Citizens' europe

• Author: Directorate-General for Parliamentary Research Services (European Parliament)
• Pages: 152-178

EPRS | European Parliamentary Research Service

152

CITIZENS’ EUROPE

30. Free movement of economically-active EU citizens

Potential efficiency gain: €53 billion per year

Key proposition

The free movement of EU citizens is a fundamental right enshrined in the Treaties. Citizens have the

right to look for a job in another EU country, live in that country and access its labour market. They

have to pay taxes and contribute to social security, but enjoy the same rights as nationals.672 The

share of EU citizens of working age (20-64) residing in another EU Member States has increased from

2007 to 2017 (2.5 % to 3.8 %). Still, this level of mobility is relatively low, compared for example with

the United States673 another integrated continental economy, usually more than 10 % of citizens

moves between states each year.674 It suggests there is still potential for significantly greater

mobility in the EU, which could generate up to additional €53 billion after a full phasing-in.

More detailed analysis of potential benefits

Free movement is not only influenced by the differences in wages and GDP, but also by distance,

unemployment rates, educational levels, traditional links, common/similar languages, or the

established community675 and remaining obstacles676 in the destination countries. The free

movement of workers may have an impact on, among other things, employment, education level,

remittances, wages and productivity, popul ation structure and public finance.

1. Employment: The employment rate of mobile EU citizens has increased over time and it is, at the

time of writing, higher than that of the entire active EU population: 76.1 %, compared to the total

EU employment rate of 72.1 %.677 Since 2010,678 total employment in EU-28 ha s increased by

12.3 million and the share of EU-28 movers in this increase was 3 million or around 25 %. Total

672 After each of the most recent enlargements, the right to work was temporarily restricted up to seven years, and only

granted ´stepwise` to new Member States. For more information on the transitional arrangements for new Member

States, see European Commission website.

673 However, one must keep three main differences in mind: the United States is one country, which has one common

language and has one public employment service. The EU 28 has 24 different official languages and 28 different public

employment services.

674 World Bank, Internal mobility: The United States, in Golden Growth 2012. In 2010, 10 % of Americans moved to a

different state, in one single year. The largest flows of labour were between neighbouring federal states.

675 European Commission, Labour mobility and labour market adjustment in the EU, December 2014 p. 14.

676 European Parliament, Obstacles to the right of free movement and residence for EU citizens and their families, 2016.

677 Eurostat statistics explained, EU citizens living in another Member State - statistical overview, April 2018.

678 Three forms of intra-EU labour mobility can be identified: long-term labour mobility (working and residing in another

Member State); cross-border mobility (living in one Member State and working in another Member State); and the

posting of workers.

Europe’s two trillion euro dividend: Mapping the Cost of Non-Europe, 2019-24

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employment increased in nearly all the main sending and destination countries, with the exception

of Romania and Croatia. Employment rates increased in all these countries.

2. Unemployment: From September 2010 to September 2018, the unemployment rate decreased

from 9.6 % to 6.7 % in the EU-28. Eurostat estimates that 6.3 million fewer men and women were

unemployed in 2018, compared with 2010. The biggest falls in unemployment rates were reported

for the Czech Republic (-69 %), Estonia, Latvia and Lithuania (-63 %), Hungary (-67 %), Ireland (-63 %),

Poland (-61 %), Slovakia (-56 %), Bulgaria (-51 %), Germany (-51 %), and the United Kingdom (-47 %).

Both in the main sending countries, and in the main destination countries, the decrease of

unemployment was well above the European average of -30 %.

Figure 13: Unemployment rates in the EU- 28 (2010-18)

Source: Eurostat and author’s own calculations.

3. Education: People with tertiary-level education are more mobile than the rest of the population;

32.4 % of all mobile EU citizens have tertiary education.679 It appears that recent EU-28 movers are

even better qualified and have a medium or high level of education (each 40 %).680

4. Workers' remittances: Almost €2 in every €3 remitted across borders remains within the EU-28,681

so inflows in personal remittances predominantly go to and come from EU Member States.

Dependency rates on international remittances are measured by the share of inf‌lows in personal

remittances as a percentage of the country’s GDP. In 2017, the highest dependency rates on

remittances in the EU-28 were observed in Latvia (4.1 % of GDP) and Croatia (4.5 % of GDP).682

4. Wages and labour productivity: The incentives for greater labour mobility in Europe are high.

In particular, when looking at gross hourly dispersion ratios, Germany and UK, for instance, have an

average gross hourly salary of €15.7 and €14.8 respectively, which are well ahead of countries such

as Slovenia (€7.3), the Czech Republic (€4.6), Slovakia (€4.4), Poland (€4.3), Hungary (€3.6), and

679 Eurostat, 4 % of EU citizens of working age live in another EU Member State, 28 May 2018.

680 European Commission, 2017 annual report on intra-EU labour mobility, Second edition September 2018.

681 Eurostat, Personal remittances statistics, Statistics explained, November 2018, planned update November 2019.

682 Even higher in Kosovo (15.3 % of GDP), Albania (10.0 %), Montenegro (10.7 %), and Serbia (8.6 %).

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Czechia

Germany

Malta

Hungary

Netherlands

Poland

Romania

UK

Denmark

Austria

Bulgaria

Luxembourg

Slovenia

Belgium

Ireland

Estonia

Slovakia

Sweden

Lithuania

Portugal

EU 28

Latvia

Finland

Croatia

Cyprus

France

Italy

Spain

Greece

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