introdUction

In recent years the world has experienced a substantial increase in international migration. The United Nations estimate that in 2005 around 191 million persons, representing 3% of world’s population, resided in a country other than the country where they were born.55 _{The figure for} 1960 was 75 millions or 2.5% of worlds’ population. International migrants tend to reside in the more developed countries. Almost one of every 10 persons living in the more developed regions is an immigrant. In contrast, nearly one of every 70 persons in developing countries is a migrant. Sixty per cent of the world’s migrants currently reside in the more developed regions. Most of the world’s migrants live in Europe (64 million), Asia (53 million) and Northern America (45 million).

Mass migration is not a new phenomenon. Significant migration flows between the old and the new world occurred from the middle of the 19th century until the 1920s (a period often identified with the first wave of globalisation), when flows dropped as a consequence of the national-origin quota system.56 _{Following the} introduction of “guest worker” programmes, some continental European countries such as Germany experienced sizeable immigration flows between mid-1950s and early 1970s. Waves of mass immigration also came from former colonies to France, the Netherlands and the UK. Between early 1970s and mid 1985, in conjunction with the oil shocks and the related economic uncertainties, economic migration slowed down considerably, and the main sources of migration became asylum seekers and refugees. Important flows of migrants were admitted in the Nordic countries on the ground

55 United Nations (2006), International Migration 2006, http://www.un.org/esa/population/

publications/2006Migration_Chart/Migration2006.pdf . 56 In the 1920s, the US Congress introduced the national- origin quota system allocating visas according to ethnic composition. As a consequence of this system, the inflows rate dropped dramatically; in the 1930s, 60 percent of all visas were awarded to applicants from Germany and the UK. Inflows rate in the US started to pick up again after the amendments to the National Immigration act in 1965, which lifted the national-origin quota system. Borjas, G. (1994), “The Economics of Immigration”, Journal of Economic Literature, pp. 1667-1717.

of humanitarian reasons in the 1970s; more recently, ethnic conflicts at the European borders resulted in large movements of refugees and asylum seekers. The fall of the iron curtain spurred east-west migration from Central and Eastern Europe.

As a consequence of these geopolitical changes, international migration flows has been rapidly increasing since the 1980s. Yet, the greatest increase in the stock of migrants was observed between the mid-1980s and the mid 1995 (Lowell, 2007).57 _{In this period, the stock of} migrant grew by 62% worldwide and more than doubled in the developed countries. Europe was the main destination area, while traditional emigration countries such as Spain, Italy, Greece and Portugal gradually turned out to be new immigration countries. The fraction of the EU population that is foreign-born reached 5% in 2006. From an European perspective, it is appropriate to further distinguish nationals from other Member States, for whom free movement within the EU is, generally, in place, from third country nationals, subject to the immigration and asylum legislations of each Member State. The stock of third-country nationals hovered around 3% in the EU, with sizeable differences across Member States.

The large number of immigrants and the rapid increase in the foreign population in some countries has prompted concerns about the possible negative effects on labour market opportunities of nationals. The perception that a large number of immigrants were low-skilled also made these concerns widespread especially among the less educated. Are migrants taking the jobs from natives? How migrants integrate in the hosting country? Is migration an economic burden for the host country, or it can provide a valuable contribution to raising economic growth in the long term?

A simple answer to these questions cannot be given. The economic impact of migration 57 Lowell, B.L. (2007), “Trends in International Migration Flows and Stocks, 1975-2005”, OECD Social Employment and Migration Working Papers no. 58. For a review of recent trends in migration to the EU and a discussion of policy options see Diez. Guardia, N. and K. Pichelmann (2006) “Labour Migration Patterns in Europe: Recent Trends, Future Challenges”.

depends on how fungible are migrants’ skills, on how their skills combine with those of the natives and on the response of the latter to the increase in the supply of foreign labour. In a medium- to long-term perspective, the final impact of immigration on labour market opportunities of nationals depends also on the mobility of capital and workers across sectors and geographical areas. Moreover, since many immigrants return back to their native countries,58 _{the effects of} migration on the labour market and on the welfare state of the hosting country depend on whether those who return are the most successful or people who have failed to do well. Nonetheless, there is wide agreement in the literature that the impact of migration on the labour market perspective of the native population is fairly small. For example, the International Organisation for Migration (2006) concludes that in a wide variety of jobs in Western Europe there is hardly any direct competition between immigrants and local workers... … The economic gains from immigration are small, but positive, with the benefits, invariably, distributed unequally. Most gains accrue to the migrants and owners of capital, and can have positive knock-on effects on global GDP levels. The losers are often local workers with similar skills to the migrants, but again the overall loss seems minimal”.59

The increased international mobility of people is an important aspect of globalization. There cannot be easy answers to the issue of the costs and benefits of migration, but what is certain is that migration will remain an important issue for the European Union over the coming years. Immigration and asylum of third-country nationals was inserted in the Treaty of Amsterdam. The European Council, at its meeting in Tampere in October 1999, set out the elements for a common EU immigration.60 The 2000 Communication of the Commission on

58 For example, out of five migrants (“ethnic Germans” excluded) only one was still living in Germany after 10 years from his/ her arrival and less than 35 per cent after 25 years. In Sweden, over a quarter of immigrants are estimated to leave within 5 years of their arrival (Edin, LaLonde and Aslund, 2000).

59 International Organisation for Migration (2006), “World Migration: Costs and benefits of international migration” 60 In 1994, a European Council Resolution prescribed that “Member States will refuse entry to their territories of third-country nationals for the purpose of employment”, see Council Resolution of 20 June 1994 on the limitation of admission of third-country nationals to the territory of the Member States for Employment.

a Community Immigration Policy 61 _recognised that immigration has an important role to play in releasing Europe’s potential. In its Communication of June 2003 on Immigration, Integration and Employment 62_{, the Commission} explored the role of immigration in the context of demographic ageing and outlined policy orientations and priorities to promote the integration of immigrants. The Thessaloniki European Council of June 2003 welcomed this Communication and stressed «the need to explore legal means for third country nationals to migrate to the Union, taking into account the reception capacities of the Member States». As a follow-up, the Commission adopted its first Annual Report on Migration and Integration in June 2004, where it announced its intention to work towards the definition of common basic principles for integration at EU level. In the 2005 Communication on a Common Agenda for Integration 63_{, the Commission encouraged} Member States to strengthen their efforts to develop comprehensive national integration strategies, while enhancing consistency between actions taken at EU and at the national level. The nexus between migration and development was tackled in a 2005 Communication, while the policy priorities in the fight against illegal migration of third country nationals were discussed in a 2006 Communication 64_{. The} recent Commission Communication on a Common immigration policy for Europe sets out a number of initiatives designed to ensure that economic immigration is well managed in partnership with the Member States. 65 _{The recent} Commission’s Strategic Report on the Lisbon strategy underlined the issue of migration as an emerging policy priority within the next three- year cycle of the Integrated Guidelines 2008- 2010. The European Council conclusions of December 2007 also point in this direction. Questions related to migration play a major role in the context of the integrated guidelines. Dealing with increased international migration is a global challenge, requiring closer cooperation between sending and receiving countries. Solutions should take into account the interests of all the countries involved as well as those of the migrants themselves.

61 COM(2000) 757. 62 COM (2003) 336 final. 63 COM(2005) 0389. 64 COM(2008) 359, 17.6-2008. 65 COM(2005) 0389.

Against this background, this focus will first present the main facts about immigration and labour market. While difficult to predict, economic analysis may provide a simple framework to assess the economic consequences of immigration. The mechanisms through which immigration influences labour market performance of the hosting country will be analysed in the second section. The third section reviews the findings of a vast and sometimes inconclusive empirical literature.66 _{The fourth} session concludes.

1.2. sEtting thE scEnE: immigration and