Labour Arbitrage on European Labour Markets: Free Movement and the Role of Intermediaries

Free movement of workers belongs to the core principles of the European Union, although the intra-European mobility of labour migrants has come under pressure in recent years. Cross-border mobility and recruitment of workers from abroad are often motivated by employers with arguments of labour shortages, but also with reasons of costs and employment protection, which tend to be lower for migrant workers. The cost differences mainly stem from differences in the regulatory regime in the fields of corporate law, labour law, and social security law. In our research, we found evidence that many firms adopt recruitment practices, and start using