Discussion

Summary

Riccardo Faini has given us a very nice survey/synthesis piece on European migration in his chapter 8. If I may be so bold as to summarise it, Faini's chapter essentially tells us that European labour does not move – not between nations, not within nations and certainly not in response to wage differentials – as many economists would expect. Why does it not move? Faini evaluates and dismisses four popular explanations. The immobility is not due to a narrowing of the wage gap, it is not due to international regulation or subtle international regulatory barriers, it is not due to demographics and it is not due to changes in the gaps between unemployment rates. The real answer lies in four assertions. First, as the level of incomes has risen, European workers wish to consume more ‘home amenities’ – i.e. the ability to enjoy one's consumption near one's friends and family. Second, employment agencies have done a poor job of advertising job openings beyond the boundaries of their regional and national boundaries. Third, obstructionist housing market policies have greatly increased the cost of moving. Lastly, unemployment support has made it feasible for workers to survive without jobs.

I am not a migration specialist, so I cannot make clever points about his arguments, data and/or empirics. What I will do instead is attempt to draw some conclusions from Faini's findings. The first is to question the desirability of boosting European labour mobility. As a migrant myself, and citizen of a highly mobile society (the United States), I find the lack of European mobility a social plus.