Integrating Migrants in Europe: Five Minutes with Dr. Stefano Scarpetta

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Dr. Stefano Scarpetta, OECD Director of Employment, Labor, and Social Affairs

Following the panel discussion Migration: From Humanitarian Crises to New Opportunities hosted by the Georgetown University Italian Research Institute in collaboration with the Embassy of Italy & Italian Cultural Institute, the Georgetown Journal of International Affairs sat down with OECD Director of Employment, Labor, and Social Affairs Dr. Stefano Scarpetta to discuss both the challenges and opportunities presented by the integration of migrants in Europe.

GJIA: Will the European migrant crisis have a positive or negative macroeconomic impact in the long term?

SS: The OECD has done a lot of work with that issue from both a financial and economic point of view. The evidence clearly suggests that in the long run, the fiscal impact of migration is positive overall; however, in countries with higher migration flows, it can be slightly negative. Some of the preconceived notions that migration is a big burden for national governments is not really grounded in the data. This is because many migrants in advanced economies work and therefore are contributing to taxation and social security systems.

In some circumstances, these migrants work even more than the native-born citizens. Furthermore, in countries that are aging rapidly, migration plays an important role. Because the migrant population is generally younger than the native population, there are fewer people actually benefiting from and relying on pensions. From 2000-2012, 65 percent of the workforce in Europe was foreign-born, playing an essential role in contributing to economic growth.

GJIA: What are the biggest challenges migrants face regarding employment today?

SS: Those challenges depend on the characteristics of the migrants themselves. In most countries, there are high-skilled migrants for whom the integration into the labor market tends to be fairly easy. While many of the low-skilled migrants still find jobs relatively quickly, for high-skilled migrants or those with intermediate level skills, the problem rests with recognizing their specific qualifications. Lots of these high-skilled migrants have studied abroad and may have qualifications that are not recognized in the host countries.

Therefore, one of the big challenges is not only giving them the opportunity to work, but also trying to reduce skill mismatch and avoid employing over-qualified workers for lower-skilled positions. This has been done in various. A number of countries have introduced systems that specifically recognize foreign qualifications, while others have provided migrants with tests to assess their skill level. For children and young adults, who make up the majority of the migrant population, access to schooling is key to integrating them into the labor market.

GJIA: What are both short-term and long-term policy prospects for governments to address these challenges?

SS: There is always a tension between the short-term and the long-term issues, especially today when we face this unprecedented humanitarian crisis. For most of the European governments in both advanced economies and emerging economies that neighbor Syria and Iraq, the short-term question is how to handle this large number of people who are fleeing their own countries in search of safety. This would imply, of course, significant upfront costs for the receiving countries to provide immediate support for these asylum seekers and refugees. Despite these short-term costs, if the migrants stay and are protected by these governments, they will also eventually integrate into the labor market where they would be a valuable asset in rapidly aging economies.

GJIA: The recent elections in Germany indicated a rise of far-right national political parties. What can governments, like Germany, do to address the public’s fear of the migrant crisis and instead emphasize the potential benefits?

SS: The numbers of refugees can seem large and overwhelming to some communities. However, governments can start with we are doing today: publicizing the facts. They can also act, both domestically and in conjunction with other countries, to provide a bold, coherent, and comprehensive response to the humanitarian crisis. This is not a crisis that can be ignored; these people are fleeing conflict, violence, and risk of death. The international and domestic response should include providing the adequate resources to help them. It is also important to make sure that migrants and refugees will not just be placed in remote areas where short-term housing is most readily available, but where jobs actually are. Otherwise, this tends to aggravate the situation of remote communities that are already stretching in terms of the level of employment. Furthermore, we need to make sure children go to school, and adults can have access to language courses to promote societal integration as well.

GJIA: How substantial of an impact do culture and language barriers have on migrant’s integration into the labor force, and what are the most effective ways of addressing that?

SS: It greatly depends on the country of origin and the language they speak. Firstly, providing minimum basic language courses is arguably not too difficult, and many migrants are very willing to learn the local language. Secondly, countries could follow the Swedish model where high-skilled migrants are directly integrated into the workforce. In Sweden, there are two fast tracks, one for doctors and one for teachers whereby these workers are immediately given a job opportunity. While they are working in the hospitals and schools, the migrants work in collaboration with the local teachers who provide them with basic language courses. It is important to ensure that programs are built to suit the specific needs of the asylum seekers and the refugees, which is not an easy task.

GJIA: What is the largest negative consequence of the current migrant crisis?

SS: The biggest negative is that there is no cohesive policy. Today, European countries are going one step forward, one step backward. This creates a lot of tension among the public which then can be brought to force where, if any unfortunate incident occurs, such as the one in Cologne on New Year’s Eve, it is perceived as “this is what the migrants will do to your country.” Of course, this was an extremely negative episode, but it was an isolated episode. Many migrants come to Europe because they not only want to work, but also to be in a more secure environment. Of course, it is important to contain all the potential risks migration may bring, but on the other hand, integration is the best solution. Furthermore, when there is a cacophonic approach at both the national and international level, like when countries are pursuing different policy agendas or pretend to close their own borders, the migrants will continue to go to the next country. It is important that governments try to promote the best common dialogue and response.

GJIA: What is the most effective way to convince governments, especially those that are most reluctant, to accept refugees?

SS: For a country like the United States with many millions of immigrants, accepting 10,000 or even 20,000 might be a relatively easy problem. However, for a country like Hungary that has no traditional natural immigration, simply dealing with two thousand, and in reality there are many more than that, may be a bit overwhelming. Instead of simply saying, “Well, Hungary should do more,” Hungary should be helped in coping with it because it lacks infrastructure in certain places. Europe has made 9 billion euros available towards helping refugees, many of which, with good reason, go to Turkey. Some support, however, should also be given to European countries that otherwise would not be able to cope with large number of migrants. Again, small numbers may seem big if there is not already the underlying infrastructure in place to support them.

GJIA: What do you think is the best way to encourage governments to accelerate their migrant acceptance programs from the current level to the ideal level?

SS: The real question is, then, is what is the ideal level? In Europe and in Turkey, governments are not able to control the flows. While there can be attempts to reduce tensions in Syria and Iraq along with the causes that lead people to flee their country, the problem is that these numbers of migrants are not determined by any specific national or international policy. Therefore, governments are forced to deal with these staggering numbers, and the best way to do it is to continue having them at the European level. Relocation should be determined by an assessment of how much a country can take by looking at their resources. Providing support to countries, like Greece, for example, who cannot handle the situation by themselves is much more important than blaming them. Collaboration is the big word here.

GJIA: Lastly, what might you say to the native populations in Europe whose jobs are being either displaced by migrants or who generally oppose migration?

SS: First, it is not really true that native jobs are being displaced. The data demonstrates that 65 percent of the increase in the workforce has been by foreign-born workers, and these workers are doing the majority of low-skilled labor. They are not taking away the natives’ jobs, but instead are doing many of the jobs that the natives would prefer not to do. Of course, some of the high-skilled migrants will be competing with the native-born workers, but again, many of the countries in Western Europe are aging very rapidly. While there may be an issue today, in five years time we might be in dire need of these high-skilled migrants. In the short term, there is a cost that we should not underestimate, but there is also major long-term, and even medium-term, potential.

Mr. Scarpetta joined the OECD in 1991 and held several positions in the Economics Department and in his current Directorate. He led several large-scale research projects, including: “Implementing the OECD Jobs Strategy”; the “Sources of Economic Growth in OECD Countries”; and contributed to others including “The Policy Challenges of Population Ageing” and “The Effects of Product Market Competition on Productivity and Labour Market Outcomes.” From 2002 to 2006 he worked at the World Bank and coordinated a Bank-wide research program of Employment and Development and contributed extensively to the Bank’s investment climate assessments. He returned to the Economics Department of the OECD in November 2006 where he became the head of the Country Studies Division in charge of Japan, Korea, China, India, Mexico, Portugal, Denmark, and Sweden. From March 2008 to June 2010, he was the editor of the OECD Employment Outlook and the Head of the Employment Analysis and Policy Division of the Directorate of Employment, Labour and Social Affairs (DELSA). He became the Deputy Director of DELSA in June 2010 and in May 2013 he became Director.

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