Global Insights and EU Elections: Fiscal restraint and the political economy of Europe. The popularity of the European idea was instrumented to enforce fiscal discipline. What has happened?

Once upon a time, there was a European dream: Joining Europe and the European Monetary Union would bring prosperity, fiscal stability, and a strong European currency to master the challenges of the continent. The forthcoming elections this Sunday are held in the face of rising unhappiness about Europe, although the need to deal with the substantial challenges would require more collaborations and a stronger, not weaker Europe. Among the challenges are the Russian aggression, climate change, terrorism, illegal immigration, labor shortages, US-China tensions, public health issues, and the rise of the right across European member countries, among many more issues. Hence, voting is an obligation in the current European elections.

Fiscal restraint and the political economy of Europe: In the past, member states instrumented the popularity of the European idea to enforce national fiscal discipline and implement important reform policies. Looking back at what happened over a quarter of a century:

The paper “Fiscal Restraint and the Political Economy of EMU” by Ralph Rotte and Klaus F. Zimmermann, published in Public Choice in 1998, discussed the impact of the Maastricht Treaty on fiscal policies.

The authors argued that the Maastricht Treaty provided a unique international commitment that enabled governments to follow restrictive fiscal policies by attributing their negative effects to Europe. This allowed them to implement austerity measures despite rising unemployment or declining growth.

The authors suggested that the popularity of the European idea was used to enforce fiscal discipline. While the principle of delegation had become well established on the national level for monetary policy, fiscal policies remained in the hands of policymakers depending on rent-seeking interest groups.

The study outlined the political-economy framework and presented new econometric evidence. The findings provided insights into the dynamics of fiscal restraint within the context of the European Monetary Union.

Abstract: “While the principle of delegation has become well established on the national level for monetary policy, fiscal policies remain in the hands of policy makers depending on rentseeking interest groups. We argue that the Maastricht Treaty provides a unique international commitment that enables governments to follow restrictive fiscal policies by attributing their negative side-effects to Europe, and to implement austerity measures despite rising unemployment or a decline in growth. Hence, the popularity of the European idea is instrumented to enforce fiscal discipline. The paper outlines the political economy framework and presents new econometric evidence.”

From the conclusions: “Our empirical evidence shows that there is a distinguished effect of the Maastricht commitment on fiscal policies in Europe, and strengthens the conjecture that it is the support for the EU and the character of EMU as a genuinely European project which has made a fundamental change in economic policy all over Western Europe possible. The unique combination of the international character of the Maastricht commitment and the Europeans’ persistent support of the EU project thus provide the framework for fiscal reform in Europe.”

Rotte, R., Zimmermann, K.F. Fiscal restraint and the political economy of EMU. Public Choice 94, 385–406 (1998).
https://doi.org/10.1023/A:1005042015560

Featured image: arnaud-jaegers-unsplash

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Klaus F. Zimmermann Appointed Honorary Professor at IESR, Jinan University

Deeply honored by the appointment to Honorary Professor at IESR, Jinan University, in the middle of the exciting Seventh IESR-GLO Joint Workshop (includes program & event pictures) which took place on May 16 – May 17, 2024 at Jinan University, Guangzhou, China. Supported by the Journal of Population Economics, the event investigated the challenges of “Aging Societies: Healthy Aging, Grandparenting, and Parent-Adult Offspring Relationships“. Thanks to Dean Shuaizhang Feng for support and collaborations over many years!

Left: With Shuaizhang Feng, Dean of IESR; Jinan University.
Right: With Chunchao Wang, Dean of School of Economics, Jinan University; and Prof. Feng.

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The 7th IESR-GLO Workshop on Aging Societies starts today with a focus on Healthy Aging, Grandparenting, and Parent-Adult Offspring Relationships.

The Seventh IESR-GLO Joint Workshop takes place on May 16 – May 17, 2024 in Jinan University, Guangzhou, China. Supported by the Journal of Population Economics (JOPE), the event investigates Aging Societies: Healthy Aging, Grandparenting, and Parent-Adult Offspring Relationships; topics JOPE is strongly interested to publish top research articles. The (in-person only) workshop intends to explore the research potentials. GLO President and JOPE Editor-in-Chief Klaus F. Zimmermann will open the event, which is jointly organized with IESR Director and JOPE Editor Shuaizhang Feng and JOPE Associate Editor Sen Xue of Jinan University.

For the full program and related literature see the GLO Website Workshop Page.

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GLO Berlin 2024 & EBES 47 on April 18-20, 2024.

EBES 47 and GLO Berlin 2024, a larger joint conference hosted by FOM University of Applied Sciences in Berlin took place during April 18-20, 2024. EBES and GLO are very grateful for the wonderful setup and effective support of FOM, in particular by Manuela Zipperling, FOM’s Berlin Head.

Conference welcome by GLO Director Matloob Piracha, EBES Vice President Mehmet Bilgin and FOM Berlin Head Manuella Zipperling.

FOM Head Manuella Zipperling during the conference opening

On the initiative of EBES and its Vice-President Mehmet Huseyin Bilgin, a session in honor of Klaus F. Zimmermann, President of EBES and GLO, was organized and took place on April 18. The panel session was a guided tour of some parts of Zimmermann’s academic life of Zimmermann and a review of some of his academic contributions.

Networking and Evidence-based Policymaking: Zimmermann was strongly involved in networking, the creation of infrastructure for research and policy advice, and supporting evidence-based policymaking. Examples include (see LINK for more). 1986: Creation of the European Society of Population Economics (ESPE), first Secretary, and later President of ESPE. 1991-2001: Program Director of the Centre for Economic Policy Research (CEPR) for first “Human Resources” and later for “Labour Economics”. 1998-2016: Director of IZA, building up of IZA’s research network. 2000-2011: President of Deutsches Institut für Wirtschaftsforschung (German Institute for Economic Research, DIW Berlin). 2014 – 2020: Chair of the Section for Economics, Business and Management Sciences of the Academia Europaea, the Academy of Europe. Since 2017: President of Global Labor Organization (GLO) gGmbH. About 2100 members in over 131 countries. Since 2023: Leopoldina: Senator and Chair (“Obmann”) of Section 25 “Economics and Empirical Social Sciences” of Leopoldina, the National Academy of Sciences of Germany. Zimmermann has also created the Journal of Population Economics (JOPE) and manages it since 37 years. Its impact factor makes JOPE the leading academic journal in demography and a top field journal in economics. For a review of his publications on evidence-based policymaking, see LINK. Contributions include K. F. Zimmermann: “Advising Policymakers through the Media”, Journal of Economic Education (2004); 35, 4; 395-405. K. F. Zimmermann: “Der Berater als Störenfried: wirtschaftswissenschaftliche Politikberatung”, Wirtschaftsdienst, 88 (2008), 101-107. R. Ketzler; K. F. Zimmermann: “A Citation-Analysis of Economic Research Institutes”. Scientometrics, 95 (2013), 1095-1112. K. F. Zimmermann: Evidenzbasierte wissenschaftliche Politikberatung, Schmollers Jahrbuch, 134:3 (2014), 259-270. Zimmermann created with Alexander Kritikos the IZA World of Labor project, see “Evidence-based Policy Making in Labor Economics. The IZA World of Labor Guide 2015.”, Bloomsbury London, New York 2015. Kritikos is a member of the Board of DIW Berlin and a Professor at the University of Potsdam.

Labor Market Reforms (Agenda 2010 & beyond): As DIW President, IZA Director and Chairman of the Society of the German Economic Research Institutes (ARGE), Zimmermann was a close advisor of the Federal Government including the chancellor Gerhard Schröder, the responsible reform minister of economics and labor (Wolfgang Clement) as well as the CEO of the German Federal Agency for Employment (Frank-Jürgen Weise). In addition, frequent exchanges with Alan Krueger, chief economist (Council of Economic Advisors) of Barack Obama in Washington, as well as with policy advisors in Beijing. Before the reforms: Only four of the about 80 labor market instruments in place could be shown to have some effect (“And Then There Were Four … How Many (and Which) Measures of Active Labor Market Policy Do We Still Need?, Applied Economics Quarterly, 53, 2007, 243-272; Zimmermann with W. Eichhorst). After the successful reforms, Germany’s labor market responded only mildly to the Great Recession. Important factors for this development include a strong economic position due to recent labor market reforms, the crisis mainly affecting export-oriented companies, the extension of short-time work, time buffers due to working time accounts, the behavior of social partners, and automatic stabilizers (“Another Economic Miracle? The German Labor Market and the Great Recession”, IZA Journal of Labor Policy, 1 (2012), Article 3; Zimmermann with U. Rinne). Short-time work was a core instrument to fight unemployment during the Great Recession (“Short-Time Work: The German Answer to the Great Recession, International Labour Review, 152, 2013, 287-305; Zimmermann with K. Brenke and U. Rinne). Germany became the role model for an effective labor market policy (“Is Germany the North Star of Labor Market Policy?”, IMF Economic Review, 61, 2013, 702-729; Zimmermann with U. Rinne). Alessio Brown is co-director of POP at UNU-MERIT and has been Director of Strategy and Research Management and Member of the Board at IZA. He was the Founding Director of GLO.

Migration and EU-Enlargement: Richard Portes of CEPR had appointed Zimmermann in 1991 as the Program Director Human Resources to initiate migration economics in Europe through networking and the organization of a larger number of research conferences. The project output included stock taking books like “Migration. The Controversies and the Evidence” (1999, Zimmermann with R. Faini & J. de Melo), Cambridge University Press, and “European Migration: What Do We Know?” (Zimmermann, 2005), Oxford University Press. These initiatives have had a very strong and lasting effect on the development of the field. Zimmermann continued this work later in his role as IZA Director in Bonn, collaborating closely with Martin Kahanec on the migration consequences of EU East enlargement starting in May 2004, two decades ago. Leading international research teams, both published a series of books and research reports including “EU Labor Markets After Post-Enlargement Migration” (2010, Zimmermann with Kahanec), Springer-Verlag and “Labor Migration, EU Enlargement, and the Great Recession” (2016, Zimmermann with Kahanec) Springer-Verlag. In 2013, Zimmermann received the Outstanding Contribution Award of the European Investment Bank for his research on migration. Martin Kahanec was a senior researcher at IZA. He is a Professor at the Department of Public Policy at the Central European University (CEU) in Vienna and director of the Shattuck Center for Human Rights. Previously, Martin Kahanec acted as the Dean of CEU’s School of Public Policy. He is the Chair of the Section for Economics, Business and Management Sciences of the Academia Europaea, the Academy of Europe.

From the left: Dorothea Schäfer, Klaus F. Zimmermann, and Lucie Merkle

Lucie Merkle was one of the first doctoral students of Zimmermann during his tenure at the University of Munich. They co-authored 1992 “Savings, Remittances, and Return Migration” in Economics Letters 38, 77-81 (301 Google citations), a seminal paper on the savings behavior of migrants. A civil servant of the State of Bavaria, Merkle, has since served in the United States, China, Bruxelles, and Berlin.

During Zimmermann‘s period as President of DIW Berlin, Dorothea Schäfer was appointed Editor-in-Chief of the Vierteljahrshefte der Wirtschaftsforschung (Quarterly Journal of Economic Research), the oldest publication format of DIW Berlin founded in 1926. This outlet played an important role in communicating evidence-based advice for policymaking. During the financial market crisis, Schäfer and Zimmermann co-authored a bad bank proposal (Bad Bank(s) and Recapitalisation of the Banking Sector, Vox of 13 June 2009) in the spirit of the later employed reforms in the United States. Their 2010 joint book “Finanzmärkte nach dem Flächenbrand” reflected the crisis and draw lessons for policymaking. Dorothea Schäfer is the Editor-in-Chief of the Eurasian Economic Review.

Highlights of joint collaborations (from the left):

Klaus F. Zimmermann & Alexander S. Kritikos (eds.): Evidence-based Policy Making in Labor Economics. The IZA World of Labor Guide 2015. Bloomsbury London, New York 2015.

Klaus F. Zimmermann & Dorothea Schäfer: Finanzmärkte nach dem Flächenbrand. Warum es dazu kam und was wir daraus lernen müssen. Gabler Wiesbaden 2010.

Martin Kahanec & Klaus F. Zimmermann (eds.): EU Labor Markets After Post-Enlargement Migration. Springer. Berlin. Heidelberg 2010.

From the left: Mehmet Huseyin Bilgin, Martin Kahanec, Dorothea Schäfer, Klaus F. Zimmermann, Lucie Merkle, Alessio Brown, and Alexander Kritikos

Special dinner event on April 18:

Berlin Zoo April 21, 2024: Post-conference experiences

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Start of FU Seminar on „Forschung und Politikberatung (Research and Policy Advice)“ at the 300th birthday of Immanuel Kant.

 “Sapere aude, habe den Mut, dich deines Verstandes zu bedienen” war der Leitspruch der Aufklärung. Am 300-ten Geburtstag von Immanuel Kant war es deshalb angemessen, damit das Seminar von Klaus F. Zimmermann im SS 2024 an der Freien Universität Berlin zu „Forschung und Politikberatung“ zu beginnen. Die eigenständige Bedienung des Verstandes bei der wissenschaftlichen Politikberatung ist essenziell.

In front of Boltzmannstr. 20, Berlin, the home of economists at the Free University Berlin.

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Back to Berlin for EBES 47 and GLO Berlin 2024

Back to Berlin for EBES 47 and GLO Berlin 2024 to organize a strong academic conference in collaboration with FOM University of Applied Sciences and the Journal of Population Economics (JOPE) on April 18-20. For the final GLO – JOPE program see GLO Berlin 2024 and the full joint program see EBES 47 Berlin. Klaus F. Zimmermann will also start his student seminar on Research & Policymaking at the Free University Berlin in his role as Honorary Professor there.

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Züricher Reise

February 29 to March 2: Zürich, Switzerland. Verein für Socialpolitik, Ausschuss für Bevölkerungsökonomik (Section Population Economics). Annual conference participation. Nice to meet many excellent labor and population economists and to follow excellent new research papers.

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Research conference: GLO Berlin 2024, April 18-20. Submission deadline: February 29.

GLO Berlin 2024 Conference – Call for Papers 

Call for contributed papers or sessions for the GLO Berlin 2024 Conference on April 18-20. Contributions are invited to broadly defined labor, population, family, health, crime, conflict and other human resources issues.

The event is jointly organized with EBES 47 at FOM University of Applied Sciences, Berlin. GLO organizes a separate program with separate registration and paper call. Participants of EBES 47 Berlin and GLO Berlin 2024 will have access to all program parts of both conferences.

The event is HYBRID: Presentations on the first two days will be in-person only, and on the last day only online. Online attendees can follow all the program parts of the conference on all three days.

I invite you to visit lovely Berlin for a productive research conference! The city is a vibrant place offering many surprising features. For instance, it is known for its extensive waterways, including rivers, canals, and lakes.

Submissions can be (i) individual contributions with abstract only or full papers with abstract, or (ii) full sessions with six contributions consisting of six abstracts and possibly papers. Providing full papers increases the chance of acceptance.

Individual contributions submitter have to decide whether they want to be considered for (i) a regular contributed session or (ii) a Journal of Population Economics Express Evaluation Session (JOPE-EES).

JOPE-EES: Submissions for this category require a full paper and abstract. Those rejected for this session will still be considered for regular contributed sessions. If accepted for JOPE-EES, authors have to register for the conference either for the in-person or online version of the conference; they also have to submit their paper to JOPE while registering to the conference after the acceptance decision. These submissions will pass the desk rejection phase of the journal and receive an express evaluation within six weeks after the conference. Topics related to JOPE’s collections are particularly welcome, see   https://link.springer.com/journal/148/updates/25524106

Sergio Scicchitano

Program Committee: Sergio Scicchitano (John Cabot University, Rome, Italy; Chair )
Guido Cozzi (University of St. Gallen, Switzerland); Shuaizhang Feng (Jinan University, Guangzhou, China) Alfonso Flores-Lagunes (Syracuse University, USA); Andrea Fracasso (Trento University, Italy); Oded Galor (Brown University, USA); Hilary Ingham (Lancaster University, UK); Jungmin Lee (Seoul National University, South-Korea); Ilaria Mariotti (Polytechnic of Milan); Terra McKinnish (University of Colorado); Valentina Meliciani (Luiss University); Silvia Mendolia (Turin University, Italy); Milena Nikolova (University of Groningen, The Netherlands); Matloob Piracha (University of Kent, UK); Vicente Royuela (University of Barcelona, Spain); Kompal Sinha (Macquarie University, Sydney, Australia); Cristina Tealdi (Heriot-Watt University, Edinburgh, UK); Chiara Mussida (Università Cattolica del Sacro Cuore– Piacenza, Italy); Klaus F. Zimmermann (GLO, UNU-MERIT & FU Berlin, The Netherlands, Germany)

The Program (joint with EBES) will include an evening event, speeches and contributions by Mehmet Huseyin Bilgin (Vice President, EBES & Istanbul Medeniyet University), Alessio Brown (UNU-MERIT, Maastricht), Martin Kahanec (Central European University), Christos Kollias (University of Thessaly), Alexander Kritikos (DIW Berlin & Potsdam University), Lucie Merkle (Berlin, Free State of Bavaria), Dorothea Schäfer (DIW Berlin and Jönköping University), Sergio Scicchitano (John Cabot University, Rome, Chair GLO Program), Klaus F. Zimmermann (Free University Berlin, UNU-MERIT & GLO/EBES), Manuela Zipperling, (FOM University of Applied Sciences, Berlin)

Keynote speech: Martin Kahanec Rebuilding Ukraine in Higher Education

Submissionshttps://editorialexpress.com/conference/GLOBerlin2024/
Submission open since January 24, 2024 – no submission fee
Deadline: February 29, 2024.
Open until midnight on US east coast time = midnight CET Berlin + 6 hours.

Decisions will be communicated until March 6, 2024.
Conference registration until March 22, 2024.

BREAKING NEWS: Submissions still open until March 6 while we communicate first-round decisions.

Participation fees: To be paid upon conference registration.
Regular: in-person € 500, online € 350
JOPE-EES: in-person € 600, online € 450
Fees for in-person participants include coffee breaks and lunch during the conference as well as the conference reception on April 18, 2024.
Fees for all participants include access to all keynotes and invited paper sessions of EBES 47 & GLO Berlin 2024. JOPE-EES authors will receive the express journal service.

Accommodation (not included): Suggestions will be provided with paper acceptance decision.

Conference venue: FOM University of Applied Sciences Berlin, Bismarckstraße 107, 10625 Berlin

Questions to Office@glabor.org

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Recent Research Publications

  • Christopher F. Baum, Hans Lööf, Andreas Stephan & Klaus F. Zimmermann (2024), “Estimating the wage premia of refugee immigrants: Lessons from Sweden”. Industrial and Labor Relations Review. Prepublication Version.

  • Guogui Huang, Fei Guo, Lihua Liu, Lucy Taksa, Zhiming Cheng, Massimiliano Tani, Klaus F. Zimmermann, Marika Franklin, S. Sandun Malpriya Silva (2023). “Changing impact of COVID-19 on life expectancy 2019–2023 and its decomposition: Findings from 27 countries.” SSM – Population Health, published online 3 December 2023, (2024), Volume 25, March 2024, 101568. OPEN ACCESS. DOI: 10.1016/j.ssmph.2023.101568

  • Guogui Huang, Fei Guo, Lucy Taksa, Zhiming Cheng, Massimiliano Tani, Lihua Liu, Klaus F. Zimmermann, Marika Franklin (2023).  “Decomposing the differences in healthy life expectancy between migrants and natives: the “healthy migrant effect” and its age variations in Australia.” Journal of Population Research, published online 29 November 2023, (2024) 41:3, ONLINE VERSIONPDF.
  • Guogui Huang, Fei Guo, Zhiming Cheng, Lihua Liu, Klaus F. Zimmermann, Lucy Taksa, Massimiliano Tani and Marika Franklin (2023). “Nativity in the healthy migrant effect: Lessons from Australia.” SSM-Population Health.
    Open Access. https://doi.org/10.1016/j.ssmph.2023.101457
  • Amelie F. Constant, Simone Schüller and Klaus F. Zimmermann (2023). “Ethnic spatial dispersion and immigrant identity.” Pre-Publication Version. Journal of Chinese Economic and Business Studies. Open Access: https://lnkd.in/eT-YvEfN
  • Guogui Huang, Fei Guo, Zhiming Cheng, Klaus F. Zimmermann, Lihua Liu, Lucy Taksa, Marika Franklin and Massimiliano Tani (2023). “The effect of the COVID-19 pandemic on life expectancy in 27 countries.” Scientific Reports 13, Article number: 8911 (2023). Open Access. https://doi.org/10.1038/s41598-023-35592-9 

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Global Insights: EU free movement of people under threat: Is the mobility growth engine stuttering?

EU free movement of people under threat: Is the mobility growth engine stuttering? by Klaus F. Zimmermann

Migration is one of the growth factors behind successful economies. Immigration helps to moderate the decline of shrinking populations. Fluctuating and flexible workers ensure an optimal supply of goods and services through adapting to economic needs.1 Free movement of persons is a fundamental right that provides European Union (EU) citizens the option to move and work freely within the EU. The concept of an open labor market forms an integral part of the European economic model and is one of EU’s major achievements. For decades, the four fundamental freedoms of the internal market have brought development, prosperity and social security to European economies. It is these fundamental freedoms and not the commitment to the principles of democracy and human rights that make Europe attractive in the world.

Given the increasing crises and conflicts in Eurasia and Africa, the population explosion in Africa with its enormous labor potential and the increasing need for skilled workers in Europe due to population decline, the question arises as to whether the freedom of movement of people in the EU is at stake. Illegal and legal immigration reinforces the trend of alienation of European populations from Europe and leads to political radicalization, especially on the right side of the political spectrum. The challenge is to stem the flow of illegal immigration while simultaneously attracting the skilled workers needed in Europe. Questions arise as to whether legal restrictions and asylum restrictions are effective means of overcoming these challenges, and whether abandoning or restricting the free movement of people can be considered as viable measures to maintain social balance in European societies.

The pre-Christmas European asylum compromise is considered by many as historically significant. The various elements of this compromise have long been intensely debated at the political level and were also considered inevitable in academia.2 One of the main provisions stipulates that asylum seekers must register and undergo biometric recording at the EU’s external borders. In reception centers (“strictly controlled reception facilities” for applicants from “safe countries of origin”), their applications should be promptly assessed, and repatriations to countries without threat should be initiated swiftly. Countries not located at the borders agree to either take in a quota of asylum seekers or provide compensation payments. This compromise requires a European standardization of national procedures and focuses on combating human traffickers as well as addressing the root causes of migration in the countries of origin.

An organized, humane, and prompt examination of asylum applications at the European external borders, that is, on European soil with a uniform and fair procedure, would undoubtedly be a step forward compared to the current practice. The current practice involves either informally passing migrants from EU border countries to other EU countries with lengthy procedures and potential later deportations. Alternatively, the resolution of the problem is achieved through compensation payments to transit states such as, for example, Turkey or Libya, without consideration for humanitarian criteria or asylum principles. Under an assessment according to the new European asylum compromise in a European first-entry country and successful recognition, asylum seekers could then freely choose which EU host country they want to go to, or they could even be placed in host countries based on social and economic criteria.

The implementation of the regulations of the asylum compromise in practice will be crucial. It is undeniable that the European border countries need material and ideal support for their services. The agreement, politically marketed as a “tightening,” may bring short-term political relief as long as belief in access restrictions persists, especially in the critical election year of 2024, including for the European Parliament. However, in practice, the political pressure on established political parties due to the issue of illegal immigration will not diminish so easily. The potential for illegal immigration from the poverty- and crisis-stricken regions of the world, especially from Africa, remains significant and is expected to increase substantially in the future. Experience shows that institutional restrictions and government limitations often lead to more illegality among immigrants. The issue of illegal immigration will therefore continue to concern the EU in the future. And deportations remain difficult; they often fail because of the unresolved question of where the people originally came from.

If efficiently implemented, the asylum compromise could lead to accelerated recognition and more targeted distribution of asylum seekers. In particular, targeted profiling could contribute to improved integration into the labor market and society. At the same time, the challenge posed by illegal labor migrants persists, and their influx and presence are likely to increase. Thus, the overall potential for mobility through EU external immigrants remains high or may even rise. However, it is also less likely that these developments will significantly alleviate the structural shortage of skilled workers in parts of Europe in the long term.

The shortage of skilled workers, especially in countries like Germany, is structurally driven and results from a demographic process of aging and population decline. This phenomenon has been foreseeable for decades, but policymakers have neglected to implement timely adjustment measures, such as a significant increase in the retirement age. The population decline inevitably leads to a reduction in the domestic labor potential, while increasing aging restricts labor mobility and migration. However, the mobility of European populations will be crucial to successfully address these challenges.

To address the shortage of skilled workers and mobility deficits, a labor market-oriented immigration policy could make a contribution. In Germany, the federal government plans to expedite the naturalization process for migrants, allowing them to become citizens after just five years of residence in the country, or even after three years if they can demonstrate proficiency in the language, successful academic or professional achievements, or engagement in volunteer activities. Dual citizenship is set to become possible, and for the recruitment of older workers under state agreements, written German exams and naturalization tests may be waived. These measures aim to make Germany more attractive to skilled professionals, although it is not yet clear why this is expected to succeed. However, this is the subject of ongoing parliamentary debates that are likely to extend well into the year 2024.

It should be emphasized that abandoning the free movement of people entails significant economic costs in the form of welfare losses in Europe. This not only leads to a reduction in goods and services but also results in lower government and social compensation. Furthermore, fewer resources are available to respond adequately to the current challenges amid the “Zeitenwende.” This includes financing higher defense expenditures, implementing better security systems to combat terrorism, and supporting Ukraine in defending Western security and societal values. The origin countries of these challenges are notably in the regions of the Arabian Peninsula, Africa, and Asia.

Security is another category against which the free movement of people must assert its value. Organizing a secure free movement of people in the future is certainly achievable but likely requires significant additional resources. The dilemma lies in the fact that freedom of movement, through external immigration to the EU and high internal labor mobility, substantially contributes to generating the financial means necessary to address these challenges. The feasibility of this is not a question of economic knowledge but a political design task. If we fail to convince the general public and society of the benefits of continued high levels of immigration and flexible labor mobility, the challenges to democracy and the potential to deliver economic performance in Europe could become worrisome.

References

1 Klaus F. Zimmermann: Migration, Jobs and Integration in EuropeMigration Policy Practice, Vol. IV, Number 4, October – November 2014, 4 – 16.

2 Holger Hinte, Ulf Rinne and Klaus F. Zimmermann: Flüchtlinge in Deutschland: Herausforderungen und ChancenWirtschaftsdienst, 95 (2015), 744-751.

Ulf Rinne and Klaus F. Zimmermann: Zutritt zur Festung Europa? Neue Anforderungen an eine moderne Asyl- und FlüchtlingspolitikWirtschaftsdienst, 95 (2015), 114-120.

Holger Hinte, Ulf Rinne and Klaus F. Zimmermann: Punkte machen?! Warum Deutschland ein aktives Auswahlsystem für ausländische Fachkräfte braucht und wie ein solches System aussehen kann, Perspektiven der Wirtschaftspolitik, 2016, 17(1): 68-87.

Zimmermann, Klaus F., Refugee and Migrant Labor Market Integration: Europe in Need of a New Policy Agenda in: Bauböck, R. and Tripkovic, M.,  The Integration of Migrants and Refugees.  An EUI Forum on Migration, Citizenship and Demography, European University Institute, Robert Schuman Centre for Advanced Studies, Florence 2017, pp. 88 – 100.

Note
English version of: Klaus F. Zimmermann, EU-Personenfreizügigkeit in Gefahr. Stottert der Wachstumsmotor Mobilität? Opinion Piece (op-ed) in Wirtschaftliche Freiheit. Das ordnungspolitische Journal, 29 December 2023. Link.

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