4%), Denmark (42%) and Ireland (34.7%). In sharp contrast, there are relatively small contingents of returning nationals in the Czech Republic (2.3%), Spain (8.3%) and Luxembourg (9.2%). Germany, United Kingdom and Spain attract the largest numbers of intra EU movers. In Germany 23.9% of intra EU immigrants come from Italy, 13.4% from Greece and 11.2% from France. In the UK, more than half the contingent of incoming EU citizens are French (28.4%) and Germans (28.2%). In Spain 39.7% come from the UK, 16% from Italy and 14.6% from Germany. Noticeably, in Austria, 61.9% of inflows is made up of Germans and in Luxembourg 40.4% consists of Portuguese. Britons (67,100 persons), Germans (57,534 persons), French (56,033 persons) and Italians (53,382 persons) form the largest nationality groups resettling abroad in the EU in 2003. Job mobility The report distinguishes three different aspects of labour mobility: employment (i.e., changes of professional status), occupational (i.e., changes of occupational groups), and job (i.e., changes of employers) mobility in a conventional 12 months time frame. Moreover, it examines data on job tenure (i.e., the average duration of jobs, expressed in months). Over time, employment mobility increased considerably from 1995 to 2000, to drop at its lowest level in 2005. In 2000, switches between different professional statuses were particularly widespread in Southern Europe, and especially among women. In that year, more than 10% of Spanish employed women changed professional status. Possibly by the turn of the century a sensible flexibilization of work relations affected the labour market of these countries, entailing movements from full time employee status to atypical jobs, formally classified as self employment. Employment mobility seems to be closely inter related with changes in industrial relations, and particularly with the expansion of short term work contracts in some EU labour markets. The type of contract (permanent or temporary) signed by workers who have taken a different professional status in the last 12 months is a good 6

indicator of two opposite directions of change: a securitization (from temporary to permanent) or a flexibilization (from permanent to temporary) of employment. A clear trend in both the EU 15 and the EU 10 (although fewer data are available for the latter area) is found: employment mobility is increasingly associated with temporary work contracts. Overall, in the EU the probabilities of holding a temporary job were similar for workers who changed professional status and for those who did not in 1995. From 2000 onwards, however, the earlier group has become much more at risk of entering a non permanent work commitment. This is very strongly the case in Ireland, where in 1995 only 7.8% of the workers who changed professional status were hired on a temporary basis, as opposed to 63.1% in 2005. The only major exception to this trend is the UK, that is the country usually described as the champion of flexibility, where workers moving to a different professional status in more recent years are less likely than workers in 1995 to be employed on a temporary basis. This evidence can be interpreted as indicating a rising securitization of labour relations in the UK. Occupational mobility is a context specific phenomenon, varying across EU labour markets noticeably. Between 1994 and 2001 (on the basis of ECHP data), in the UK, Belgium and the Netherlands more than half the working population moved at least once from one ISCO 1 digit occupational group to another. Great Britain is the homeland of occupational mobility. In fact, nowhere is occupational mobility as low as in France: only 17.9% of French workers experienced some occupational mobility in the 1994 2001 period. Occupational mobility rates are also below the EU average in Denmark, Greece, Finland and Luxembourg. In all countries, women are less likely to change occupational group than men. Occupational mobility rates rose sharply in the 1990s, tripling between 1994 and 1998, to stabilize early in the new century. Spectacular increases took place in Belgium, Portugal, Spain, the Netherlands and Ireland. In Italy such a growth was experienced between 1998 and 2001. From 1995 to 2005, job mobility rates fluctuated in the 15 18% range in the EU. A similar pattern is found in all countries: a modest rise between 1995 and 2000, and a marked drop from 2000 and 2005. For the latter period, such a drop is also found in 7

EU 10 (with the exception of Slovenia). Persistently Spain and Denmark show the highest rates (job mobility affects 20% of the workforce), while Greece and Luxembourg have the lowest (below 10% in 2005). Everywhere in the EU 15 but in Sweden in 1995 women have a higher job mobility rate than men. In fact, the situation in EU 10 is more mixed, since in Poland and the Baltic states men s mobility is higher than women s. It is worth noting that gender differences in job mobility do not replicate gender differences in occupational mobility. While women stick to occupational groups particularly, this does not entail that they are trapped in their workplaces. In fact, their higher exposure to temporary contracts makes them more likely candidates to job mobility. Older cohorts of workers are less likely to get a new job in all EU labour markets, with few exceptions. The most striking is Slovakia, where job mobility picks up in the oldest age cohort (55 64 years old), while it is below the continental average in the two youngest cohorts. The British case is also noticeable, since job mobility becomes markedly higher than the EU average only for workers over 35 years old. Generally speaking, however, countries with higher mobility rates tend to have proportionately higher job mobility rates in all age groups. Job mobility rates are 5 to 7 times higher among employees with temporary contracts than among their counterparts with permanent contracts. Nonetheless, between 1995 and 2005 a smaller proportion of temporary jobs entails a change of employer in the last year: 67.5% in 1995, 56.9% in 2000 and 54.0% in 2005. A similar and even more pronounced trend was experienced in the EU 10 between 2000 and 2005: the job mobility rate among workers with temporary contracts dropped from 67.7% to 50.0%. Temporary contracts are becoming less short term in the EU in the last decade. On the other hand, a low job mobility rate among workers with permanent employments indicates some rigidity of primary labour markets. At one extreme there are the Netherlands, Portugal, Greece and Poland, where less than 6% of permanent workers took a new job in 2005; at the other Denmark, the UK, Estonia and Latvia where 15 18% of their counterparts changed employers in the last year. Such differences, at comparable levels of protection of the workforce, have 8

significant implications in terms of openness, opportunities, and adaptability of labour markets. Finally, findings about job tenure are consistent with those on job mobility. However, although job tenure depends strongly on age, seniority does not tell the full story. Sizeable gender and country differences are also found. In general, women tend to have lower job tenure. Childbearing plays an important role here. As a matter of fact, women s and men s tenures are the same for workers in their twenties. The gender gap emerges after the age of thirty, and grows until the late forties, when child rearing takes its toll on women s life, forcing them out of the workforce or into short term work arrangements. In fact, some realignment between men and women occurs when individuals enter their fifties: in Belgium, France, Italy and Portugal women catch up men at that stage of their working life (in the UK they even overcome men s tenure). Overall, the largest gender disparity in job tenure is found in Ireland. Country differences are remarkable as well. Workers in the UK have by far the shortest average job tenure. In contrast, in Belgium, France, Italy and Austria more than two thirds of the workforce has stayed in the same workplace for more than four years. Conclusion: a cautionary note In addition to its substantial findings, our study highlighted the growing homogenization and accessibility of EU wide statistical sources on the issues at stake, but also the persistence of significant limitations some of which are arguably very hard to overcome. In particular, we would express a caveat on the capacity of official statistics to grapple with the true level of geographical mobility within Europe, since these statistics tend to record only individuals who change their place of residence for at least 12 months. We suspect, in fact, that EU citizens are more mobile than they are described in censuses and other public records. Paradoxically, it is the very legislation on free movement that engenders elusive migrations. EU citizens can relocate for temporary or intermittent stays without any stringent necessity to register abroad. Unfortunately, such circulatory or tourist migrations 9

are hard to track down with existing survey tools. Apparently, the LFS is of limited help in this regard, as it under estimates recent immigrants systematically. We would also mention some inefficiencies in the current format of the LFS namely, the lack of information on the occupation of respondents at earlier times (but for the unemployed and the inactive population). This information would in fact be helpful to map out occupational mobility in greater details. ECHP is definitely more useful in this regard, but it is becoming rather out dated at least if it is employed for policy oriented analyses. Hopefully more recent information will be available with the release of the EU SILC dataset the panel successor of ECHP. However, even this precious, additional source is likely to be insufficient to get in depth information on the issues at stake. Given the relative paucity of mobile populations, as well as their strategic interest as spearheads of social and economic change, ad hoc surveys are strongly recommended as major future research efforts on a EU wide scale. 10