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Emigration and Wages: The EU Enlargement Experiment

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  • Benjamin Elsner

    () (Department of Economics, Trinity College Dublin)

Abstract

This paper studies the impact of a large emigration wave on real wages in the source country. Following EU enlargement in 2004, a large share of the workforce of the Central and Eastern Europe emigrated to Western Europe. Using data from Lithuania for the calibration of a factor demand model I show that emigration had a significant short-run impact on real wages in the source country. In particular, emigration led to a change in the wage distribution between young and old workers. The wages of young workers increased by 6%, whereas the wages of old workers decreased by around 1%. On the contrary, I find no effect on the wage distribution between workers of different education levels.

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Paper provided by Trinity College Dublin, Department of Economics in its series Trinity Economics Papers with number tep1311.

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Length: 49 pages
Date of creation: Jan 2011
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Handle: RePEc:tcd:tcduee:tep1311

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Keywords: Emigration; EU Enlargement; European Integration; Wage Distribution;

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References

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  3. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," IZA Discussion Papers 2352, Institute for the Study of Labor (IZA).
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  15. Michael A. Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 83-106, Summer.
  16. Abdurrahman Aydemir & George J. Borjas, 2011. "Attenuation Bias in Measuring the Wage Impact of Immigration," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 69-113, 01.
  17. Lorenzo Rocco & Giorgio Brunello & Elena Crivellaro, 2011. "Lost in Transition? The returns to education acquired under communism 15 years after the fall of the Berlin Wall," Working Papers 17, AlmaLaurea Inter-University Consortium.
  18. Benjamin Elsner, 2009. "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.
  19. Catia Batista, 2007. "Joining the EU: Capital Flows, Migration and Wages," Economics Series Working Papers 342, University of Oxford, Department of Economics.
  20. Herbert Brücker & Elke J. Jahn, 2009. "Migration and Wage-Setting: Reassessing the Labor Market Effects of Migration," Kiel Working Papers 1502, Kiel Institute for the World Economy.
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