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Eastern Enlargement and EU-Labour-Markets: Perceptions, Challenges and Opportunities

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Author Info

  • Boeri, Tito

    ()
    (Bocconi University)

  • Brücker, Herbert

    ()
    (Institute for Employment Research (IAB), Nuremberg)

Abstract

This paper summarises the key findings of a recent study on the impact of Eastern Enlargement of the European Union (EU) on labour markets in the current Member States. The study focuses on three main channels, along which enlargement may affect labour markets in the EU, namely i) trade, ii) foreign direct investment, and iii) migration. A main conclusion of the study is that trade and capital movements are very unlikely to lead to an equalisation of factor prices. Thus, strong economic incentives to migration are bound to be present well beyond the date of accession. We estimate the migration potential associated with Eastern enlargement drawing on a time series model of immigration to Germany, which allows to estimate the long-term equilibrium migration potential, as well as the speed of adjustment at which the potential takes place. Our findings suggest that the long-run stock of immigrants from the CEECs-10 in the EU will increase from 0.85 in 1998 to a peak of 3.9 million persons which is expected to be reached around 30 years after the liberalisation of labour movements. Net immigration inflows in the EU are bound to increase immediately reaching a maximum of about 335,000 individuals per year, and subsequently decline to a modest 100,000 to 150,000 people per annum. Around 35% of the migrants are expected to be workers. Microeconometric exercises carried out in the context of the study indicate that such an influx of migrants will have only a moderate impact on wages and employment even in the two most affected countries, Austria and Germany. Although we are dealing with relatively small numbers, they may have an impact on wages and employment in some neighbouring regions of Austria and Germany, where immigration from the CEECs-10 is concentrated. In the final section of the paper, we argue for keeping actual migration flows from CEECs-10 under control for a transitional period. Although the chapter in the accession negotiations on the free movement of labour has been already opened, a joint position of the present EU members regarding this fundamental issue is still missing. European leaders will soon have to come to terms with this issue.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 256.

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Length: 31 pages
Date of creation: Feb 2001
Date of revision:
Publication status: published in: World Economics, 2001, 2(1), 49-68
Handle: RePEc:iza:izadps:dp256

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Related research

Keywords: Immigration; trade; transition; EU enlargement;

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Cited by:
  1. Seppo Kari & Jouko Ylä-Liedenpohja, 2004. "Cost of Capital for Cross-Border Investment: The Fallacy of Estonia as a Tax Haven," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(1), pages 28-43, December.
  2. Kristi Anniste & Tiit Tammaru & Enel Pungas & Tiiu Paas, 2012. "Emigration After Eu Enlargement: Was There A Brain Drain Effect In The Case Of Estonia?," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 87, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  3. repec:iab:iabzaf:v:39:i:1:p:143-148 is not listed on IDEAS
  4. Yordan Kalchev & Valentin Goev & Vesselin Mintchev & Venelin Boshnakov, 2004. "Bulgarian Emigration in the Beginning of ÕÕI Century: an Assessment of Attitudes and the Profile of Potential Emigrants," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 3-30.
  5. Boeri, Tito, 2006. "Eastern enlargement, migration and Euro adoption," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 39(1), pages 143-148.
  6. Ramon Pacheco Pardo, 2012. "Leadership, decision-making and governance in the EU and East Asia: crisis and post-crisis," Asia Europe Journal, Springer, vol. 9(2), pages 77-90, March.
  7. Ana Lamo & Peter Fredriksson & Julian Messina & Giovanni Peri & Etienne Wasmer, 2005. "The Macroeconomics of Education," Sciences Po publications info:hdl:2441/9064, Sciences Po.
  8. Jurajda, Štepán & Terrell, Katherine, 2007. "Regional Unemployment and Human Capital in Transition Economies," IZA Discussion Papers 3176, Institute for the Study of Labor (IZA).
  9. Alexandre Janiak, 2008. "Mobility in Europe - Why it is low, the bottlenecks, and the policy solutions," European Economy - Economic Papers 340, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  10. Ondřej Glazar & Wadim Strielkowski, 2010. "Turkey and the European Union: Possible Incidence of the EU Accession on Migration Flows," Prague Economic Papers, University of Economics, Prague, vol. 2010(3), pages 218-235.
  11. Yordan Kalchev, & Valentin Goev & Vesselin Mintchev & Venelin Boshnakov, 2004. "External Migration from Bulgaria at the Beginning of the XXI Century: Estimates of Potential Emigrants’ Attitudes and Profile," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 137-161.
  12. Thiess Buettner & Johannes Rincke, 2007. "Labor Market Effects of Economic Integration: The Impact of Re-Unification in German Border Regions," German Economic Review, Verein für Socialpolitik, vol. 8, pages 536-560, November.
  13. Kristi Anniste & Tiit Tammaru & Enel Pungas & Tiiu Paas, 2012. "Dynamics of Educational Differences in Emigration from Estonia to the Old EU Member States," Norface Discussion Paper Series 2012017, Norface Research Programme on Migration, Department of Economics, University College London.
  14. Camilla Jensen, 2004. "Formal Integration: FDI and trade in Europe," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(1), pages 5-27, December.
  15. Raul Eamets & Epp Kalaste, 2004. "The Lack of Wage Setting Power of Estonian Trade Unions?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(1), pages 44-60, December.
  16. repec:spo:wpecon:info:hdl:2441/9064 is not listed on IDEAS

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