As COVID-19 crisis triggers economic downturn, sustained investments to address Europe’s skills and labor needs can help recovery

BRUSSELS — The COVID-19 crisis has disrupted labor markets across Europe and risks further entrenching existing weaknesses. However, the pandemic is not likely to fundamentally alter long-term labor demands, particularly for high-skilled vacancies that workers from outside the European Union are well situated to fill, a new Migration Policy Institute Europe policy brief finds.

In COVID-19 and the Demand for Labor and Skills in Europe: Early Evidence and Implications for Migration Policy, Terence Hogarth of the University of Warwick’s Institute for Employment Research analyzes how the pandemic, along with demographic forces, automation and technological change are shaping the demand for workers and skills in the European Union in both the short and long term.

As some countries face the reality that their labor supplies will reduce and populations contract, Europe also is seeing its skills needs change rapidly. Hogarth notes that labor market trends project that the European market is expected to continue to bifurcate, with increased demand for high-skill managerial and professional jobs and slightly weaker growth in more low-skilled occupations. Immigrant labor has been, and will likely continue to be, important to meet demand for both skill tiers, Hogarth writes. But the pandemic risks further delaying Europe’s investments to address these pervasive skills and labor challenges.

In order to effectively recover from the current recession and build a more skilled future labor force, policymakers will need to carefully balance various considerations, including:

• The position of migrants and other workers already resident in the European Union. Policymakers should expand existing upskilling and training efforts to support the local workers most affected by the recession and better prepare them for future skills demands, including technological competency. In addition, policymakers should continue to prioritize the integration of migrants resident in Europe, both to ensure that they are regarded as long-term assets and signal to prospective foreign workers that Europe values their contributions.
• Short-term employment and skill needs. Migration of non-EU workers is likely to remain an important tool for helping European countries meet some skill needs. Governments will need to be transparent and clear about why they are recruiting foreign labor and under what circumstances, in order to address local concerns about wage decline and job replacement.
• Longer-term skill needs. To attract highly skilled individuals and exceptional talent, the European Union and its Member States need to continue reviewing their policies to make it easier for those with particularly scarce skills to enter and, in doing so, allow Europe to better compete with other regions for such workers. Students from third countries are a particularly important source of future skills, and policies should be put into place to better retain them upon completion of their studies.

"The ongoing COVID-19 crisis and its impact on the labor market — especially employment and unemployment levels — run the danger of diverting attention from the longer-term skill needs of the European Union," Hogarth writes. "Migration from third countries has and will continue to have an important role in Europe’s efforts to meet these needs and remain competitive. Yet if migration to the European Union is to continue, even at a time of relatively weak labor market demand, there needs to be a transparent system in place to indicate where there are needs and why immigration is the right tool to meet them."

Read the brief here: www.migrationpolicy.org/research/covid-19-labor-skills-europe-migration-policy.

This issue brief was commissioned to inform an MPI Europe roundtable in October 2020 focused on assessing labor market needs and the role of migration in light of the pandemic. The roundtable took place under the aegis of a new MPI Europe initiative, ‘Legal Migration in a Changing World of Work: Creating forward-looking labour migration policies for Europe’, with support from the Open Society European Policy Institute. 

# # #

MPI Europe provides authoritative research and practical policy design to governmental and non-governmental stakeholders who seek more effective management of immigration, immigrant integration and asylum systems, as well as better outcomes for newcomers, families of immigrant background and receiving communities throughout Europe. MPI Europe also provides a forum for the exchange of information on migration and immigrant integration practices within the European Union and Europe more generally.