Labour mobility in the EU single market

Free movement of workers ranks among the key achievements of the European single market and is firmly enshrined in law. In practice, however, its potential falls well short of expectations. Despite formal rights to mobility, actual cross-border labour migration within the EU has been comparatively low, remaining at a stable but low level for years. At the same time, many member states are experiencing significant skills shortages, whilst in other regions the workforce is underemployed. This discrepancy points to a structural problem: The institutional and economic framework prevents a sufficient number of workers from moving to where they could be deployed most productively, thus weakening a key adjustment mechanism of the single market – with direct negative consequences for Europe’s growth, innovation and competitiveness.

This analysis shows that the underlying causes are diverse and mutually reinforcing. Institutional barriers remain a major obstacle, particularly as regards the recognition of professional qualifications. Complex, lengthy and often still paper-based procedures make it difficult for workers to utilise their qualifications in other member states, thereby preventing the efficient allocation of human capital. This is compounded by administrative hurdles, for example when posting workers abroad or dealing with social security issues, resulting in uncertainty and additional costs for both workers and companies. Language barriers and a lack of information also remain significant factors that limit actual mobility, despite the legal freedoms in place.

In addition to these institutional factors, economic barriers, too, play a decisive role. A particular problem is the scarce and expensive housing in economically dynamic regions, which acts as a de facto barrier to entry for many potentially mobile workers. Even where attractive employment opportunities exist, high living costs can make relocation unattractive or impossible. Furthermore, there continue to be differences in national social security and tax systems, which complicate the portability of entitlements and thus create additional risks for mobile workers. Overall, this results in an “invisible fragmentation” of the single market, which restricts effective mobility far more severely than the formal legal situation would suggest. Against this backdrop, three particularly effective policy recommendations can be derived.

Firstly, it is essential to substantially simplify and speed up the recognition of professional qualifications. In particular, this requires systematic digitisation of procedures, greater standardisation of requirements and – where possible – wider use of automatic recognition systems. The aim must be to ensure that qualifications can be recognised quickly, transparently and reliably within the EU.

Secondly, a focus should be placed on further developing an integrated European labour market information system. Platforms such as EURES can be significantly enhanced through better data integration, standardised skills profiles and closer cooperation between national employment services. A transparent, EU-wide labour market would reduce the cost of searching for jobs, improve matching processes and thus significantly increase actual mobility.

Thirdly, it is necessary to improve the framework conditions for mobility at the local level, in particular by expanding the supply of housing in economically strong regions and by improving the coordination and portability of social security benefits. Only if workers have realistic access to housing and the social risks associated with relocating are minimised can the necessary level of mobility be achieved.

Overall, it is clear that although the free movement of workers in the EU has been enshrined in law, its economic impact is limited by numerous practical obstacles. Overcoming these barriers is key to fully exploiting the productivity potential of the single market and securing Europe’s long-term competitiveness.

This article is an excerpt from the 2026 Annual Bulletin of the Advisory Board of the Foundation for Family Businesses.