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Assessing the Social and Macroeconomic Impacts of Labour Market Integration: A Holistic Approach

Pavel Ciaian and d'Artis Kancs

No JRC99645, JRC Working Papers from Joint Research Centre (Seville site)

Abstract: In the age of globalisation and the knowledge economy, skill mobility is perceived as one of the key factors for fully unlocking the labour market potential. Assessing the social and macroeconomic impacts of increased skill mobility is an important though also challenging task, which requires a holistic approach. This study presents the dynamic spatial general equilibrium approach taken in the Regional Holistic Model (RHOMOLO) to better understand the relationship between education, skills, migration and economic growth. Two key channels of labour market adjustment -- upward skill mobility and spatial skill mobility -- are presented and explained in particular detail. By performing numerical simulations and conceptual analysis of labour market integration, we aim to facilitate understanding of the advantages and limitations of the approach taken in RHOMOLO, and its potential for education, skills and employment policy impact assessment. The results from our analysis suggest that a holistic approach is indeed crucial for capturing all the direct and indirect, short- and long-run effects, and it has a wide potential for assessing region-, sector- and skill-specific macroeconomic and social effects of policies aiming at integration e.g. of marginalised communities, such as Roma or refugees, into the EU labour markets.

Keywords: Dynamic spatial general equilibrium model; skills; education; employment; labour; migration; wage; human capital. (search for similar items in EconPapers)
JEL-codes: C68 D58 F22 J20 J61 J64 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-eur and nep-mig
Date: 2015-12
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Working Paper: Assessing the Social and Macroeconomic Impacts of the High-Skill Labour Market Integration: The European Qualifications Framework (2016) Downloads
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