Sectoral impact of free intra-EU migration in the presence of unemployment benefits
AbstractThis paper builds a multi-sector, three country (centre and two peripheries), New Economic Geography model, where industrial sectors differ in the degree of scale economies and skill-intensity. The model incorporates, for the first time in this class of models, payments to the unemployed in each country. The model is used to evaluate the impact of migration in the enlarged EU, and would also be directly relevant for the NAFTA countries, under a range of possible migration scenarios involving three types of workers: skilled, unskilled, and unemployed. Full migration is the only scenario in which the central country obtains an increase in both skilled and unskilled wages and employment levels. The obverse is true for the two peripheral countries, they lose firms and real wages decline. As a consequence, the central country has an interest in allowing for full migration but the two peripheral countries have an interest in restricting migration.
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Bibliographic InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c010_034.
Length: 20 pages
Date of creation: Jun 2005
Date of revision:
new economic geography; migration; EU enlargement; unemployment; human capital;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-01 (All new papers)
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