Labour market performance and migration flows - European ...

Chapter IFinal Reportfor EU employment policy-making: as shown in one of the Thematic Background Papers, so far thelatter has certainly taken labour immigrants in EU labour markets into consideration, but has barelytouched on the labour markets in the countries of origin, and the impact that EU policies and labourmigration to the EU could have on them. But, of course, the Study is also relevant for the design andimplementation of economic co-operation in the framework of the Euro-Mediterranean Partnershipand the European Neighbourhood Policy. Indeed, in the last two years, the first Euro-MediterraneanMinisterial Meetings on Migration and Employment have been held (in Algarve in November 2007and in Marrakech in November 2008), with a view to substantiating co-operation between the EU andits Mediterranean Partner Countries in these fields. Finally, the performance of labour markets inAMCs and the implications for migration is a question of relevance too in the framework of the Euro-Mediterranean economic dialogue at a multilateral level taking place in the annual Euro-Mediterranean Meeting of Ministers of Economy and Finance, since labour market performance isdirectly related to the macroeconomic policies discussed in this framework. Coherence between allthese policies and fields of cooperation is in itself a major issue.In any case, what is clear is that labour market mismatches, both in quantitative (unemployment,low participation rate) and qualitative terms (qualifications, skills) are the major economic and socialchallenge that AMCs will face in the coming ten to fifteen years, and the EU cannot ignore thesedevelopments in its close neighbourhood. The current global economic crisis has already begun to hitAMCs (see Section 2.7), though with a lag in relation to Europe, and it may make the situation evenworse than the one described in the National Background Papers; indeed, as we commissioned,discussed and reviewed the papers with the group of Study experts, evidence that the situation wasalready deteriorating emerged again and again. This makes policy action even more urgent, and thepresent Study even more timely, as pointed out by the Egyptian Minister for Manpower andMigration, Mrs. Eisha Abdel Hady, in the opening session of the Final Conference of the Study.The Study is organized as follows. In the first chapter we undertake a brief analysis of demographicdynamics and the prospects for and the nature of employment in AMCs. This culminates with anestimation of job creation needs in the coming 10 years in order to absorb the increase in the workingage population: 15 million new jobs will be needed over this period, 2.4 more if the extremely lowlabour participation rate of women (at around 20% of working age women now) increases by 5percentage points.The second chapter is devoted to an analysis of the performance of labour markets in AMCs interms of wages and unemployment. We review the legal regulation of labour market as one of thedeterminants of this performance, as well as the role of the informal economy (which absorbs closeto half of total non-agricultural employment in the region) and other major challenges such aswomen and youth exclusion from the labour markets. The composition of unemployment isanalysed in detail, as well as the trend of average wages: in most AMCs, the gap with EU wagelevels has increased over the last few years.In the third chapter we try to establish a link between this performance and the nationalemployment policies implemented in each country, with particular attention to Active LabourMarket Policies and recent changes in labour market legislation or employment policies. Weconclude that the scope for improvement in national employment policies in AMCs is very wide.This chapter ends with some general thoughts on policy options that might reduce the dauntinglabour markets mismatches in the region.In Chapter 4 we address the issue of outward labour migration, its magnitude, characteristics and rolein the economic system of AMCs. Chapter 5 then focuses on the impact of outward labour migration onAMC labour markets, one of the main focuses of this Study. In particular, we address the question ofwhether or not the migration of graduate workers leads to a “brain drain” of qualified human capital in27