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Eastern enlargement of the EU: Jobs, investment and welfare in present member countries

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Abstract

Eastern enlargement of the EU promises gains, but also imposes fiscal costs on incumbent countries. A sensitive issue concerns immigration, jobs and wages. We address these issues in a general equilibrium framework, both analytically and through numerical simulations. Analytical results identify capital accumulation as a prime transmission channel. Using a dynamic CGE model with search unemployment of high- and low-skilled labor, we simulate the effects of enlargement on Germany finding small e.ects from trade, but more pronounced labor market e.ects from migration. Based on German model elasticities, we approximate expected benefits and costs for other member countries as well.

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Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2001-11.

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Date of creation: Oct 2001
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Handle: RePEc:jku:econwp:2001_11

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Keywords: enlargement; economic integration; economic growth; capital accumulation; search unemployment; computable general equilibrium analysis;

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Cited by:
  1. Timo Baas & Herbert Brücker, 2012. "The macroeconomic consequences of migration diversion: evidence for Germany and the UK," Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London 2012010, Norface Research Programme on Migration, Department of Economics, University College London.
  2. Wolfgang Gerstenberger & Beate Grundig & Herbert Hofmann & Carsten Pohl & Heinz Schmalholz & Carola Vögtle & Michaela Votteler & Martin Werding, 2004. "Auswirkungen der EU-Osterweiterung auf Wirtschaft und Arbeitsmarkt in Sachsen," ifo Dresden Studien, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, number 35, October.
  3. Orlagh Doyle & Jan Fidrmuc, 2005. "Who is in Favour of Enlargement? Determinants of Support for EU Membership in the Candidate's Countries Referenda," The Institute for International Integration Studies Discussion Paper Series, IIIS iiisdp045, IIIS.
  4. Torstein Bye & Erling Erling Holmoy, 2010. "Removing Policy-based Comparative Advantage for Energy Intensive Production: Necessary Adjustments of the Real Exchange Rate and Industry Structure," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 1), pages 177-198.
  5. Alexander F. Wagner & Mathias Dufour & Friedrich Schneider, 2003. "Satisfaction not Guaranteed - Institutions and Satisfaction with Democracy in Western Europe," CESifo Working Paper Series 910, CESifo Group Munich.
  6. Christian Keuschnigg & Mirela Keuschnigg, 2004. "Aging, Labor Markets and Pension Reform in Austria," University of St. Gallen Department of Economics working paper series 2004 2004-03, Department of Economics, University of St. Gallen.
  7. David E. Wildasin, 2005. "Global Competition for Mobile Resources: Implications for Equity, Efficiency, and Political Economy," Working Papers, University of Kentucky, Institute for Federalism and Intergovernmental Relations 2005-08, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
  8. Alho, Kari E.O. & Kaitila, Ville & Widgrén, Mika, 2008. "Offshoring, Relocation and the Speed of Convergence in the Enlarged European Union," Discussion Papers, The Research Institute of the Finnish Economy 1156, The Research Institute of the Finnish Economy.
  9. Alho, Kari E.O. & Kaitila, Ville & Widgrén, Mika, 2005. "Speed of Convergence and Relocation: New EU Member Countries Catching up with the Old," Discussion Papers, The Research Institute of the Finnish Economy 963, The Research Institute of the Finnish Economy.
  10. Friedrich Schneider & Kausik Chaudhuri & Sumana Chatterjee, 2003. "The Size and Development of the Indian Shadow Economy and a Comparison with other 18 Asian Countries: An Empirical Investigation," Economics working papers, Department of Economics, Johannes Kepler University Linz, Austria 2003-02, Department of Economics, Johannes Kepler University Linz, Austria.
  11. Marcel Thum, 2004. "Die EU-Osterweiterung steht vor der Tür," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 11(01), pages 3-4, 02.
  12. Marilena Giannetti, 2005. "Macroeconomic Effects In the Acceding Countries," Working Papers, University of Rome La Sapienza, Department of Public Economics 87, University of Rome La Sapienza, Department of Public Economics.
  13. Friedrich Schneider & Alexander F. Wagner, 2003. "Tradeable permits - Ten key design issues," Economics working papers, Department of Economics, Johannes Kepler University Linz, Austria 2003-04, Department of Economics, Johannes Kepler University Linz, Austria.
  14. Kohler, Wilhelm, 2004. "Eastern enlargement of the EU: a comprehensive welfare assessment," Journal of Policy Modeling, Elsevier, Elsevier, vol. 26(7), pages 865-888, October.

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