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Labour Mobility: An Adjustment Mechanism in Euroland? Empirical Evidence for Western Germany, France and Italy

Patrick Puhani

German Economic Review, 2001, vol. 2, issue 2, 127-140

Abstract: We evaluate whether labour mobility is likely to act as a sufficient adjustment mechanism in the face of asymmetric shocks in Euroland. As no adequate data on cross‐border migration are available, migration elasticities within nation states (Western Germany, France and Italy) are estimated and interpreted as upper bounds for cross‐border migration elasticities between European nation states. Labour mobility is highest in Germany, followed by France and Italy. However, the accommodation of a shock to unemployment by migration takes several years. We conclude that labour mobility is unlikely to act as a sufficient adjustment mechanism to asymmetric shocks in Euroland.

Date: 2001
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German Economic Review is currently edited by Bernhard Felderer, Joseph F. Francois, Ivo Welch, Urs Schweizer and David E. Wildasin

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