Labour Force Dynamics in the EU: The Role of Child Penalties and Migrants’ Return

Marek Endrich , Joint Research Centre, European Commission
Guillaume Marois, International Institute for Applied Systems Analysis
Fabrizio Natale, European Commission Joint Research Centre
Christoph Deuster, European Commission - Joint Research Centre

In this project we conduct a projection exercise for the labour force in the 27 EU member states while explicitly accounting for the so-called ‘child penalty’ and return rates of migrants. Based on a dynamic microsimulation (QuantMig-Mic, Marois et al., 2023), we jointly model demographic, educational, and labour force dynamics at the individual level and explore country-specific projections of labour supply. We add to the simulation, firstly, the incidence of having a first child and its effect on the labour force participation of parents, differentiating by education and by the age at first birth. Secondly, we include parameters on return migration rates of recent migrants, by region of origin and duration of stay. These extensions allow us to model the effects of changes in the child penalty or return rates on labour force projections and provide comparisons on the effectiveness of policies intended to increase the size of the labour force.

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 Presented in Session 12. Migration, Human Capital and Labour Markets