Human capital and income convergence in the EU

This report examines convergence in human capital – specifically that of individuals with tertiary education – in the EU, analysing three phases: creation, utilisation in the labour market and mobility. The analysis finds that Member States are performing better in creating human capital through education but finds disparities in the other two phases, with differences in labour market opportunities resulting in different mobility flows. A cost estimate exercise reveals that a country’s lack of attractiveness to talented individuals has economic repercussions, and that loss of human capital through emigration is not balanced by returning or incoming talent. If the imbalance in human capital circulation in the EU is not addressed, this may hurt convergence, leaving Member States and regions without the skills to negotiate the twin transition successfully. An examination of policies to attract talent illuminates the need for long-term initiatives and to link them with labour market opportunities.