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The main part of the analysis focuses on identifying the dynamic response of labour mobility to labour demand shocks that affect some countries only (asymmetric shocks).
Before exploring the contribution of labour mobility to labour market adjustment, it is useful to review some stylised facts on the dynamics of employment, unemployment and labour market participation across EU countries.
Compared with previous studies taking a cross-country perspective (e.g. L'Angevin 2007a, b), the availability of longer time series makes it possible to examine if the contribution of labour mobility to labour market adjustment for the typical country has changed over time, most notably after the 2008 2009 crisis.
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Since then, the government policy has loosened, moving from permitting rural labour mobility, to guiding rural labour mobility and then encouraging rural labour mobility.
More than the rest of Europe the single-currency area needs greater labour mobility to make adjustment to economic shocks less harsh.
In a BBC interview in June 2013, she argued that Europe needed more labour mobility to tackle unemployment, with more young people seeking jobs in other EU countries.
In a BBC interview in June 2013 she said Europe needed more labour mobility to tackle unemployment, with more young people seeking jobs in other EU countries.
Section 3 presents a number of stylised facts of mobility in the EU to serve as context for the main analysis, in Section 4, which assesses the dynamic response of labour mobility to country-specific economic shocks.
Several years have passed since the outburst of the financial crisis, and there is growing attention to the potential contribution of labour mobility to counteract the divergence in growth and unemployment among EU countries and particularly within the euro area.
Overall, the findings of this paper suggest that, although the magnitude of mobility flows in the EU remains below what could be expected in a fully integrated monetary union, the responsiveness of labour mobility to asymmetric demand shocks has increased over time.
There are clear practical impediments to labour mobility within the euro area including language and culture.
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