Golden Growth part2

Page 81

GOLDEN GROWTH

for employment. Recent statistics show an increase in mobility. In 2008, about 2.3 percent of EU citizens (11.3 million people) resided in a member state other than their citizen state, according to the European Commission.24 That number has grown more than 40 percent since 2001. A lack of movement is often blamed for high unemployment rates in areas that lag and for labor shortages that drive up wages in places that lead. This negative correlation between mobility and unemployment is apparent in data from selected OECD countries for 1980 to 1995 (Hassler and others 2005; figure 6.30). Labor markets can respond differently to shocks, often resulting in differences in the impact on jobs across areas. Adjustment to regional shocks in Europe has been achieved more through unemployment rates and changes in labor force participation (people stop looking for work if a region goes into economic decay) and less through mobility of labor.25 By contrast, in the United States, labor mobility leads to greater agility in responding to differences in wages and job opportunities across states, reducing disparities in unemployment rates and real wages.

Table 6.3: Not a single market for new members (EU15 restrictions on workers from newer member states) Entry of workers from Bulgaria and Romaniaa

Entry of EU8 workers May 2004 to April 2006

May 2006 to April 2009

2007–08

Austria

Restricted

Restricted

Restricted

Belgium

Restricted

Restricted

Restricted

Denmark

Restricted

Restricted

Restricted

Finland

Restricted

Open

Open

France

Restricted

Restrictedb

Restrictedb

Germany

Restricted

Restricted

Restricted

Greece

Restricted

Open

Restricted

Ireland

Open

Open

Restricted

Italy

Restricted

Openc

Restrictedd

Luxembourg

Restricted

Restricted

Restricted

Netherlands

Restricted

Opene

Restricted

Portugal

Restricted

Open

Restricted

Spain

Restricted

Open

Restricted

Sweden

Open

Open

Open

United Kingdom

Open

Open

Restricted

a. Bulgarian and Romanian workers also face restrictions in Hungary and Malta. b. Except for health care, transport, construction, hotels, and catering. c. Since July 2006. d. Procedures for obtaining work permits are simplified in certain sectors. e. Since May 2007. Between May 2006 and April 2007, the Dutch labor market was open to EU8 workers in a large number of sectors. Source: OECD 2007.

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