WP5 – Labour market / public service impacts

While there is substantial research on the impact of migration on the labour market, there is less evidence on the broader consequences of those labour market impacts on well-being and public services such as health care. Using data from five northern and southern European countries, this work package will investigate the role of spillover effects from the labour market to the broader economy, well-being, and public services. We put particular emphasis on differences in impacts between EU citizens and third country nationals (TCNs).

The analysis is based on the observation that if mobility has a negative impact on local workers’ wages or increases their unemployment there will be implications for government revenues and native use of public benefits. In this case, natives will pay fewer taxes and make more use of public benefits. However, previous evidence suggests that inflows of low-skilled migrants often push local workers into more complex occupations which require more cultural knowledge and are less manual-intensive (Ortega and Verdugo, 2011; Peri and Sparber, 2009).

One consequence of this impact is an increase in the share of natives working in more complex occupations with higher wages and with better working conditions. These dynamics have multiple implications for the host economy. If natives have higher incomes they will contribute more to government revenues and make less use of social benefits. Likewise, better working conditions can lead to better health outcomes and less use of health facilities (Mazzonna and Giuntella, 2015).

This work package will examine these issues, asking:

What is the impact of EU and non-EU mobility on the employment levels/rates of native workers, and on the wages of native workers?
What is the impact of these flows on the occupational distribution of native workers? Do natives move into more complex occupations in response to EU and non-EU migration?
What are the implications of these changes in labour market dynamics? Are natives less/more likely to claim social benefits? Do they have better/worse long-term health outcomes that decrease/increase their use of health services? What are the implications for their tax contributions?
To what extent and in which ways do the analysed impacts differ between immigration from within the EU and from outside the EU?