Publication

The sovereign debt crisis in the eurozone has had dramatic consequences for European labor markets. In April 2012, almost 25 million people in the EU were out of work. This article argues that freedom of movement within the EU could help to provide them with new opportunities. It is reflexively assumed that an influx of workers has a negative impact on the domestic labor force. However, this short-term view ignores a number of dynamic developments that can soften the negative impact of lower wages and unemployment on the native workforce. In immigration regions, migration can trigger growth and overcome labor shortages and in out-migration regions, migration can contribute to lowering unemployment.