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Joining the EU: Capital Flows, Migration and Wages

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  • Catia Batista

Abstract

What is the impact of joining the European Union on a small, less developed economy? This is the general question driving this research paper. In particular, the role of factor movements in explaining real wage behavior in Portugal after its entry in the European Union (EU) is evaluated. Based on these results, counterfactual exercises are performed to measure the impact of foreign investment and emigration on skilled and unskilled wages between 1985 and 1999. We find a small role for labor movements, and a more important one for capital inflows. This should constitute a good starting point to think about the consequences of the Eastern enlargement of the EU and of other integration experiences that abolish barriers to factor mobility.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 342.

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Date of creation: 01 Aug 2007
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Handle: RePEc:oxf:wpaper:342

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Keywords: International Migration; Capital Flows; Wages; Skill; Capital-Skill Complementarity; Economic Integration; European Union; Portugal;

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Citations

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Cited by:
  1. Benjamin Elsner, 2011. "Emigration and Wages: The EU Enlargement Experiment," The Institute for International Integration Studies Discussion Paper Series iiisdp379, IIIS.
  2. Benjamin Elsner, 2010. "Does Emigration Benefit the Stayers? The EU Enlargement as a Natural Experiment. Evidence from Lithuania," The Institute for International Integration Studies Discussion Paper Series iiisdp326, IIIS.
  3. Marcel Fafchamps, 2007. "Human Capital, Exports, and Wages," Economics Series Working Papers GPRG-WPS-069, University of Oxford, Department of Economics.
  4. Catia Batista, 2008. "Why Doesn't Labor Flow from Poor to Rich Countries? Micro Evidence from the European Integration Experience," Economics Series Working Papers 402, University of Oxford, Department of Economics.

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