Social Solidarity through Labor Market Integration

Waltraud Schelkle

in The Political Economy of Monetary Solidarity

Published in print April 2017 | ISBN: 9780198717935
Published online April 2017 | e-ISBN: 9780191787416 | DOI:
Social Solidarity through Labor Market Integration

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This chapter compares labor mobility in the euro area and in the United States. Migration was one of the risk-sharing mechanisms that the mainstream theory of monetary integration highlighted, figuring prominently in Mundell’s original analysis of optimal currency areas. It was seen as a way to adjust to idiosyncratic regional shocks. Yet, even in the US, cyclical shocks have never been a major driver of migration flows, although lasting differences in economic opportunities are. Regulated and formally institutionalized rights to migrate can act as individual insurance. Chapter 8 argues that welfare states are not obstacles to but vehicles for social solidarity, making migration economically less regressive and politically more viable. But the analysis also raises doubts that what may work for individuals can contribute to risk sharing between regions. The regions of origin are typically losers from high levels of emigration.

Keywords: citizenship; dualism; federalism; free movement; income convergence; labor mobility; labor market integration; welfare state

Chapter.  16241 words.  Illustrated.

Subjects: Political Economy

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