Austria faces pronounced geographic labour market imbalances, characterised by relatively high unemployment in Vienna and persistent labour shortages in other parts of the country, in particular in its western federal states. These imbalances limit individual opportunities, place pressure on public finances and weigh on economic performance. As internal mobility from the capital to federal states with strong labour demand remains limited, enabling and supporting the geographic mobility of workers and jobseekers has become a strategic priority for the Austrian government and its Public Employment Service (Arbeitsmarktservice - AMS).
To achieve this objective and address geographic labour market imbalances, a forward-looking vision for Austria could build on two complementary pillars: reducing labour mobility barriers faced by workers and jobseekers, and addressing institutional and structural factors that drive residential choices, including strengthening public services in high-opportunity regions to make them more attractive places to live. Together, these approaches can improve labour market matching and support broader regional development objectives.
Improving matching across federal states requires the AMS to broaden the group of jobseekers considered for cross-regional placement and to strengthen existing mobility support instruments. Providing accessible, user-friendly information on job opportunities across Austria, combined with clear guidance on relevant training pathways and available financial support, could help workers and jobseekers search more widely. Financial support for relocation could be more closely aligned with the effective wage premia required to make mobility economically viable, while targeted training measures could help jobseekers acquire the skills needed to take up opportunities in high-demand regions.
Reducing geographic labour market imbalances in the longer term will require co-ordinated action across ministries and levels of government to address underlying institutional and structural factors that shape regional attractiveness. Ultimately, it is real wages, reflecting both earnings and living costs, that determine the attractiveness of employment opportunities. Regional differences in access to affordable housing, in particular social housing, can therefore discourage mobility and contribute to lock in effects. Similarly, reducing regional disparities in access to affordable, full time compatible childcare and the design of family related benefits can support employment related mobility, while a holistic approach to integration policies targeting humanitarian migrants could improve their employment prospects across the country.
This report was developed by the Centre for Entrepreneurship, SMEs, Regions and Cities (CFE), as part of the Programme of Work and Budget of the OECD Local Employment and Economic Development (LEED) Programme. The report was submitted for comments to the LEED Committee (CFE/LEED(2025)32) via written procedure on 6 November 2025.