06 Dec 2016

Will a European unemployment benefits scheme affect labour mobility?

Cinzia Alcidi / Mikkel Barslund / Matthias Busse / Francesco Nicoli

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Labour mobility in the EU is comparatively low, despite major efforts from the European Institutions to support cross-border mobility. This study evaluates the potential implications of a European Unemployment Benefits Scheme (EUBS) for labour mobility in the EU. We find that the introduction of an EUBS, irrespective of whether it takes the form of a genuine scheme or an equivalent scheme, is unlikely to have a substantial impact on the magnitude of EU mobility. An EUBS might be introduced alongside certain features designed to stimulate labour mobility, such as an extension of exportability of unemployment benefits or closer cooperation with national employment agencies. While both will positively impact mobility, its effect is likely to be marginal in light of the low uptake of exportability and the lagged responsiveness of mobility to shocks. Overall we assert that an EUBS may marginally facilitate labour mobility if the system is geared to advance this objective, but not more.

Cinzia Alcidi is Senior Research Fellow and Head of Economic Policy Unit, Mikkel Barslund is Research Fellow, Matthias Busse is Researcher and Francesco Nicoli is Visiting Fellow at CEPS. The authors are grateful to Frank Vandenbroucke for his valuable comments.