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Labour mobility - an adjustment mechanism in Euroland? Empirical evidence for Western Germany, France and Italy

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  • Puhani, Patrick A.

Abstract

The purpose of this paper is to evaluate whether labour mobility is likely to act as a sufficient adjustment mechanism in the face of asymmetric shocks in Euroland. To this end, we estimate the elasticity of migration with respect to changes in unemployment and income on the basis of regional panel data provided by Eurostat, the statistical office of the European Union. Regression results are provided for Western Germany, France, and Italy. It is shown that labour mobility is highest in Germany, followed by France, and Italy. However, even in Germany, the accommodation of a shock to unemployment by migration takes several years. We conclude that labour mobility is extremely unlikely to act as a sufficient adjustment mechanism to asymmetric shocks in Euroland. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 99-47.

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Date of creation: 1999
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Handle: RePEc:zbw:zewdip:5260

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Keywords: European Monetary Union (EMU); euro; labour mobility;

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  1. Alexander Jung, 1996. "Is there a causal relationship between exchange rate volatility and unemployment?," Intereconomics: Review of European Economic Policy, Springer, Springer, vol. 31(6), pages 281-282, November.
  2. McCormick, Barry, 1997. "Regional unemployment and labour mobility in the UK," European Economic Review, Elsevier, Elsevier, vol. 41(3-5), pages 581-589, April.
  3. Daniel Gros, 1996. "Germany’s stake in exchange rate stability," Intereconomics: Review of European Economic Policy, Springer, Springer, vol. 31(5), pages 236-240, September.
  4. Jörg Decressin, 1994. "Internal migration in West Germany and implications for East-West salary convergence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 130(2), pages 231-257, June.
  5. Maurice Obstfeld & Giovanni Peri, 1998. "Regional non-adjustment and fiscal policy," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 13(26), pages 205-259, 04.
  6. Müller, Claudia & Buscher, Herbert S., 1999. "The impact of monetary instruments on shock absorption in EU-Countries," ZEW Discussion Papers 99-15, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, Econometric Society, vol. 46(6), pages 1251-71, November.
  8. Patrick A. Puhani, 2001. "Labour Mobility: An Adjustment Mechanism in Euroland? Empirical Evidence for Western Germany, France and Italy," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 2(2), pages 127-140, 05.
  9. Michael Todaro, 1980. "Internal Migration in Developing Countries: A Survey," NBER Chapters, in: Population and Economic Change in Developing Countries, pages 361-402 National Bureau of Economic Research, Inc.
  10. Büttner, Thiess, 1999. "Regional Stabilization by Fiscal Equalization? Theoretical Considerations and Empirical Evidence from Germany," ZEW Discussion Papers 99-23, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. Buscher, Herbert & Mueller, Claudia, 1999. "Exchange Rate Volatility Effects on the German Labour Market: A Survey of Recent Results and Extensions," IZA Discussion Papers 37, Institute for the Study of Labor (IZA).
  12. Lauer, Charlotte, 1999. "The Effects of European Economic and Monetary Union on Wage Behaviour," IZA Discussion Papers 36, Institute for the Study of Labor (IZA).
  13. Franz, Wolfgang, 1998. "Der Euro als Jobmaschine? Zu den Auswirkungen des Euro auf den deutschen Arbeitsmarkt," IZA Discussion Papers 9, Institute for the Study of Labor (IZA).
  14. Pissarides, Christopher A & McMaster, Ian, 1990. "Regional Migration, Wages and Unemployment: Empirical Evidence and Implications for Policy," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 812-31, October.
  15. Funke, Michael, 1997. "The Nature of Shocks in Europe and in Germany," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 64(255), pages 461-69, August.
  16. Thomas Straubhaar, 1988. "International Labour Migration within a Common Market: Some Aspects of EC Experience," Journal of Common Market Studies, Wiley Blackwell, Wiley Blackwell, vol. 27(1), pages 45-62, 09.
  17. Stirböck, Claudia & Heinemann, Friedrich, 1999. "Capital Mobility within EMU," ZEW Discussion Papers 99-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  18. Claudia Stirböck & Herbert Buscher, 2000. "Exchange rate volatility effects on labour markets," Intereconomics: Review of European Economic Policy, Springer, Springer, vol. 35(1), pages 9-22, January.
  19. Belke, A. & Gros, D., 1998. "Evidence on the Costs of Intra-European Exchange Rate Variability," Discussion Paper, Tilburg University, Center for Economic Research 1998-14, Tilburg University, Center for Economic Research.
  20. Eichengreen, Barry, 1993. "European Monetary Unification," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1321-57, September.
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