Labour Mobility - an Adjustment Mechanism in Euroland?

Posted: 15 May 2003

See all articles by Patrick A. Puhani

Patrick A. Puhani

Leibniz Universität Hannover; University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research; IZA Institute of Labor Economics; Université Paris II - Panthéon-Assas

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Abstract

The purpose of this paper is to evaluate whether labour mobility is likely to act as a sufficient adjustment mechanism in the face of asymmetric shocks in Euroland. To this end, we estimate the elasticity of migration with respect to changes in unemployment and income on the basis of regional panel data provided by Eurostat, the statistical office of the European Union. Regression results are provided for Western Germany, France, and Italy. It is shown that labour mobility is highest in Germany, followed by France, and Italy. However, even in Germany, the accommodation of a shock to unemployment by migration takes several years. We conclude that labour mobility is extremely unlikely to act as a sufficient adjustment mechanism to asymmetric shocks in Euroland.

Keywords: Euro, European Monetary Union, Labour mobility

JEL Classification: E66, J61, P52

Suggested Citation

Puhani, Patrick A., Labour Mobility - an Adjustment Mechanism in Euroland?. Available at SSRN: https://ssrn.com/abstract=392581

Patrick A. Puhani (Contact Author)

Leibniz Universität Hannover ( email )

Institut für Arbeitsökonomik
Koenigsworther Platz 1
30167 Hannover, DE 30167
Germany

University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research ( email )

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Switzerland
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IZA Institute of Labor Economics

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Germany

Université Paris II - Panthéon-Assas

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Paris cedex 06, 75231
France

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