Foreign Workers and the Austrian Labour Market

In the last 20 years immigration to Austria has not only gained momentum but has also undergone significant structural change. On the one hand refugees, asylum seekers and family members of foreign residents entered in increasing numbers, on the other rising migration flows resulted from Austria's membership to the EU and the opening up of Central and Eastern European Countries (CEECs). Austria has not succeeded to attract large numbers of highly skilled migrants for settlement in Austria, in spite of an explicit immigration policy reorientation in the 1990s. Highly skilled workers tend to come from the European Economic Area and, to a lesser extent, from CEECs. They tend to be temporary residents in Austria, contrary to migrants from the traditional source regions in South-East Europe and Turkey and of refugees, who tend to settle in Austria. The marked inflow of migrants towards the end of the 1980s and in the early 1990s has raised competition between low skilled workers, documented by an above average rise in the unemployment rate of labourers and an opening up of the wage gap between foreign and indigenous workers. In the wake of a restrictive immigration policy the wage gap declined again in the second half of the 1990s to levels typical for the 1980s. The high proportion of foreign youth without school-leaving certificates, a result of the transfer of substantial numbers of children of migrants from the regular school system to special needs schools in the wake of massive refugee inflows and family reunion in the early 1990s, is promising to be a challenge for labour market integration in the medium to long term. Special labour market policy measures will have to be put in place to allow migrant youth and adults to acquire school-leaving certificates and vocational skills which will enhance their chances to find social and labour market integration.