The European Commission and the OECD have carried out a joint project over three years on “Matching economic migration with labour market needs”. The key questions behind this project are as follows: What policies and practices are needed to ensure that migration and free movement contribute to meeting the labour market shortages that are expected to arise over the short-to-medium term? How can we make a better use of migrants’ skills? What are the lessons learnt from non-European OECD countries, particularly in the management of labour migration?

How can governments ensure that migration and free movement of workers contribute to meeting the labour market shortages that are expected to arise over the next 50 years? How can societies better use the skills of their migrants? What lessons can non- European OECD countries offer Europe, particularly regarding labour migration management? It was to address such questions that the European Commission and the OECD jointly carried out a three-year research project on “Matching economic migration with labour market needs”. Its findings are presented in this report.

This year marks a turning point for the European labour market in many ways. Firstly, after many years of debate about the expected effects of population ageing on the European labour markets and welfare systems, in 2014 for the first time the working age population (15-64) of the European Union starts declining. Over the next twenty years, according to the most recent Europop projections, it will decrease by about 21.7 million persons, or 6.5% in the EU28. This will potentially generate a decline in the labour supply and potential economic growth, unless European countries manage to mobilise under-utilised labour resources as well as promote faster technological progress and productivity growth. But immigration will need to play a supporting role as well.