Demographic projections for the EU27 point unequivocally to a growing shortage of young graduates, which will become increasingly pronounced as the decade continues. In theory, selective immigration could fill part of the corresponding labour needs. However, against the prospect of developing selective immigration based on the level of education, it is important to note that the distribution of immigrants by level of education does not appear very favourable, since there is still very heavy overrepresentation of the lowest level of education. In addition, the ability of immigration to help manage demographic challenges depends more on the architecture of the host countries, in terms of integration and non-discriminatory deployment, than on the characteristics of the immigrants themselves.

The decline in the working-age population in Europe will place its welfare system under strain unless it can maintain the growth of the pre-crisis decade (1999-2008). Increases in labour force participation rates and increases in productivity are both necessary. This chapter looks at some of the impacts of different labour-supply development scenarios on Europe’s economic growth paths and the productivity yields necessary to achieve those scenarios, in line with the Europe 2020 commitments. Potential contributors to better employment performance are examined, including regional development, mobility and migration policies, and progress in education. Single policy strands – such as activation measures, more open migration and structural policy – will not be sufficient to meet growth objectives, and a longer time horizon is necessary as new challenges will arise beyond 2020.

This chapter addresses future labour market needs in new European Union member countries, viewed through the prism of recent and projected demographic, educational and migration developments. A comparison is made between developments in the new member states (NMS or EU12) and in the old member states (OMS or EU15). As the demography-education-migration nexus is too complex an issue to be discussed in detail here, the focus is on aggregate trends rather than microeconomic issues. Data used for analysis throughout are secondary, drawn from public EU and OECD databases, with migration and no migration options developed by Eurostat and migration statistics by the OECD. Findings are supplemented by the results of several ad hoc case studies and observations from new member states on general patterns at the national level.