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Migration, Co-ordination Failures and EU Enlargement

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Author Info
Tito Boeri () (Bocconi University Milan, IGIER and IZA Bonn)
Herbert Brücker (DIW Berlin, Aarhus School of Business and IZA Bonn)

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Abstract

European migration policies are characterised by a fundamental paradox: they are getting tighter and tighter just while public opinion is becoming more favourable to migrants and the immobility of European citizens expands the scope for spatial arbitrage, accruing the benefits, of immigration. In this paper we consider two possible explanations for this puzzle. At first, based on a computable general equilibrium model, we evaluate whether migration to "rigid labour markets" a-la European involves cost, which are neglected by economic theory. Our results suggest that the economic benefits from international migration are, at a GDP gain of 0.2-0.3% at a migration of 1% of the labour force, but that natives in the receiving countries may lose out especially when generous unemployment benefits are provided to the migrants. Then, we evaluate effects of co-ordination failures in the setting of national migration policies, documenting that a race-to-the-top in migration restrictions has indeed occurred in the case of the Eastern Enlargement of the EU and has involved significant diversion of migration from more restrictive to less restrictive countries. Finally we discuss two potential ways to invert the trend towards stricter barriers to migration, namely i) restricting access to welfare and ii) adopting an EU-wide migration policy.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1600.

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Length: 60 pages
Date of creation: May 2005
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Handle: RePEc:iza:izadps:dp1600

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Related research
Keywords: migration; enlargement; welfare door;

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Find related papers by JEL classification:
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
F2 - International Economics - - International Factor Movements and International Business

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gordon H. Hanson, 2008. "The Economic Consequences of the International Migration of Labor," NBER Working Papers 14490, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Dora M. Iakova, 2007. "The Macroeconomic Effects of Migration from the New European Union Member States to the United Kingdom," IMF Working Papers 07/61, International Monetary Fund. [Downloadable!]
  3. Ray Barrell & John FitzGerald & Rebecca Riley, 2007. "EU Enlargement and Migration: Assessing the Macroeconomic Impacts," Papers WP203, Economic and Social Research Institute (ESRI). [Downloadable!]
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