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Empirical investigation on labour market interactions in an enlarged Europe

Author

Listed:
  • Alessia Lo Turco

    (Polytechnic University of Marche, Department of Economics, Ancona, Italy)

  • Aleksandra Parteka

    (Gdansk University of Technology, Faculty of Management and Economics, Gdansk, Poland)

Abstract

This paper proposes an empirical assessment of economic interactions between the labour markets of the integrating EU over the period of time 1995–2005. Drawing on recently made available industry statistics, we provide a sector level study (13 tradable sectors, including manufacturing and services), analysing the contemporary evolution of domestic and trade partners’ employment levels. Given the intensification of trade relations as a result of ongoing integration process, we build a sector-specific measure of economic interdependency, based on information on labour markets’ performance and weighted by the magnitude of intra-EU trade flows (imports). The estimates of a dynamic empirical model confirm the interactions between employment levels in different Member States. Domestic employment in NMS-5 is rather positively affected by the expansion of labour markets in other EU’s trade partners (domestic employment levels in NMS-5 countries improve in parallel to the increase in foreign tradable sectors’ employment). The opposite holds true for EU-15 domestic labour markets that are rather challenged by the expansion of tradable sectors in their EU trade partners.

Suggested Citation

  • Alessia Lo Turco & Aleksandra Parteka, 2009. "Empirical investigation on labour market interactions in an enlarged Europe," Bank i Kredyt, Narodowy Bank Polski, vol. 40(1), pages 87-105.
    • Handle: RePEc:nbp:nbpbik:v:40:y:2009:i:1:p:87-105
    Note: The paper draws on findings of the research on “EU Enlargement, Economic Interdependence and the Labor Markets in ‘Old’ and ‘New’ Member States” realised within Scientific Research Programs of National Relevance PRIN 2007 on “European Union Policies, Economic and Trade Integration Processes and WTO Negotiation” – financial support received from the Italian Ministry of Education, University and Research is gratefully acknowledged. We thank the organisers and the participants of the conference organised by the National Bank of Poland and Bank i Kredyt (“EU Enlargement, Migration, Labor Market and Economic Growth in Europe after Enlargement”, Warsaw, 8-9 December 2008), where the original paper won the Best Paper Award, as well as the participants of PUE-PIEC Workshop (Universita’ Roma Tre, Rome, 28–29 January 2009) for valuable comments and suggestions. All the remaining errors are ours.
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    References listed on IDEAS

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    More about this item

    Keywords

    EU integration; labour markets; trade;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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