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Integration and Search Unemployment: An Analysis of Eastern EU Enlargement

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Author Info

  • Ben J. Heijdra
  • Christian Keuschnigg

Abstract

The paper develops a unified general equilibrium model including savings with overlapping generations, investment and search unemployment. Long-run analytical results for the small open economy identify capital accumulation as a prime transmission channel. The effects of integration on unemployment, however, depend importantly on the nature of wage taxation and unemployment compensation. As a separate methodological contribution, we extend a dynamic CGE model for Germany to allow for search unemployment of high- and low-skilled labour. Simulating the effects of Eastern EU enlargement, we find quantitatively small effects of integration but more pronounced labour market effects from immigration.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2000/wp-cesifo-2000-10/cesifo_wp341.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 341.

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Date of creation: 2000
Date of revision:
Handle: RePEc:ces:ceswps:_341

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Related research

Keywords: Finite lives; search unemployment; capital accumulation; trade; immigration;

References

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  23. Keuschnigg, Christian & Kohler, Wilhelm, 2002. "Eastern Enlargement of the EU: How Much Is It Worth for Austria?," Review of International Economics, Wiley Blackwell, vol. 10(2), pages 324-42, May.
  24. Burda, Michael C. & Weder, Mark, 1998. "Endogenes Wachstum, gleichgewichtige Arbeitslosigkeit und persistente Konjunkturzyklen," SFB 373 Discussion Papers 1999,9, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  25. Ira N. Gang & Francisco L. Rivera-Batiz, 1996. "Immigrants and Unemployment in the European Community," Departmental Working Papers 199611, Rutgers University, Department of Economics.
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Cited by:
  1. Heijdra, Ben J. & Keuschnigg, Christian & Kohler, Wilhelm, 2002. "Eastern enlargement of the EU: jobs, investment and welfare in present member countries," CCSO Working Papers 200213, University of Groningen, CCSO Centre for Economic Research.

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