people on the move: migration and mobility in the european ... · people on the move: migration and...

People on the move: migration and mobility in the European

UnionUuriintuya Batsaikhan, Zsolt Darvas and Inês Gonçalves

Raposo

Bruegel – Institute for International Affairs workshop

Europe’s immigration and integration challenges: Financial and labour market dimensions

2 February 2018, Rome

Dramatic changes in EU demographics

2Note: Net immigration (non-adjusted) indicates the data as included in the population

statistics. Net immigration (asylum-adjusted) also considers pending asylum seekers.

• Immigration: more

important source of

population change

than natural

change since 1990s

• Scale of

immigration in

2015-16: not

unprecedented

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

Natural change

Net immigration (non-adjusted)

Net immigration (asylum-adjusted)

Components of population change in the EU28,

1960-2016 (percent of population)

Purpose of our report

•Assess the migration challenge that Europe faces, by analysing:

1. Public perception

2. The scale of immigration

3. The economic impact of immigration

4. Integration of migrants• With a special focus on financial integration

5. Policy implications

3

Public perception

4

Immigration and terrorism top the list of public concerns

5

Source: Eurobarometer. Question QA5 “What do you think are the two most important

issues facing the EU at the moment?” Maximum of two answers possible.

Most important issues facing the European

Union, share of respondents

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% ImmigrationTerrorismEconomic situationMember States' public financesUnemployment

26

29

39

39

40

48

41

18

30

34

21

36

28

24

18

23

26

8

5

29

13

4

12

8

0% 20% 40% 60% 80% 100%

Oceania

Asia

Latin America and Caribbean

North America

Africa

European Union

Decreased Present level Increased Don't know/refused to answer

EU: more negative views on immigration than elsewhere in the world

6

Source: Gallup and IOM (2015) How the world views migration, Figure 1.2 and Table 5.1.

Note: The question "In your view, should immigration in this country be kept at present

level, increased or decreased?". Groups are weighted by population size.

Attitudes towards immigration globally, share

of respondents, 2015

Yet support for intra-EU immigration is on the rise

7

Support for immigration from inside the EU, percent or

responses, EU average

Source: Eurobarometer surveys, The question asked: “Please tell me whether each of the following statements

evokes a positive or negative feeling for you – Immigration of people from other EU Member States

0%

10%

20%

30%

40%

50%

Very positive Fairlypositive

Fairlynegative

Verynegative

Do not know

May-15 Nov-15 May-16 Nov-16 May-17 Nov-17

Lower support for immigration from outside than from inside the EU

8

Source:

Eurobarometer,

November

2017

Support for immigration from inside the EU vs. from

outside the EU, percent of respondents

No negative relationship between the share of immigrants and the support for immigration across EU countries

9

Intra-EU immigration Extra-EU immigration

Immigration support vs the share of immigrants

in resident population, 2016

Perceptions vs reality: Citizens overestimate the actual number of immigrants

10

Sources: IPSOS. The question asked: “What percentage of the [Country] population do

you think are immigrants to this country (i.e. not born in [Country])?”

0

5

10

15

20

25

30

35

Perceived

Actual: foreign population by nationality

Actual: foreign-born population

Perceived and actual stock of immigrants, 2014

(percent of population)

Perceptions on handling the refugee crisis & common asylum policy & border control

• EU citizens generally disapprove of the way the refugee crisis was handled in Europe.

• Nevertheless, a large majority of Europeans is in favour of:

• a common European asylum policy and

• increased EU efforts to fight illegal immigration.

11

Mapping migration in the European Union

12

Intra-EU mobility has not reached high levels

13

Population of Italy by citizenship* (end-2015) :

Central and Eastern European citizens 2.24

Central and Eastern European posted workers 0.02

Other Southern European citizens 0.06

Other Southern European posted workers 0.01

North-west country citizens 0.20

North-west country posted workers 0.01

Non-EU citizens 5.88

Home country citizens 91.59

Total 100.00* Note: the table shows foreign citizens; some immigrants obtained Italian citizenship, see slide 10.

Intra-EU mobility has not reached high levels

14

Population of 11 north-west EU countries* by citizenship (end-2015):

Central and Eastern European citizens 1.88

Central and Eastern European posted workers 0.15

Southern European citizens 1.18

Southern European posted workers 0.02

Other north-west country citizens 1.13

Other north-west country posted workers 0.04

Non-EU citizens 4.92

Home country citizens 90.68

Total 100.00* 11 north-west: first 15 EU members without Greece, Italy, Portugal and Spain.

Key concerns are brain drain and labour shortages

15

Labour shortages as a factor impeding business

Industry

0

5

10

15

20

25

30

35

19

96-Q

1

19

98-Q

1

20

00-Q

1

20

02-Q

1

20

04-Q

1

20

06-Q

1

20

08-Q

1

20

10-Q

1

20

12-Q

1

20

14-Q

1

20

16-Q

1

CEE-10 NW-11 SE-4

Services

0

5

10

15

20

25

30

35

200

3-Q

3

200

4-Q

3

200

5-Q

3

20

06

-Q3

200

7-Q

3

200

8-Q

3

200

9-Q

3

201

0-Q

3

201

1-Q

3

201

2-Q

3

201

3-Q

3

201

4-Q

3

201

5-Q

3

201

6-Q

3

201

7-Q

3

CEE-10 NW-11 SE-4

Source: European Commission, European Business and Consumer Surveys. Question: ‘Factors

limiting the business: labour force’. Note: CEE-10: 10 central and eastern EU countries; NW-11: 11

north-west EU countries; SE-4: 4 southern EU countries

Immigration from outside the EU:changing source countries and reasons

16

EU residence permits by main sending countries and

reason for issuance, 2016, thousands

3-11 months

0

100

200

300

400

500

Employment Other Education Family

-

50

100

150

200

250

300

Employment Other Education Family

One year or longer

Source: Eurostat ‘First permits by reason, length of validity and citizenship’ dataset, code: migr_resfirst.

First time asylum applications in the EU by place of application, Jan 2008 - Oct 2017

17

Source: Eurostat.

• Average 2008-11:

265 thousands/year

• 2015: 1.26 million

• 2016: 1.21 million

• 2017 (expected):

640 thousands 0

20

40

60

80

100

120

140

160

180

200

8M

01

200

9M

01

201

0M

01

201

1M

01

20

12

M0

1

201

3M

01

201

4M

01

201

5M

01

201

6M

01

201

7M

01

Th

ou

san

ds

Germany Sweden Austria

Hungary Italy Greece

France United Kingdom Rest of the EU

Huge differences in asylum decisionsLikely reason: different implementation of EU asylum rules

18

Source: Eurostat.

0%

20%

40%

60%

80%

100%

EU

28

Austr

ia

Belg

ium

Bulg

aria

Cro

atia

Cypru

s

Czech R

ep

.

Den

mark

Esto

nia

Fin

land

Fra

nce

Germ

any

Gre

ece

Hun

gary

Ire

lan

d

2015 2016 2017

0%

20%

40%

60%

80%

100%

Italy

Latv

ia

Lithuan

ia

Lu

xe

mb

ou

rg

Malta

Neth

erland

s

Pola

nd

Port

ugal

Rom

ania

Slo

va

kia

Slo

ve

nia

Sp

ain

Sw

ed

en

UK

2015 2016 2017

Positive first instance decisions on asylum applications,

% of applications, 2015-17

Uneven distribution of 1) first time applications, 2) accepted asylum, 3) GDP

19

0%

10%

20%

30%

40%

50%

60%

70%

Hung

ary

Gre

ece

Denm

ark

Austr

ia

Belg

ium

Pola

nd

Sw

ede

n

Ne

the

rlands

Spa

in

Italy

Fra

nce

UK

Ge

rma

ny

oth

er

EU

2017

First time applications Positive decision GDP

Economic Impact of Immigration

20

Labour market impact

• Lack of conclusive evidence that immigrants take jobs from and depress wages for natives. Impact depends on migrant characteristics and the host country’s economic and institutional factors.

• There are studies finding evidence of negative, neutral and positive impact of immigration on native wages

• Crucial aspects: recognition of qualifications, language skills, access to networks, etc.

21

Fiscal impact

• The fiscal impact of migrants is generally found to be small and dependent of migrant characteristics

• Migrants make a greater fiscal contribution the younger and better integrated into the labour market they are, while family and elderly migrants as well as refugees tend to be a fiscal burden

• Initial fiscal impact might change in time, e.g. when labour migrant retire or refugees start to work

22

Impact on output

• Immigration and related spending boosts output; key issue is income per capita and productivity

• Several authors: positive effect on and productivity due to skills and innovation (when high-skilled immigration) but also allow native to take up higher skilled jobs (when low-skilled immigration)

• The economic impact on receiving countries is largely influenced by the composition of migrant flows

23

The case of refugees

• Speed and ease of access to labour markets is crucial

• The IMF estimates the fiscal cost of asylum seekers in 2014-2016 to be around 0.19% of total EU GDP

• OECD: National fiscal costs 0.5% of GDP in Germany annually from 2016-2017, 0.3% in Austria and 0.9% in Sweden for 2016

• Impact of the labour markets: cumulative impact of asylum seekers inflow by end-2016 accounts for 0.4% of EEA labour force

• Role of national institutions in integrating migrants

24

Integration of immigrants

25

Sweden & UK: good labour market integration record; Belgium & Italy: bad

Country Native-born

Second

generation of

migrants

First

generation of

migrants

Sweden 83% 78% 76%

United

Kingdom79% 76% 75%

Belgium 68% 59% 65%

Italy 63% 48% 70%26

Labour force participation by migrant status,

selected countries, 2014 - total population

Labour market integration: Much better outcomes for tertiary educated people

Country Native-born

Second

generation of

migrants

First

generation of

migrants

Sweden 93% 90% 87%

United

Kingdom88% 89% 83%

Belgium 87% 83% 79%

Italy 82% 72% 78%27

Labour force participation by migrant status, selected

countries, 2014 - tertiary educated population

Data for Germany is not available.

Limited increased in emplyment a few years after arrival

28

Employment rates of third country immigrants in

the EU by year of arrival in the host country

30

35

40

45

50

55

60

2006 2007 2008 2009 2010 2011 2012 2013 2014

% o

f p

op

ula

tio

n 1

5-6

4

2012-2013 2010-2011 2008-2009

2006-2007 2004-2005

More low-qualified among non-EU born

29

0

5

10

15

20

25

30

35

40

45

50

Less thanprimary, primary

and lowersecondaryeducation

Upper secondaryand post-

secondary non-tertiary education

Tertiary education

Native-born

Other EU-born

Non-EU-born

Population (15-64) by educational attainment level

and country of birth, 2016

Migrants feel to be over-qualified relative to natives

30

• … especially in Italy,

Greece, Austria,

Germany, Belgium,

Malta

0

10

20

30

40

50

60

70

ES

SK

CY

PO

PT

UK

MT

FR

CZ

SE FI

LT IT SI

EE

GR

LV

AT

HR

LU

BE

HU

DE

Natives First and second generation of migrants

Self-declared over-qualified employees

as a share of total employees, 2014,

Tertiary educated workers

School drop out rates are much higher for migrants than for natives, with the exception of the UK

31

Share of early leavers from education

or training aged 18-24

05

10152025303540

Austr

ia

Belg

ium

Cypru

s

Czech R

ep

ublic

Fra

nce

Germ

any

Gre

ece

Ire

lan

d

Ita

ly

Luxem

bo

urg

Ne

the

rla

nd

s

Slo

ve

nia

Spain

Sw

ed

en

Un

ited

Kin

gd

om

Reporting country Other EU countries Non-EU countries

Student performance by family origin, 2015

32

• Even 2nd

generation

migrants tend to

underperform

relative to natives,

with the exception

of the UK, Portugal,

Hungary, Canada

• Especially poor

results: Belgium,

Austria, Iceland,

Slovakia

• Denmark and

France not good

either

350

400

450

500

550

Fin

lan

dC

an

ad

aG

erm

any

Ire

lan

dE

sto

nia

No

rwa

yN

ew

Ze

ala

nd

Sw

ed

en

Be

lgiu

mS

love

nia

Ne

the

rla

nd

sF

ran

ce

Sw

itze

rla

nd

De

nm

ark

US

UK

Austr

alia

Lu

xe

mb

ou

rgS

pain

Po

rtu

ga

lO

EC

D a

ve

rag

eA

ustr

iaIta

lyC

zech

R.

La

tvia

Ice

lan

dIs

rae

lG

ree

ce

Hu

ng

ary

Ch

ileS

lova

kia

Native

Second-Generation with an immigrant background

First-Generation students with an immigrant background

Reading literacy

Financial Inclusion of Refugees

33

From arrival to integration, refugees have very different financial needs

• Arrival: survival cash for immediate food and housing needs;

• Initial displacement: savings, remittances and paying for immediate service needs such as school fees or furniture;

• Stable/protracted displacement: broader options for savings beyond a bank deposit, micro-consumer credit, small business loans, health insurance, etc.;

• Permanent settlement: financial services needs start to resemble those of the host population, such as access to credit, pension schemes, business loans, remittance and payment accounts, etc.

34

Contradictory forces at work in relation to financial regulation and financial inclusion

• The continuing tightening of financial regulation and oversight of the financial sector (which is important in the fight against money-laundering and terrorist financing) works against the economic integration of refugees.

• Know your customer regulations (KYC): customer due diligence process that financial institutions have to do before they provide financial services

35

Bruegel survey on banks’ attitudes towards financial integration of refugees

• 14 responses from 9 countries: Austria, Cyprus, Estonia, Germany, Greece, Italy, Luxembourg, Spain and Sweden.

1. Regulatory environment

2. Refugees as clients

3. New initiatives to foster financial inclusion

36

Has your national regulatory/supervisory authority issued guidelines regarding the offering of financial services to refugees in recent years?

37

Country Guideline issued

Austria Yes

Cyprus Yes

Estonia No

Germany Yes

Greece Yes/No

Italy No

Luxembourg Yes

Spain No

Sweden No

Note: the two Greek banks surveyed by us gave opposite answers.

• Only about half

of the countries

issued

guidelines to

help banks

accommodate

refugees

Restrictiveness of the ‘know your customer’ (KYC) regulations (percent of responses)

38

% responses

In your opinion, or that of your institution, do the ‘know your customer’ (KYC) regulations of your

country strike the right balance between the need for offering financial services to refugees and the

anti-money-laundering (AML) / counter-terrorist financing (CFT) goals?

0%

10%

20%

30%

40%

50%

60%

All banks

Banks withrefugee clients

Banks withoutrefugee clients

• No bank assess

rules too loose

• Banks with

refugee clients

assess rules

more restrictive

than banks

without refugee

clients

Refugees as potential clients for financial institutions (percent of responses)

39

% responses

On a scale from 1 to 5, how interesting is the offering of financial services to refugees as a business

prospect for your institution?

• Moderate

business

interest in

offering

financial

services to

refugees

• Somewhat

larger by banks

that actually

have refugee

clients

0%

10%

20%

30%

40%

50%All banks

Banks withrefugeeclients

Bankswithoutrefugeeclients

Does your institution have specific financial products for refugees?

40

% responses

0%

25%

50%

75%

100%

Yes No

All banks



Did your institution make active steps to approach refugee clients (for instance, visiting refugee settlement centres, printing flyers and brochures)?

41

% responses

0%

25%

50%

75%

100%

Yes No

All banks



New initiatives to foster financial inclusion 1

42

• Public sector initiatives:

• European ID issued to each refugee

• Set-up of a national central registry of refugees

• Create a pan-European registry linked to national registries


43

• Private sector initiatives:

• Offer micro-credit and other specific products that refugees need to be able to get started, to support self-employed persons, to contribute job creation and to facilitate social integration

• Employ refugees short-term, thereby helping them to obtain their first work experience in the host country. Financial institutions could take the lead.

• Access to communications (mobile phone and internet access)

• Foster the private sector’s commitment to prevent the risk of exploitation at work


44

• Public-private partnerships:

• Hold consultations between banks and regulators on how to tackle the challenges faced by refugees and foster their financial inclusion.

• Common regulation on how to address refugee clients

• Provide trainings by private/public schools or professional training organisations, including language schools and financial literacy education

• Promote social inclusion via working activities, vocational training and cultural exchange by public-private partnerships, with the help of social cooperatives, social enterprises and associations

Policy recommendations

45

Policy recommendations, 1-3

1. Address anti-immigrant attitudes: public understanding of immigration is often far from reality, making it important to disseminate accurate information about various aspects of immigration

2. Protect the EU’s borders and fight illegal immigration: while various measures have been introduced, 85-90 percent of the EU population would like to see additional measures

3. Continue to build partnerships with neighbourhood countries, which can help to contain refugee and immigration inflows into the EU, facilitate the successful and safe return of ineligible migrants and provide information about eligible migrants

46


4. Provide additional funding for border protection, neighbourhood partnerships and immigrant integration: only a small percent of the EU budget is spent on these areas

5. Ensure the consistent implementation of the EU’s asylum rules: clear guidelines are needed for the evaluation of asylum applications and their consistent implementation

6. Address the very uneven distribution of refugees among EU countries: relocation of refugees from, and financial support to, heavily impacted countries is essential. Countries that resist accepting refugees for political and ideological reasons should make large enough financial contributions instead of being forced to accept refugees

47


7. European ID to each refugee & a pan-European registry of refugees, linked to national central registries: would greatly facilitate the identification, integration and monitoring of refugees

8. Learn from the best integration practices: only a few European countries can be regarded as successful in terms of integration of immigrants. Cooperation with the private sector and social partners is important

9. Combat educational and spatial segregation: early childhood education, language and professional training for recently arrived immigrants, and better access to higher education for young and second-generation migrants, are essential for their integration and to limit spatial segregation

48


10.Ensure the EU strategy for integration is well articulated with national governments and other institutions: the EU’s 2016 action plan on the integration of third country nationals includes several useful initiatives;

11.Review financial regulation to promote the financial inclusion of refugees: strike a balance between the fight against money-laundering/financing of terrorism and the economic integration of refugees. At the minimum, supervisory authorities should issue guidelines.

12.Address labour shortages in EU member states by fostering labour force participation, increasing the pool of labour for the private sector through reduced public-sector employment, education and specific training programmes and overhauling the tax/social security contribution system.

49

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