EUROPEAN COMMISSION
Employment, Social Affairs and Equal Opportunities DG
Employment, Lisbon Strategy, International Affairs
The Director
EMCO/12/160209/EN
SKILLS AND MOBILITY
COMMISSION BACKGROUND AND DISCUSSION NOTE
1. The issue
Skills and mobility are two key elements of the European Employment Strategy which
are critically important for Europe, be it in terms of economic growth, adaptation to
change, equity and social cohesion.
The freedom of movement of workers is one of the four fundamental freedoms of the
European Union1, along with the free movement of goods, services and capital.
Moreover, labour mobility between Member States is an important policy element as it
contributes to the overall labour mobility which features prominently in the European
Employment Guidelines: in particular integrated guideline 20 on the improved matching
of labour market needs and guideline 21 on promoting flexibility combined with
employment security and reduced labour market segmentation. Moreover, labour
mobility is very much linked to flexicurity as it contributes to creating job opportunities
and to adapting the economy to rapid changes, with flexible and reliable contractual
arrangements and smooth and secure transitions being an integral part of the flexicurity
concept. Likewise, better education and skills are at the heart of the integrated guidelines'
aim for more effective investments in human capital and the comprehensive lifelong
learning element of flexicurity.
Mobility can be an instrument to address existing skill or labour market shortages and
skills mismatches2 in a country or region, thus improving the efficiency of labour markets
as well as of the internal market and removing brakes on economic growth. Having the
right skills and/or adequate education, on the other hand, can help an individual to move
quickly from school into a job, to climb the career ladder, to find a new job after getting
laid off or to enter into a more promising occupation.
While skills and mobility can each be seen as policy issues in their own right, they
are often linked with each other as they allow workers to adapt more effectively to
changes on the labour market and to take advantage of more job opportunities.
This means that labour mobility can both produce new skills and result from
greater skills. Therefore the correlation between skills and mobility is all about
sustainable job creation.
1
2
Treaty Article 39
Skills mismatches = skills acquired versus skills required
1
The purpose of this note is to provide some analytical background information on the
correlations between skills and mobility and to draw policy oriented and operational
conclusions. Without pretending to examine all of the relevant aspects, this note tries to
presents a brief typology of both skills and mobility, discusses the benefits and costs
of mobility and reflects on the role of Public Employment Services as key actors to
enhance labour market matching.. Most of the material presented here draws on recent
analysis undertaken or commissioned by DG Employment (see selected bibliography at
the end of the document) while echoing work conducted at Council level (forthcoming
Presidency conclusions on professional and geographical mobility).
2. Different forms of skills and mobility
SkillsOften, skills are defined through the field of study of a person and/or the highest
level of education attained through the educational system and vocational training. Yet,
while relatively easy to measure through existing statistics such as the Labour Force
Survey, academic skills are not the only ones relevant for a job.
In addition to formal academic skills, three broad areas of skill competences are
becoming increasingly relevant:
'Generic skills': such as problem solving, communication skills, and the ability to
work in teams. These skills are often transferable across work settings;
'Technical skills': these are specific skills needed in an occupation. These skills may
include references to academic skills or to knowledge of certain tools or processes.
'Work-related attitudes' or 'soft' skills: skills such as motivation, volition and
disposition. These skills are most often judged through personal impressions or
knowledge of an individual.
Mobility
Labour mobility is a wide term which is typically used to describe a change in the
labour market situation of a person or group of people. The literature often distinguishes
between 'geographic' labour mobility on the one side and 'job' or 'occupational' mobility
on the other. As shown in figure 1, job mobility can be divided into different categories.
In a narrow sense, job mobility consists in the simple change from one employer to
another ('job-to-job' mobility). Occupational mobility, on the other hand, could be
described as a change in a worker's job profile, content or career level and can happen
with or without a change in employer. Job mobility in a wider sense can also consist in
transitions between different labour market statuses, e.g. from unemployment or
inactivity into employment. A number of studies also distinguish between voluntary and
forced job transitions, in particular when assessing the costs and benefits of mobility.
Voluntary transitions, for example, would be the result of a decision process in which the
worker sees more advantages in changing the employer or leaving a job than staying on.
Forced or involuntary transitions are caused by the employer (e.g. redundancies), by
regulation or by health or age related factors.
2
Not necessarily, but often, job mobility goes hand in hand with a change in location, i.e.
geographic mobility. Geographic mobility can either imply a move from one region to
another within one and the same country or a move across national borders.3 Moreover, if
place of residence and place of work are not the same, geographic mobility takes the form
of regional or international commuting. In addition, durations of moves can vary. Many
statistics and studies define labour migration as a change of residence and workplace for
at least a year. However, short-term moves in the form of seasonal work, postings or
intra-company assignments are another and, according to some evidence, increasingly
frequent form of geographic mobility.
Figure 1: Types of labour mobility
Labour mobility
Geographic mobility
International
Job mobility
Job-to-job:
change
employer
Regional
Change
residence
of
Cross-border
commuting
Short-term
international
mobility
Seasonal workers
Posted workers
…
Change
residence
Regional
commuting
of
of
Occupational
Profile
Content
Career level
Transitions
between labour
market statuses
Empl. unempl.
Empl. inactive
Part/full-time
Temporary/
Permanent
Employee/
self-employed
…
Voluntary/forced
As far as geographic international mobility is concerned, it is important to note that it
remains relatively low:
3
In the EU policy context, geographic mobility is usually used to describe moves between Member States
while the term 'migration' is reserved for moves between EU and non-EU countries. However, the scientific
literature seldom makes this distinction and often uses the term (labour) migration to denote both moves
within and outside the EU.
3
- despite recent improvements, only around 2% of workers (employed and
unemployed) in the EU currently work and live in a Member State other than their
own.
- job to job mobility varies among Member States but is low in average. On average,
Europeans work at 3.9 places of employment over their career and the average
period of work at any one employer is 8.3 years4.
Whether in the case of involuntary or voluntary mobility, workers do face barriers in
making transitions from one labour market status to another. These barriers relate to
issues that need to be tackled at various levels: local, regional, national and EU wide. In
order to help removing obstacles at European level and to encourage the relevant
authorities and stakeholders to deal with the obstacles at national, regional or local level,
the European Commission launched in December 2007 a ''Job Mobility Action Plan for
2007-2010''5.
3. Links between job mobility and skills
Theoretical arguments and empirical evidence suggest that probably - and everything else
being equal - there is an inverse U-shaped relationship between overall job mobility
and economic growth, with very low levels as well as very high levels of job mobility
being detrimental to economic growth.
From a theoretical perspective, job mobility can contribute significantly to economic
growth and development. Job mobility is a key aspect of the efficient allocation of
productive resources. Without job mobility, ongoing restructuring and development of
enterprises is hampered and the reallocation of resources from declining industries to
growing industrial sectors is impeded. This may again have negative implications for
economic performance, and ultimately labour market performance. Conversely, job
mobility can contribute significantly to innovation, particularly in knowledge-intensive
sectors and when the mobility of knowledge workers is concerned, and there is solid
empirical evidence supporting this claim.
On the other hand, there are good arguments in support of the claim that high job
mobility rates are connected with considerable transaction costs and sunk costs at the
company level in the form of wasted investment in job-specific training. This may
discourage companies from investing in competence development.
There is, for example, empirical evidence that stable employment relationships and
relatively long job tenures are positively correlated with productivity. There is some
evidence that employing workers with 4-10 years of job tenure has the most beneficial
effect on productivity, just as there is evidence that employing workers with very short or
very long tenure will affect productivity negatively.
Box 1: Education and school to work transitions
4
5
Study on "Geographical mobility within the EU: optimising its economic and social benefits" April 2008
Mobility, an instrument for more and better jobs: The European Mobility Action Plan (2007-2010)
COM(2007)773 final
4
Education plays an important role in successful school-to-work transitions. On average,
less than 4 out of 10 school leavers with a low educational attainment level find
themselves in a job one year after having finished school, compared to almost two-thirds
of those with a medium level of education and more than three-quarters of those with a
high level of education (see chart). In other words, better-educated youth tend to make a
more speedy insertion into the job market than their less-educated peers.
Chart: Youth school-to-work transition by educational attainment in the EU-27 –
labour market status of non-students (age 15–24) one year after leaving school, 2006
Employed
Unemployed
Inactive
100%
75%
50%
25%
0%
Low educ.
Medium educ.
High educ.
Total
Source: Eurostat, EU LFS 2006 annual data (Ireland 2005 data)
Notes: Non-student school leavers defined as 15 to 24 years-old w ho have completed their education in the previous year.
Research also suggests that the dual systems of combining work and education through
vocational training or apprenticeships found in countries such as Austria, Denmark and
Germany seem to improve the transitions and employment prospects of young people.
Box 2: Lower education tends to increase chance of forced mobility
Research by the European Foundation in Dublin based on 2005 data from a Special
Eurobarometer on mobility suggests that lower levels of educational attainment are
associated with a greater likelihood of forced mobility. Respondents who finished their
formal education between ages of 16 and 19 are made redundant much more often than
those in other categories. By contrast, those with the highest level of education have the
lowest proportion of forced mobility. As the skills level of a job increases, so too does the
ratio of voluntary to forced mobility. Workers in the service sector have the highest
proportion of voluntary transitions (75%) and the lowest proportion of forced transitions
(27%). This contrasts with unskilled manual workers, who have slightly more forced
transitions (55%) than voluntary transitions (53%). Furthermore, health-related
transitions are more prevalent among manual than white-collar workers.
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4. Links between geographical mobility and skills
One of the key arguments in favour of (more) geographic mobility is that geographic
mobility serves as an equilibrating/adjusting factor between regional labour markets. To
the extent that mobility of capital and goods do not achieve convergence of employment
and real wages in open or integrated economies, mobility of labour may help balancing
labour market outcomes.
Another key argument is that enlarging the relevant labour market for individuals may
result in better skill matches. As a consequence, returns to human capital formation may
increase, which changes the incentives to invest in human capital. Improved skill matches
and accelerated human capital formation may foster economic growth across the
continent.
In general, imperfections in the information available in the labour market entail the
simultaneous presence of unemployed persons and unfilled job vacancies. This is the
origin of frictional unemployment. These imperfections are even more important when
vacant jobs are located in different regions or countries. To the extent that the skills
required by the vacant jobs differ from the skills available in the local labour market,
skills mismatch might arise. This skills mismatch will be persistent if neither workers nor
jobs are fully mobile.
Therefore, enhancing geographic mobility will lead to regional labour markets
adjustments and to a better match between the demand and supply of skills. If geographic
mobility enhances the quality of job matches, individuals can make a higher return on
their human capital. This increases incentives to invest in education.
Box 3: Educational attainment of mobile EU workers
In the context of the general migration and mobility debate, the issue of migrants' skill
levels plays an important role. In the sending countries, one particular concern is that too
much emigration, especially of high-skilled persons with tertiary education, could lead to
‘brain drain’ and labour shortages. In the receiving countries, in contrast, there are fears
that labour from abroad could substitute local workers and take away their jobs.
The chart below suggests that, overall, mobile workers from the new Member States
(EU-10/2) have made a positive contribution to the skill mix of the EU-15 labour
force. The share of university educated recent EU-10/2 movers appears to be only
moderately lower than among the EU-15 labour force. Moreover, the share of recent EU10/2 arrivals with a medium level education is higher than among the EU-15 labour
force, while the share of low-skilled recent arrivals from the EU-2 is not higher than that
of the EU-15 labour force, and substantially lower in the case of EU-10 movers.
However, comparing the proportion of medium and highly-skilled EU-10/2 workers to
the proportion of those working in intermediate and low-skilled jobs suggests that not all
of them are in employment commensurate with their skill levels (see also Box 3).
Chart: Educational attainment of mobile and total active population, 2007
6
EU-15
EU-10
EU-2
Low
mobile EU-2 citizens
Medium
29%
total EU-2 population
52%
20%
mobile EU-10 citizens
25%
69%
19%
31%
29%
0%
17%
60%
total EU-10 population 10%
total EU-15 population
19%
63%
15%
mobile EU-15 citizens
High
21%
50%
45%
25%
50%
26%
75%
100%
% of total
Source: Eurostat, EU LFS, annual data.
Note: Mobile EU citizens here defined as w orking age foreign nationals resident four years and less in another EU
Member State. Recently mobile resident in the UK excluded due to data problems.
The share of the highly-skilled among recent emigrants from the new Member States is
on average somewhat higher than among the total labour force of their home countries.
However, the percentage of medium-skilled recent movers tends to be lower than in the
overall labour force, while the share of low-skilled movers is relatively higher. In general,
these figures do not suggest a disproportionate loss of highly-skilled workers for the EU10/2 countries (see also Box 3).
Differing from the skill profile of the EU-10/2 mobile, the share of high-skilled workers
is much higher among recent EU-15 mobile workers. One likely reason for this is that
EU-15 movers tend to be on average significantly older than their counterparts from the
EU-10/2 and are therefore more likely to have attained tertiary education. Moreover,
other factors such as differences in the occupational and sectoral employment profile are
also likely explanations.
On the other hand, for a worker, the search for a job that fits his or her requirements and
skills is a process that takes time. Likewise, when a firm wants to recruit new workers, it
often chooses to devote substantial resources to the selection of suitable individuals.
Therefore, mobility entails costs which in most cases are irreversible. This implies that
excessive mobility could increase the cost of vacancy posting on the side of the firms, or
search costs on the side of the workers. However, most of these additional costs are borne
voluntarily by individual workers and firms.
Overall, it appears that the direct economic gains made by free circulation of human
capital are quite large. This impression emerges from different American, Canadian and
European simulation studies, and from the literature seeking to predict the potential
migration and welfare gains (or losses) associated with the EU enlargement. Factors
which make mobility more economically beneficial are complementarities on the labour
market, improved skill matching, and externalities through educational choices or human
capital formation. The fiscal effects of immigration in the long run are generally believed
to be positive, although in the shorter run much depends on the nature of the migration.
Open access to labour markets furthermore helps allocating the innovation and
entrepreneurial potential incorporated in individuals to the environment where they can
7
achieve the highest return. The impact of educated immigrants on technological and
scientific progress is likely to affect future growth rates of income per capita, as
innovation increases total factor productivity. This dynamic effect of a “brain gain” on
the rate of scientific and technological innovation of a country has indeed been captured
by several empirical studies.
Box 4: 'Brain drain' and 'brain waste'
In a number of new Member States, the emigration of mostly younger workers has
sparked concerns over brain drain and labour shortages. Several reports indeed
indicate that emigration has contributed to labour shortages in some countries, e.g. the
Baltic States and Poland.
However, in many countries labour shortages have been aggravated by factors other than
emigration, such as strong economic growth, relatively low labour market participation,
in particular of younger and older persons, and low internal mobility. Moreover, labour
shortages affect mostly specific sectors of the economy (e.g. construction, hotels and
restaurants) and professions (e.g. health care). Furthermore, the differences in the skillmix between emigrants and the sending countries’ labour forces seem to be relatively
moderate, thus suggesting that the overall brain drain may be limited (see Box 3). There
is also evidence that enrolment rates for tertiary education in the EU-10/2 have
substantially accelerated over the past years, which may begin to compensate the outflow
of skilled labour.
Another concern has been the issue of 'brain waste' or 'downskilling' of mobile
workers. This is related to the observation that many mobile workers from the new
Member States are employed well below their education levels in the EU-15. Although
the educational attainment of migrants from the new Member States is relatively high (as
shown in Box 3), the overwhelming share of the NMS migrants are employed in
occupations which require only elementary skills. Moreover, studies for the UK suggest
that the returns to education and work experience are quite low for recently arrived
workers from the new Member States. However, this does not necessarily imply that
migration results in a ‘brain waste’ if one considers the entire life cycle of a worker.
Additional human capital may be acquired abroad such as language skills, which will
display their returns later in the domestic labour market.
5. Recent European actions supporting skills and mobility The EU Job Mobility
Action Plan has four main goals: improving existing legislation and administrative
practices; ensuring policy support for mobility; reinforcing EURES and encouraging the
public's awareness of the benefits of mobility. It calls for all stakeholders to work on
removing barriers to mobility. The Action Plan is complementary to other important
legislation and initiatives ongoing at Community level such as Directive 2005/36/EC on
the mutual recognition of professional qualifications and the directive 2006/123/EC on
Services in the internal market.
In order to establish an environment which creates opportunities for worker mobility,
information and transparency of (international) job opportunities are being
reinforced. Public employment services are highly responsible for this aspect. For its part,
the Commission is reinforcing the services provided by the European Employment
Service (EURES). EURES combines a well-qualified network of 750 advisors with an
extensive online portal offering access to all vacancies posted by EU national public
8
employment services. EURES' services are also being enhanced to meet the needs of
specific categories of workers – for instance women, researchers, young workers, older
workers, the self-employed, seasonal workers and the long-term unemployed. An
efficient tool to improve public awareness and facilitate a direct contact and exchange of
information on mobility opportunities is the annual 'European Job Days' scheme where
some 500 events are organised around end of September in more than 300 cities.
In order to ensure that individuals' qualifications and competences can be valued and
suitably used for a job; it is important to ensure proper recognition of qualifications and
of experience and skills acquired. EU member states are being encouraged to
implement the European Qualifications Framework (EQF). In 2008, a consultation group
with Member States, social partners and civil bodies agreed on criteria and procedures for
Member States to implement the EQF qualification system by 2010. With related
objectives, Europass6, which was launched at the beginning of 2005, is an online portal
that helps describe competences and skills in CVs and support employers and jobseekers
to compare more easily skills and qualifications. In 2008 2 million CVs were developed
online via the Europass portal. During spring 2009 it is expected that ECVET, the
European credit transfer in vocational education and training, will be adopted by the
Council. This recommendation invites Member States to implement ECVET by 2012.
Linguistic barriers are highly relevant when explaining the limited level of mobility in
Europe. Actions from all stakeholders at national, regional and local level are required to
reduce these difficulties. This includes in particular:
Improving individuals' language skills which have direct effect on reducing language
barriers as well as cultural barriers.
Promoting and supporting education abroad which obviously helps to reduce language
and cultural barriers but also seems to have direct influence on individuals' propensity
to opt later as workers for job and geographic mobility. Member States can play an
important role in highlighting the benefits of geographic and job-to-job mobility in
their National employment strategies and lifelong learning schemes.
The Commission is active through its programme "Lifelong Learning Programme",
lasting from 2007 to 2013. This programme is the flagship European funding programme:
a single framework covers all learning opportunities from childhood to old age. With a
budget of €7bn, it supports projects and activities that foster exchange, co-operation and
mobility across the EU, building on initiatives previously grouped under the Socrates,
Leonardo da Vinci and eLearning programmes.
6. Policy oriented and operational conclusions
Mobility contributes to redirect workers toward the expanding sectors and occupations.
But the decisive factor in this shift is the ability to equip workers with the right mix of
skills and this is all the more true at times of economic downturn and restructuring. In
terms of policy response, the sound link between skills and mobility is clearly made
6
http://europass.cedefop.eu.int/
9
up of strengthened active labour market policies (secure transitions to new jobs) and
lifelong learning (acquisition of new skills and enhanced employability), two key
components of the flexicurity approach which contribute to employment security and
confidence.
From this point of view, a specific contribution may come from Public Employment
Services (PES) as key labour market institutions at the forefront of better labour market
matching7. On the one hand, PES are best placed to assess employers and employees
needs and can contribute to the identification of skills needs and skill mismatches. On the
other one, PES deliver services which contribute directly to a better matching between
labour supply and demand, through:
- development of preventive approaches. Public Employment Services and other
relevant labour market institutions can actively contribute to the early identification of the
new skills required by new jobs. Main mission of the PES is to improve matching
between labour demand and supply, in terms of identifying, and ideally anticipating,
jobseekers' skills (e.g. through such specific services ascareer guidance, vocational
counselling, prescription of training, etc…) so as to improve labour force employability
and meet employers' requirements.
- prescription and provision of training and skills development, as well as of
advisory services along individual transition paths (from unemployment to
employment as well as from job to job). PES have an important role to play as the
gateway to life long learning, helping people to review the direction of their careers to
determine what learning would benefit them and steering them to appropriate institutions
or learning packages. While there are at the moment large numbers of announced job
losses, there are also announcements of significant job creation in some sectors (e.g.
commerce in the UK): PES and other relevant labour market institutions can play an
important role in ensuring that training and requalification take place. In this respect, they
are already encouraging examples of PES providing training within the companies which
are going to re-shift their activities. There is also scope to capitalise on the experiences
of those PES that deliver matching and vocational training services in a combined and/or
complementary way as well as on that of those PES that implement "profiling
techniques" to identify employment barriers personalised for each users so as to provide
tailor-made services to jobseekers (eligible to different services according to their
"distance" from the labour market).
- anticipation and monitoring of changes in the occupational structure and related
skills requirement. The value that data on job vacancies handled by PES (i.e. stock of
unfilled job openings for which firms are actively trying to recruit new workers) have to
address labour market mismatches for economic research and for operational purposes is
well established. Job vacancies point out emerging short term labour market shortages
and skills gaps. Such data can contribute to (a) business cycle analysis and to (b)
determine which actions should be more appropriately taken to tackle high
unemployment, ranging from job training to employment counselling (to address
structural unemployment).
7
EMCO opinion on the economic recovery plan and the impact of the financial crisis on EU labour
markets: EMCO/35/271108/EN.
10
- mainstreaming of EURES information and services to improve matching between
jobseekers and vacancies throughout Europe addressing the existing division between
EURES employment advisers and national employment advisers in a way which reflect
the fact that the geographical mobility is now to be seen hand in hand with job to job
mobility. In 2009-2010 the Commission will put in place a new and innovative online
service from the EURES portal "Match and Map" to provide a clear geographic mapping
of the EU job offers matching a user's profile as well as information on how and where in
Europe learning opportunities are available to acquire the skills they miss (Match and
Map will be linked to PLOTHEUS8).
Questions for debate
Do you agree with the analysis above? How is job mobility being managed in your
country? Is there any national analysis on the way mobile workers are alleviating
labour market bottlenecks?
How do you perceive the role of PES in the management of labour market matching?
Which other actors should be mobilised?
How could European policy makers (EMCO) provide strategic guidance to sustain the
modernisation of Public Employment Services and other relevant labour market
institutions? And how could the bottom-up feedback to policy makers (EMCO) be
improved?
To which extent can the role and capacity of PES and other relevant labour market
institutions be supported and reinforced, including their capacity to face restructuring
challenges and to act at local level?
The development of the European Dictionary of Occupations launched in the
Commission Communication on New Skills for New Jobs is expected to contribute
making vacancy information more accessible and useful. Which mechanisms could be
envisaged to ensure that quality of the information exchanged is enhanced?
8
http://ec.europa.eu/ploteus will link by 2010 15 national data bases on education and training
opportunities
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Selected Bibliography:
DTI (2008), Job mobility in the European Union: Optimising its economic and social
benefits, Study commissioned by the European Commission, DG Employment, Social
Affairs and Equal Opportunities, submitted by the Danish Technological Institute (DTI).
Available
at:
http://ec.europa.eu/social/main.jsp?langId=en&catId=113&newsId=386&furtherNews=y
es
European Commission (2008), The impact of free movement of workers in the context of
EU
enlargement,
COM(2008)
765
final.
Available
at:
http://ec.europa.eu/social/main.jsp?catId=508&langId=en
European Commission (2008), Geographic labour mobility in the context of EU
enlargement, in: Employment in Europe 2008 report, Chapter 3. Available at:
http://ec.europa.eu/social/main.jsp?catId=119&langId=en
European Commission (2008), Education and employment: different pathways across
occupations, in: Employment in Europe 2008 report, Chapter 5. Available at:
http://ec.europa.eu/social/main.jsp?catId=119&langId=en
European Commission (2007), Mobility, an instrument for more and better jobs: The
European Job Mobility Action Plan (2007-2010), COM(2007) 773 final. Available at:
http://ec.europa.eu/social/main.jsp?catId=540&langId=en
European Commission (2007), Panorama of the European labour markets, in:
Employment in Europe 2007 report, Chapter 1. Available at:
http://ec.europa.eu/employment_social/employment_analysis/employ_2007_en.htm
European Foundation (2008): Mobility in Europe – The way forward, Foundation
findings, European Foundation for the Improvement of Living and Working Conditions.
Available at:
http://www.eurofound.europa.eu/pubdocs/2007/03/en/1/ef0703en.pdf
IZA et al. (2008), Geographic mobility in the European Union: Optimising its economic
and social benefits, Study commissioned by the European Commission, DG
Employment, Social Affairs and Equal Opportunities, submitted by the Institute for the
Study of Labor (IZA) in collaboration with NIRAS Consultants A/S and the Swedish
National
Labour
Market
Board
(AMS).
Available
at:
http://ec.europa.eu/social/main.jsp?langId=en&catId=113&newsId=385&furtherNews=y
es
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