The Role of Borders, Languages, and Currencies as Obstacles to Labor Market Integration
AbstractBased on a modified Spatiotemporal Autoregressive Model (STAR), we analyze whether borders still constitute significant impediments to labor market integration in the European Union, despite the formal law of free movement of labor. Using regional data from the EU-15 countries over 21 years, we find that this is the case. We further investigate whether the abolishment of border checks through the Schengen agreement or the introduction of the Euro improved our measure of labor market integration across borders, and do not find evidence in favor. Last, we investigate the role of languages, and potentially cultures, as obstacles to labor market integration. We find that indeed language borders play a larger role than country borders in explaining the lack of labor market integration across borders.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8987.
Date of creation: May 2012
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Other versions of this item:
- Bartz, Kevin & Fuchs-Schündeln, Nicola, 2012. "The role of borders, languages, and currencies as obstacles to labor market integration," European Economic Review, Elsevier, vol. 56(6), pages 1148-1163.
- C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
- J4 - Labor and Demographic Economics - - Particular Labor Markets
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-29 (All new papers)
- NEP-CWA-2012-05-29 (Central & Western Asia)
- NEP-EEC-2012-05-29 (European Economics)
- NEP-EUR-2012-05-29 (Microeconomic European Issues)
- NEP-LAB-2012-05-29 (Labour Economics)
- NEP-MIG-2012-05-29 (Economics of Human Migration)
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