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Despite the fact that Europe’s economies have been adjusting to increased flows of foreign-born workers for a decade now, there remain important discrepancies between the employment outcomes of migrants and non-migrants across the continent. Such discrepancies can represent significant losses of potential and talent, felt not only by migrants themselves but by the European economy as a whole.

Summary

This report presents new statistical analyses of European labour markets in order to identify where, how and to what extent migrants are underutilised. We define ‘underutilisation of migrants’ in terms of either a low employment rate or a misallocation of skills relative to the non-migrant population. Across Europe we found the following.

  • The difference between the employment rates of tertiary-educated migrants and tertiary-educated non-migrants is larger than the gap between migrants and non-migrants within any other qualification group, which indicates a lack of inclusivity in the high-skill jobs market.
  • Employment rates were also much lower among non-EU migrants in general (relative to non-migrants), irrespective of qualification level.
  • Of all the countries included in this study1 for which there was a sufficient sample size, only in the UK did migrants from both EU152 and NMS133 countries have higher employment rates than non-migrants.
  • The proportions of tertiary-educated migrants from NMS13 and non-EU countries employed in low-skill jobs were far higher than those of their counterparts in the non-migrant population.

Following our analysis of this issue across Europe as a whole, we conduct a comparative analysis of migrant employment outcomes in Germany and the UK and present the following findings.

  • On average, migrants have higher employment rates in the UK than in Germany.
  • In Germany, all migrant groups have lower employment rates than non-migrants, while in the UK this is true only of non-EU migrants.
  • The low employment rates of non-EU migrants in both countries (relative to those of non-migrants) can be almost entirely accounted for by lower employment rates among women in the migrant population compared with women in the non-migrant population.
  • In the UK, the employment of certain nationality groups is much more concentrated in specific (low-skill) sectors of the economy than in Germany.
  • The higher employment rates among NMS13 and non-EU migrants in the UK, relative to those in Germany, appear to have come at the cost of higher proportions of tertiary-educated migrants in these nationality groups being employed in lower-skill jobs.
  • This overqualification is most common among men who took up residency prior to 2007.

In discussing employment outcomes for migrants we consider the interactions of a complex set of dynamics that arise from issues related to gender, discrimination, migration routes, labour market structures, employment rights and professional and social networks. Collectively, these factors contribute not only to a lack of inclusivity in the high-skill jobs market, but to higher concentrations of some migrant groups in lower-skill sectors of the economy. These characteristics of migrant employment outcomes need to be recognised not only by policymakers but by firms and employers themselves, particularly those in the classic ‘professional’ sectors of European economies.

1 The ‘EU24’ group, referred to throughout, which consists of Austria, Belgium, Czech Republic, Poland, Slovakia, Slovenia, Greece, Hungary, Denmark, Finland, Estonia, Luxemburg, Iceland, Switzerland, Germany, Spain, Italy, the UK, Norway, Netherlands, Ireland, France, Portugal and Sweden.

2 The 15 member states of the EU prior to its expansion in 2004.

3 The 13 countries that have become members of the EU since 2004.