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How does economic integration influence employment and wages in border regions? The case of the EU enlargement 2004 and Germany’s eastern border

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  • Nils Braakmann

    ()

  • Alexander Vogel

    ()

Abstract

This paper considers the (short run) employment and wage effects of the 2004 EUenlargement on firms located close to Germany’s Eastern border. We use a 50% sample of Germans plants and apply difference-in-differences-estimators combined with a matching approach. We evaluate changes in total employment, the employment shares of low-skilled and Eastern European workers and the wages for low-skilled, skilled and high-skilled workers in various sectors. Our results suggest negative (short-run) effects of the EU-enlargement on employment in construction and the business services sector, where we also find negative wage effects. Wages and employment in manufacturing, wholesale and retail trade, hotels and restaurants and social and personal service activities seem to have been relatively less affected.

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File URL: http://hdl.handle.net/10.1007/s10290-010-0084-4
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Bibliographic Info

Article provided by Springer in its journal Review of World Economics.

Volume (Year): 147 (2011)
Issue (Month): 2 (June)
Pages: 303-323

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Handle: RePEc:spr:weltar:v:147:y:2011:i:2:p:303-323

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Related research

Keywords: EU enlargement; Economic integration; Employment; Wages; F15; L80;

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  1. Geishecker, Ingo & Riedl, Maximilian & Frijters, Paul, 2012. "Offshoring and job loss fears: An econometric analysis of individual perceptions," Labour Economics, Elsevier, vol. 19(5), pages 738-747.
  2. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
  3. Braakmann, Nils & Wagner, Joachim, 2009. "Labor Market Adjustments after a Large Import Shock: Evidence from the German Clothing Industry and the Multi-Fibre Arrangement," IZA Discussion Papers 4633, Institute for the Study of Labor (IZA).
  4. Alexander Vogel, 2009. "Exporter Performance in the German Business Services Sector: First Evidence from the Services Statistics Panel," Working Paper Series in Economics 111, University of Lüneburg, Institute of Economics.
  5. Hanson, Gordon H., 1998. "Regional adjustment to trade liberalization," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 419-444, July.
  6. Nils Braakmann & Alexander Vogel, 2009. "The impact of the 2004 EU-enlargement on enterprise performance and exports of service enterprises in the German eastern border region," Working Paper Series in Economics 124, University of Lüneburg, Institute of Economics.
  7. Alexander Vogel, 2009. "The German Business Services Statistics Panel 2003 to 2007," Working Paper Series in Economics 127, University of Lüneburg, Institute of Economics.
  8. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  9. Anja Spengler, 2008. "European Data Watch: The Establishment History Panel," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 128(3), pages 501-509.
  10. Spengler, Anja, 2008. "The establishment history panel 1975-2005 : handbook version 2.0.0," FDZ Datenreport. Documentation on Labour Market Data 200704_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  11. Hanson, Gordon H., 1996. "Economic integration, intraindustry trade, and frontier regions," European Economic Review, Elsevier, vol. 40(3-5), pages 941-949, April.
  12. Hartmut Egger & Peter Egger, 2002. "How international outsourcing drives up Eastern European wages," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 83-96, March.
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