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Labor Market Effects of Economic Integration: The Impact of Re-Unification in German Border Regions

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  • Thiess Buettner
  • Johannes Rincke

Abstract

This paper exploits the significant reduction in impediments to labor mobility in the process of German re-unification in order to identify labor supply shocks in the West German labor market. The focus is on the quasi-experiment of the border removal in the regions situated at the German-German border that faced a massive increase of cross-border labor supply. The results indicate that despite a gain in employment, the border removal was accompanied by a decline in wages and an increase in unemployment relative to other West German regions. Copyright Verein für Socialpolitik and Blackwell Publishing Ltd. 2007.

Suggested Citation

  • 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.
  • Handle: RePEc:bla:germec:v:8:y:2007:i::p:536-560
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    5. 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.
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    Cited by:

    1. Fidrmuc, Jarko & Hainz, Christa, 2013. "The effect of banking regulation on cross-border lending," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1310-1322.
    2. Gergő Medve-Bálint & Sara Svensson, 2012. "A helyi önkormányzatok eurorégiókban való részvétele Közép-Európában," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 19-32.
    3. Niebuhr, Annekatrin & Stiller, Silvia, 2004. "Integration and Labour Markets in European Border Regions," HWWA Discussion Papers 284, Hamburg Institute of International Economics (HWWA).
    4. Karl-Heinz Paqué, 2009. "Deutschlands West-Ost-Gefälle der Produktivität: Befund, Deutung und Konsequenzen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 78(2), pages 63-77.
    5. Szabolcs Szanyi, 2012. ""A Szatmár-Beregi sík természeti értékei" - Tervezet egy nemzetközi bioszféra rezervátum kialakítására," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 56-64.
    6. 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.
    7. Hagn, Florian & Maennig, Wolfgang, 2008. "Employment effects of the Football World Cup 1974 in Germany," Labour Economics, Elsevier, vol. 15(5), pages 1062-1075, October.
    8. Brülhart, Marius & Carrère, Céline & Trionfetti, Federico, 2012. "How wages and employment adjust to trade liberalization: Quasi-experimental evidence from Austria," Journal of International Economics, Elsevier, pages 68-81.
    9. Pasztor Szabolcs, 2012. "Development Possibilities Of The Hungarian-Ukrainian," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 385-389, December.
    10. Peter Huber, 2008. "Did previous EU-enlargements change the regional distribution of production? An empirical analysis of three enlargement episodes," International Journal of Public Policy, Inderscience Enterprises Ltd, pages 187-206.
    11. Mátyás Jaschitz, 2012. "Együtt vagy szétválasztva? Kísérletek a két Komárom térszerkezeti súlyának megállapítására," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 33-52.
    12. Ferenc Szilágyi, 2012. "Az Érmellék mint határ menti kistérség stratégiai értékelése és lehetséges jövőbeli státusza," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 75-89.
    13. repec:iab:iabzaf:v:39:i:1:p:57-76 is not listed on IDEAS
    14. Moritz, Michael & Gröger, Margit, 2007. "The German-Czech border region after the fall of the Iron Curtain: Effects on the labour market : an empirical study using the IAB Employment Sample (IABS)," IAB Discussion Paper 200701, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    15. Fuchs-Schündeln, Nicola & Izem, Rima, 2012. "Explaining the low labor productivity in East Germany – A spatial analysis," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 1-21.
    16. Peter Huber, 2005. "The Regional Effects of European Integration - an Empirical Analysis of Three Enlargement Episodes," ERSA conference papers ersa05p68, European Regional Science Association.
    17. Tímea Tünde Csetnek, 2012. "Kapacitás-és intézményfejlesztés a román-magyar határ menti övezetben," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 104-109.
    18. Pflüger Michael & Blien Uwe & Moritz Michael & Möller Joachim, 2013. "Labor Market Effects of Trade and FDI – Recent Advances and Research Gaps," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(1), pages 86-116, February.
    19. Niebuhr, Annekatrin & Stiller, Silvia, 2006. "Integration and labour markets in European border regions," 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 57-76.
    20. Lóránt Bali, 2012. "A horvát-magyar határ menti együttműködés főbb aspektusai és leképeződései Barcs és Zala megye példáján," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 53-55.
    21. András Ricz, 2012. "A határon átívelő programok hatásai Vajdaság területi fejlődésére - az ezeken alapuló területi együttműködések továbbfejlesztésének lehetőségei," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 90-103.
    22. Dóra Egervári, 2012. "Határtalan információáramlás? - Az információhoz és dokumentumokhoz való szabad hozzáférés esélye és lehetősége Baranyában és Szlavóniában," Eszak-magyarorszagi Strategiai Fuzetek, Faculty of Economics, University of Miskolc, vol. 9(1), pages 65-74.
    23. Zierahn, Ulrich, 2013. "Die regionalen Arbeitsmarkteffekte der Wiedervereinigung in Deutschland," ZEW Wachstums- und Konjunkturanalysen, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, vol. 16(1), pages 8-9.
    24. Ulrich Zierahn, 2012. "The effect of market access on the labor market: Evidence from German reunification," MAGKS Papers on Economics 201239, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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