In observance of the International Migrants Day, Dec 18
The world is worried about migration and forced displacement. In October, the Development Committee Communiqué highlighted the need for action to address challenges – climate change, migration and forced displacement, global health, as well as fragility, conflict and violence (FCV) – that “threaten” all countries. Migration however, is not a threat. If well managed, migration can be beneficial for countries of origin, destination and migrants themselves.
A better integration of migrants into the labor market is one of the challenges that need to be tackled to reap these gains of migration. Migrants lag behind natives on the labor markets in many (if not all) countries in Europe and Central Asia (ECA), as shown in the latest regional Economic Update of the World Bank. The unemployment rate for people born outside the European Union was twice as high in 2016 compared to the native-born population. Migrants also lag behind natives in terms of wages. Migrants with high education are more likely to be over-qualified for their jobs, and those with lower educated are more likely to be living in poverty.
Refugees face even greater challenges. Evidence from the 2008 EU Labour Force Survey shows that refugees need 6 years to have the same labor force participation rates of migrants who moved for family reasons and more than 15 years to close the gap with those who came for work or education.
The Migrant Integration Policy Index (MIPEX) shows that labor market integration policies were only halfway favorable in the EU in 2014 in terms of providing immigrants with equal rights and opportunities to access jobs and improve their skills. Policies are more developed in Western Europe than in other parts of the EU.
Having a job is the single most important determinant of migrants’ net fiscal contribution in Europe. Raising immigrants’ employment rates to that of the native-born would entail substantial fiscal gains in many European countries, in particular in Belgium, France and Sweden, which would see a budget impact of more than 0.5% of GDP, according to OECD. Measures to better integrate migrants into the labor market should thus be seen as an investment rather than a cost. This is what happened with Polish migrants to Ireland (220,000 of them arrived in Ireland in the period 2004-07). They integrated well by slipping easily into a flexible and adaptable Irish labor market, which offered them opportunities they might not have in Poland – and for the benefit of both countries and the EU.
Labor market integration is also key for social integration. It would also increase social cohesion through helping change the way migrants are perceived by natives: They do not come for social benefits, but to find work and thus contribute to their host country.
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