Publication detail

Migration, European Social Models and social security systems: Lessons learned from Great Depression for the current financial crisis

Author(s): PhDr. Mgr. Jana Gutiérrez Chvalkovská ,
prof. Ing. Michal Mejstřík CSc.,
Type: Article in collection
Year: 2009
Number: 0
ISSN / ISBN:
Published in: Potential of Migrant Workers on the Labour Market electronic proceedings
Publishing place: Prague
Keywords: labor market, intra-EU migration, Great Depression, financial crisis
JEL codes:
Suggested Citation: Chvalkovská, J. – Mejstřík, M.” Migration, European Social Models and social security systems: Lessons learned from Great Depression for the current financial crisis”, in Conference on Strengthening EU Competitiveness – Potential of Migrant Workers on the Labour Market electronic proceedings, February 26, 2009, Prague
Grants: IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: The ongoing global financial crisis will be a proof of life not only for the financial sector and capital markets, but also for European social models within individual countries and the EU single markets of labor, capital and goods. Large shocks on capital markets make their way to the goods, capital and labor markets, deep structural changes and therefore often result in growth of both structural and long-term unemployment and greater migration of workers. Growing unemployment and migration signify larger burden both for labor market “flexicurity” and especially for social security and pension systems – from this point of view can thus financial crises be described as stress-testers of the efficiency and stability of these systems under critical conditions. Regulators may from the development of unemployment and migration and from the consequent reactions of the social security system obtain important information about the adequacy and effectiveness of the existing modifications of European Social Models (including flexibility of labor market responding to rapid structural changes), of social security regulation and derive ideas for its improvement. Furthermore, we argue that there are important lessons learned from the successes and failures of social and labor policies adopted as consequence of the Great Depression that can be applied by both EU and national regulators on the current situation.
The first hypothesis is that during and after the current global financial crisis the EU and all Member States shall exercise increased efforts to closely coordinate (not harmonize !) changes in national social security systems and also in other public expenditures in order to prevent increase of disparities among Member States that might cause excessive economic migration and consequent adoption of protectionist measures by Member States.
The second hypothesis of lesson to be learned – from this point of view it is even more important to promote the second and third pillar of pension system – private savings and regain back the trust of general public, such system will be also less vulnerable to migration – that will happen due to disparities between Member States in the flexibility of labor market, support to unemployed, government spendings and etc. enabling the necessary rapid structural changes.

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