Labour Markets Performance and Migration vol 1

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European Commission
Directorate-General for Economic and Financial Affairs














Labour Markets Performance and
Migration Flows in Arab Mediterranean
Countries: Determinants and Effects
Volume 1
Final Report & Thematic Background Papers










EUROPEAN ECONOMY
Occasional Papers No. 60

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STUDY
LABOUR MARKETS PERFORMANCE AND MIGRATION FLOWS
IN ARAB MEDITERRANEAN COUNTRIES:
DETERMINANTS AND EFFECTS

The European University Institute (RSCAS) was selected by the
European Commission to carry out a Study on “Labour Markets
Performance and Migration Flows in Arab Mediterranean Countries:

Determinants and Effects” (Nº ECFIN/D/2008/036).
Co-financed by the

European Commission
(DG Economic and
Scientific Director: Philippe Fargues
Financial Affairs
Project Coordinator: Iván Martín
and DG Employment)

Objectives

The objectives of the Study are two-fold:

to analyze the key labour market determinants of migration flows from selected Arab
Mediterranean Countries (Algeria, Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia and the
Occupied Palestinian Territories), with a particular emphasis on demographic pressures, wage
differentials and relative income disparities with the EU, employment policies, labour market
flexibility and unemployment rates; this analysis includes the impact of migration on the
labour markets of Arab Mediterranean Country (AMCs) labour markets;
to propose a series of specific recommendations to improve the design of the EU’s migration
policies towards AMCs and policy options available to them for the management of
mismatches between labour supply and demand.
Team of Experts for the Study

Philippe Fargues, Migration Programme Director, RSCAS-EUI
Iván Martín, Project Coordinator, RSCAS-EUI, and ICEI, Spain
Samir Aita, General Manager, A Concept Mafhoum
Rafik Bouklia, Université d’Oran, Algeria.
Jad Chaaban, American University of Beirut, Lebanon
Brahim El-Mouaatamid, Research Assistant, CARIM Project, EUI-RSCAS
Thoraya El-Rayyes, ILO Arab States Regional Office, Jordan
Tamirace Fakhoury, Research Assistant, CARIM Project, EUI-RSCAS
Larabi Jaidi, Université Mohammed V de Rabat, Morocco
Nathalie Jouant, Research Assistant, CARIM Project, EUI-RSCAS
Mustafa Khawaja, Palestinian Central Bureau of Statistics, Palestine
Azzam Mahjoub, Université de Tunis, Tunisia
Francesca Marchetta, University of Florence
Mohammad Omari, Palestinian Central Bureau of Statistics, Palestine
Ibrahim Saif, Carnegie Endowment for International Peace.
Fatiha Talahite, CNRS, Université Paris 13 Nord, France
Alessandra Venturini, Executive Director, CARIM, EUI, and Universitá de Torino
Jackline Wahba, University of Southampton, UK
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Background papers
To cope with the ample regional diversity and the variety of issues addressed in the Study, 10
background papers were commissioned to feed the Study:
8 national background papers on labour markets performance and migration flows in
Arab Mediterranean Countries. A country-by-country analysis (Algeria, Egypt, Jordan,
Lebanon, Morocco, Syria, Tunisia and the Occupied Palestinian Territories), following a
common questionnaire, of the migration trends in the AMCs, with particular emphasis on key
labour market factors such as demographics, labour costs, skills composition, effectiveness
and efficiency of current employment policies, recent labour market reforms, contractual
arrangements and size of the informal sector.
2 thematic background papers on “EU Migration Policy towards AMCs and its Impact
on their Labour Markets” and “The Impact of Migration on AMC Labour Markets: A
Bibliographical Review”.
Activities
The Study was carried out between January and October 2009. The main activities were the following:
■ Methodological Workshop. Florence, 28 January 2009. A one-day co-ordination workshop
focused on methodology and data issues for the National Background Papers.
■ Validation Workshop. Montecatini Terme, 26-27 March 2009. A two-day workshop to discuss
and validate National and Thematic Background Papers and to undertake a regional
comparative analysis of labour markets performance and migration flows in AMCs.
■ Policy-Makers and Experts Conference on “Labour Markets and Migration Flows in Arab
Mediterranean Countries”. Cairo, 11-12 October 2009. Jointly organised by the EUI, Cairo
University and the European Commission. A two-day conference for policy makers, labour
market specialists and experts on migration issues from the EU and the AMCs to present and
discuss the final Study and proposals and recommendations to improve the design of the EU’s
migration policies towards AMCs and policy options available to them for the management of
mismatches between labour supply and demand.

For more information on the Study
www.eui.eu/DepartmentsAndCentres/RobertSchumanCentre/Research/Migration/LabourMarketsMigration/Index.aspx

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Table of Contents
LABOUR MARKETS PERFORMANCE AND MIGRATION FLOWS IN ARAB MEDITERRANEAN
COUNTRIES: DETERMINANTS AND EFFECTS.......................................................................................... 3
TEAM OF EXPERTS FOR THE STUDY...........................................................................................................3
BACKGROUND PAPERS................................................................................................................................... 4
ACTIVITIES ......................................................................................................................................................... 4
CHAPTER I – FINAL REPORT LABOUR MARKETS PERFORMANCE AND MIGRATION
FLOWS IN ARAB MEDITERRANEAN COUNTRIES: A REGIONAL PERSPECTIVE ....................... 11
EXECUTIVE SUMMARY................................................................................................................................. 12
THE CHALLENGES OF EMPLOYMENT..................................................................................................... 12
EMPLOYMENT POLICIES ............................................................................................................................. 15
MIGRATION AND LABOUR MARKETS ..................................................................................................... 16
PROPOSALS FOR ACTION AND POLICY RECOMMENDATIONS FROM THE STUDY............................ 20
INTRODUCTION............................................................................................................................................... 24
Literature ..................................................................................................................................................... 24
1.1 DEMOGRAPHIC DYNAMICS AND PROSPECTS ....................................................................................28
1.2 CHARACTERISTICS AND COMPOSITION OF THE LABOUR FORCE AND EMPLOYMENT .....................29
1.3 ESTIMATION OF JOB CREATION NEEDS UNTIL 2020.........................................................................34
2. THE LABOUR MARKETS PERFORMANCE IN AMCS......................................................................... 36
2.1 LABOUR MARKET AND EMPLOYMENT IN AMCS: A REVIEW OF INTERNATIONAL REPORTS .........36
2.2 REGULATION OF LABOUR MARKETS IN AMCS ................................................................................38
2.3 INCREASING WAGE AND INCOME DIFFERENTIALS ...........................................................................40
2.4 UNEMPLOYMENT SITUATION AND TRENDS IN AMCS: EXCLUDING YOUTH AND FEMALE
WORKERS .................................................................................................................................................43
2.5 INFORMAL EMPLOYMENT ..................................................................................................................47
2.6 INWARD MIGRATION IN AMC LABOUR MARKETS...........................................................................48
2.7 THE IMPACT OF THE ECONOMIC CRISIS.............................................................................................50
3. NATIONAL EMPLOYMENT POLICIES AND LABOUR MARKETS REFORM IN AMCS ............. 52
3.1 ACTIVE LABOUR MARKET POLICIES .................................................................................................53
3.2 RECENT CHANGES IN LABOUR MARKET LEGISLATION AND REFORM PROJECTS ...........................54
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3.3 ALTERNATIVE STRATEGIES AND POLICY OPTIONS FOR MANAGING LABOUR MARKETS
MISMATCHES............................................................................................................................................55
4. OUTWARD LABOUR MIGRATION IN ARAB MEDITERRANEAN COUNTRIES........................... 56
4.1 OUTWARD LABOUR MIGRATION IN AMCS: LITERATURE REVIEW .................................................56
4.2 OUTWARD MIGRATION FLOWS: EXTENT AND CHARACTERISTICS ..................................................58
Temporary Migration of Public Employees in Egypt................................................................................. 65
5. ELEMENTS FOR ANALYZING THE IMPACT OF MIGRATION FLOWS ON NATIONAL
LABOUR MARKETS ........................................................................................................................................ 66
5.1 EFFECTS OF OUTWARD MIGRATION ON LABOUR MARKETS IN AMCS: LITERATURE REVIEW......67
5.2 DOES MIGRATION CAUSE BRAIN DRAIN IN AMCS? ........................................................................69
5.3 REMITTANCES AND THE PROSPECTS TO MIGRATE............................................................................73
5.4 IMPACT ON INFORMAL EMPLOYMENT...............................................................................................79
5.5 IMPACT OF RETURN MIGRATION .......................................................................................................79
6. EU MIGRATION POLICIES AND ARAB MEDITERRANEAN COUNTRIES .................................... 81
6.1 THE EMERGENCE OF AN EU MIGRATION POLICY AND THE CONSIDERATION OF LABOUR NEEDS.82
6.2 THE GLOBAL APPROACH TO MIGRATION AND ECONOMIC IMMIGRATION SINCE 2005: AN
INTEGRATIVE OR PARTIAL PROCESS?......................................................................................................83
6.3 HIGHLY-SKILLED MIGRATION AND THE BLUE CARD IN THE EURO-MEDITERRANEAN CONTEXT.86
6.3.1. EU and AMC Skill Profiles: What Scope for a Supply and Demand Match in the Mediterranean?
...................................................................................................................................................................... 86
6.3.2. General Factors Attracting Highly-Skilled Migrants....................................................................... 89
6.3.3. The Blue Card as a Scheme for Highly-Skilled Migration in the Euro-Arab Mediterranean
Context......................................................................................................................................................... 90
6.4. THE EURO-MEDITERRANEAN PARTNERSHIP AND THE EUROPEAN NEIGHBORHOOD POLICY:
ADEQUATE TOOLS FOR AN EXTERNAL MIGRATION POLICY?................................................................92
7. PROPOSALS FOR ACTION AND POLICY RECOMMENDATIONS................................................... 97
7.1. DATA AND RESEARCH GAPS ON LABOUR MARKETS AND MIGRATION IN AMCS..........................97
7.2. A RESEARCH AGENDA FOR LABOUR MARKETS AND MIGRATION IN AMCS .................................97
7.3. AMC ECONOMIC AND SOCIAL POLICIES..........................................................................................98
7.4. EU MIGRATION POLICIES..................................................................................................................99
7.5 EU-ARAB MEDITERRANEAN COUNTRIES COOPERATION ..............................................................100
BIBLIOGRAPHIC REFERENCES................................................................................................................ 102
CHAPTER II
– THEMATIC BACKGROUND PAPER THE IMPACT OF MIGRATION ON
LABOUR MARKETS IN ARAB MEDITERRANEAN COUNTRIES: A BIBLIOGRAPHICAL REVIEW
.............................................................................................................................................. 111

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HIGHLIGHTS .................................................................................................................................................. 111
INTRODUCTION............................................................................................................................................. 113
PART I- REVIEW OF THE THEORETICAL ARGUMENTS ................................................................... 114
SUPPLY SIDE OF THE LABOUR MARKET .............................................................................................. 114
1. LABOUR FORCE - ENDOWMENTS........................................................................................................114
1.1 Actual migration.................................................................................................................................. 115
1.2 Prospect to migrate.............................................................................................................................. 115
1.3 Return migration ................................................................................................................................. 117
1.4 Remittances.......................................................................................................................................... 117
1.5 Social remittances................................................................................................................................ 118
2. BEHAVIOR IN THE LABOUR MARKET..................................................................................................118
2.1 Actual migration.................................................................................................................................. 118
2.3 Prospect to migrate.............................................................................................................................. 118
2.3 Remittances.......................................................................................................................................... 118
2.4 Social remittances................................................................................................................................ 119
DEMAND SIDE OF THE LABOUR MARKET..................................................................................................119
3. CONSUMPTION PATTERNS ..................................................................................................................119
3.1 Actual migration.................................................................................................................................. 119
3.2 Return migrants................................................................................................................................... 120
3.3 Remittances.......................................................................................................................................... 120
3.4 Social remittances................................................................................................................................ 121
4. INVESTMENTS AND ENTREPRENEURIAL MODELS..............................................................................121
4.1 Remittances.......................................................................................................................................... 121
4.2 Return migrants................................................................................................................................... 122
4.3 Social remittances................................................................................................................................ 122
PART II - EMPIRICAL EVIDENCE ............................................................................................................. 122
5. SALIENT FEATURES OF MIGRATION OUT OF THE ARAB MEDITERRANEAN COUNTRIES ..................123
SUPPLY SIDE OF THE LABOUR MARKET .............................................................................................. 127
6. LABOUR FORCE - ENDOWMENTS........................................................................................................127
6.1 Actual migration and labour force ..................................................................................................... 127
6.2 Prospect to migrate and labour force.................................................................................................. 132
6.3 Return migration and labour force..................................................................................................... 134
6.4 Remittances and labour force ............................................................................................................. 135
6.5 Social remittances and labour force ................................................................................................... 136
7. BEHAVIOUR ON THE LABOUR MARKET..............................................................................................136
7.1 Actual migration and behaviour ......................................................................................................... 136
7.2 Prospect to migrate and behavior ....................................................................................................... 137
7.3 Remittances and behavior ................................................................................................................... 137
7.4 Social remittances and behaviour....................................................................................................... 138
DEMAND SIDE OF THE LABOUR MARKET............................................................................................ 139
8. CONSUMPTION PATTERNS ..................................................................................................................139
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8.1 Actual migration and consumption patterns ...................................................................................... 139
8.2 Return migrants and consumption patterns. ...................................................................................... 139
8.3 Remittances and consumption patterns .............................................................................................. 140
8.4 Social remittances and consumption pattern...................................................................................... 142
9. INVESTMENTS AND ENTREPRENEURIAL MODELS..............................................................................142
9.1 Remittances and investments .............................................................................................................. 142
9.2 Return migrants and investments ....................................................................................................... 144
9.3 Social remittances and investments .................................................................................................... 145
10. CONCLUSIONS ......................................................................................................................................... 146
REFERENCES.................................................................................................................................................. 149
CHAPTER III – THEMATIC BACKGROUND PAPER EU MIGRATION POLICY TOWARDS
ARAB MEDITERRANEAN COUNTRIES AND ITS IMPACT ON THEIR LABOUR MARKETS..... 159
INTRODUCTION............................................................................................................................................. 163
1. EU MIGRATION POLICY - HOW HAVE LABOUR POLICY CONSIDERATIONS EMERGED? 165
1.1 THE GENERAL CONTEXT...................................................................................................................165
1.2 THE DEVELOPMENT OF A LABOUR MIGRATION STRATEGY IN THE FRAMEWORK OF THE EU
COMMON MIGRATION POLICY (1992-2005)...........................................................................................166
1.3 THE INTERCONNECTEDNESS BETWEEN THE GLOBAL APPROACH TO MIGRATION AND ECONOMIC
IMMIGRATION SINCE 2005: AN INTEGRATIVE OR PARTIAL PROCESS? ..................................................169
2. INSTRUMENTS FOR IMPLEMENTING GLOBAL APPROACH ....................................................... 173
2.1 HIGHLY-SKILLED MIGRATION AND THE BLUE CARD IN THE EURO-ARAB MEDITERRANEAN
CONTEXT.................................................................................................................................................173
2.1.1 Skill level of migrants and their location......................................................................................... 174
2.1.2 Where do skilled AMC migrants go? ............................................................................................... 175
2.1.3 Factors attracting foreign skilled migrants ..................................................................................... 176
2.1.4 Supply and demand match in the Mediterranean ........................................................................... 177
2.1.5 The Blue Card: is it attractive enough to satisfy the need for highly-skilled immigration in the
Euro-Arab Mediterranean context? ......................................................................................................... 180
2.2 SEASONAL WORK, TEMPORARY AND CIRCULAR MIGRATION .........................................................181
2.2.1 Trends and dynamics of temporary movements .............................................................................. 182
2.2.2 Policy changes .................................................................................................................................. 184
2.3 INTEGRATION POLICIES OF PERMANENT MIGRANTS .......................................................................185
3. THE EURO-MEDITERRANEAN FRAMEWORK AND THE EUROPEAN NEIGHBORHOOD
POLICY: ADEQUATE TOOLS FOR AN EXTERNAL MIGRATION POLICY?................................... 186
3.1 THE BARCELONA PROCESS (1995-2005).........................................................................................187
3.1.1 The Euro-Med Partnership’s objectives .......................................................................................... 187
3.1.2 The Euro-Med Association agreements (EMAA) and Migration................................................... 189

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