COVID-19 and the Demand for Labor and Skills in Europe: Early evidence and implications for migration policy
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Highlights
This brief analyzes how COVID-19 is reshaping European labour markets and what this means for skills investment and migration policy now and in the future.
- EU-27 output fell an estimated 7.4 per cent in 2020, while job vacancies dropped 31 per cent in Germany and 41 per cent in the United Kingdom between the third quarters of 2019 and 2020, hitting migrants and lower-skilled workers hardest.
- Before the pandemic, Europe was projected to face rising demand for high-skilled workers, yet in 2019 about 29 per cent of Europeans lacked basic digital skills and skills shortages persisted in key sectors.
- Immigrants already living in Europe faced elevated risks of job loss, in-work poverty, and social exclusion, reinforcing the need to keep migrant integration on the policy agenda despite fiscal pressures.
- Policy recommendations include maintaining transparent shortage-occupation lists to justify continued labour migration, sustaining investments in integration and upskilling, and reforming the EU Blue Card to attract and retain high-skilled workers.
The European Union and several of its Member States have in recent years launched policies designed to increase the demand for and supply of skilled workers in Europe. This includes educating or attracting non-EU workers with in-demand digital skills and those with the expertise needed to further other policy aims, such as the European Union’s Green Deal. These were already ambitious goals before the COVID-19 pandemic hit, heralding an economic recession and high levels of unemployment.
Weathering this crisis and setting the stage for a speedy recovery are now top priorities for policymakers across Europe. Yet longer-term labor market trends linked to technological developments and demographic shifts in some countries—as residents age and older workers leave the workforce—remain important, even as pandemic-related labor market disruptions and constrained national budgets may make pursuing policies to adapt to these changes more difficult.
This MPI Europe issue brief explores how the pandemic is shaping the demand for workers and skills in the European Union, and how policymakers can respond to these trends. It also considers how leaders can keep one eye on Europe’s longer-term skills needs. Among its recommendations are investments in education and training systems; in measures that ensure migrants living in Europe are able to successfully integrate into the labor market and apply their skills; and in data-driven, transparent mechanisms to detect where resident workers are unable to meet labor demands and migration from beyond the European Union may be needed.
Table of Contents
1 Introduction
2 Europe’s Labor and Skills Challenge
3 Policy Responses to Emerging Skills Needs
4 The Impact of COVID-19 on the Demand for Skills and the Future of Work
5 Conclusion and Recommendations
A. The Position of Migrants and Other Workers in the European Union
B. Short-Term Employment and Skill Needs
C. Longer-Term Employment and Skill Needs
D. Final Reflections
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