Investigating the role of migration for changes in Europe labour supply in 2009-2019

The slowdown in population growth and the ageing of the population are significant challenges for Europe in terms of the overall labour supply. This dissertation assesses the contribution of migration in the overall labour supply of the United Kingdom, Spain, Austria and the Netherlands, using the Labour Force Survey data from the Eurostat database for the period of 2009-2019 and focusing on two aspects of the labour supply. Firstly, the overall size of the labour force and secondly the tendency of people within working-age to participate in the labour market, as it counts from participation rates. These two aspects are interrelated and are both affected by population ageing and demographic stagnation. Furthermore, a differentiation occurred between EU-born and Third country national migrants so their contribution could be assessed separately. This paper also examined, the impact of the labour market participation upward trend of women and people aged 55-65 to the overall labour force. The findings show the leading role of migration in the increase in labour force that is mostly due to the population rather than the participation effect. The participation rates of native women have significantly increased; however, the effect of that increase in the overall labour force has been weakened by the reduction of their population in working-age. An increase has also been detected in the participation rates of native people aged 55-64 which attributed to the increase of age limits in pension systems and policies to reduce early retirement. That increase combined with an upward trend in their working-age population has been attributed to baby boomers. However, as cohorts of baby boomers exit the labour force the next decades, their population will be reduced, and their contribution to the growth of the labour force will decrease as well. As natives fail to contribute to the growth of the labour force due to population in working-age decreasing, migration flows remain the only solution to release the pressure from population ageing that will be more acute over the next decades.