Labour market performance and migration flows - European ...

Chapter IFinal ReportFrom a different perspective, centred on demographic prospects and skills profiles, a recentreport of the World Bank (2009, pp. 57-61) links increasing European demand for migrant labourover the next two decades, the education and labour force participation of women in the Middle Eastand North Africa. It argues that MENA countries are currently not well placed to meet increaseddemand for labour in the European Union. Whether assuming zero migration or a persistence ofcurrent migration rates the demand for replacement labour in the European countries is projected topeak in the 2020s. But it will predominantly concern medium-skilled workers who have completed asecondary education. Currently, however, workers from emigration countries in the MENA Regionprovide a poor match in relation to Europe’s needs, as the 15-39 labour force will mainly expandamong those who have completed their primary education. If education rates and labour forceparticipation rates stay unchanged, the skill mismatch will become significant. This mismatch willbe most apparent in the 2020s, when Europe’s potential demand for secondary-educated migrants ofroughly 10 million will coexist with a projected potential supply of labour migrant with secondaryeducation of only 0.5 million in MENA. If MENA’s emigration countries make efforts to increaselabour force participation and education rates significantly, the scope for arbitrage would be muchhigher. Assuming, as in the scenarios developed for the report, that labour force participation ratesand education rates can converge over time to the levels of southern European countries, the matchbetween MENA and the European Union would improve considerably (as the Figure 4.1.1 clearlyshows). Between 2005 and 2050, the MENA emigration countries would produce a net increase of20 million people with secondary education and 10 million people with tertiary education. Thisscenario’s outcome will depend partly on the success of MENA countries in improving participationrates for women. In Section 6.3 we take a different approach, based on Venturini, Fakhoury andJouant 2009, to conclude that a matching opportunity does indeed exist.Figure 4.1.1. Skill Mismatch With and Without Policy Reform in MENA CountriesSource: World Bank (2009)What is clear is that the sheer size of employment creation in the AMCs implies that migrationcannot provide a solution to the AMC unemployment problem. The aforementioned World Bankreport (World Bank 2009a) is very clear in this respect: “Migration is not a panacea for sluggish jobcreation in MENA countries or for an aging European population, but it could form part of the policyapproach to address these challenges”. However, many of the policy actions and institutional reformsrequired to become more competitive in the global labour supply market – specially enhanced57