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EU Enlargement and the Future of the Welfare State

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  • Hans-Werner Sinn

Abstract

The eastern expansion of the EU resembles German unification in its mometousness. Whereas the latter led to a 26% increase in the population of the Federal Republic, the former will increase the population of the EU by 28% if all ten entry aspirants are accepted. A special problem will be posed by migration. In view of the existing wage differences between eastern and western Eurpean countries, a massive westward migration can be expected after EU expansion. A temporary east-to-west migration up to the time that the eastern countries have created an efficient capital stock makes economic sense if it is driven by wage differences and meets with a flexible labour market. Migration does not make economic sense, however, if, and to the extent to which, it is induced by the current social assistance systems. Moreover, welfare-motivated migration would create competition among western European states to frighten off potential migrants, which would lead to an erosion of the traditional social welfare state. If the EU plan incorporated a limitation of the free movement of labour, the beneficial migration would also be stopped. A better solution would be to limit access to the western social systems, at least for a transitional period in order to filter out migration induced by differing social standards. An EU-wide application of the home-country principle in the granting of social benefits would achieve this goal.

Suggested Citation

  • Hans-Werner Sinn, 2000. "EU Enlargement and the Future of the Welfare State," CESifo Working Paper Series 307, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_307
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    Citations

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    Cited by:

    1. Tito Boeri & Herbert Brücker, 2005. "Migration, Co-ordination Failures and EU Enlargement: Paper Presented at the 41st Economic Policy Panel in Luxembourg, 15/16 April 2005," Discussion Papers of DIW Berlin 481, DIW Berlin, German Institute for Economic Research.
    2. Fertig, Michael, 2002. "Evaluating Immigration Policy Potentials and Limitations," IZA Discussion Papers 437, Institute of Labor Economics (IZA).
    3. Renzo Orsi & Katarzyna Zukrowska, 2004. "Policy Advice: Markets and Policies," Eastward Enlargement of the Euro-zone Working Papers wp20, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Feb 2004.
    4. Honkapohja, Seppo & Turunen-Red, Arja H., 2004. "Gains and losses from tax competition with migration," Working Papers 2004-01, University of New Orleans, Department of Economics and Finance.
    5. Hans-Werner Sinn & Martin Werding, 2001. "Zuwanderung nach der EU-Osterweiterung: Wo liegen die Probleme?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 54(08), pages 18-27, May.
    6. Straubhaar, Thomas, 2000. "Internationale Migration Gehen oder Bleiben: Wieso gehen wenige und bleiben die meisten?," Discussion Paper Series 26289, Hamburg Institute of International Economics.
    7. Finn Olesen & Jørgen Drud Hansen, 2000. "European Integration: Some stylised facts," Working Papers 13/00, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    8. Boeri, Tito & Brücker, Herbert, 2005. "Migration, Co-ordination Failures and EU Enlargement," IZA Discussion Papers 1600, Institute of Labor Economics (IZA).
    9. Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003.
    10. Anzelika Zaiceva, 2004. "Implications of EU Accession for International Migration: An Assessment of Potential Migration Pressure," CESifo Working Paper Series 1184, CESifo Group Munich.
    11. Fertig, Michael & Schmidt, Christoph M., 2000. "Aggregate-Level Migration Studies as a Tool for Forecasting Future Migration Streams," IZA Discussion Papers 183, Institute of Labor Economics (IZA).
    12. Alexander Haupt & Wolfgang Peters, 2001. "Voting on Public Pensions With Hand and Feet: How Young Migrants Try to Escape From Gerontocracy," CESifo Working Paper Series 523, CESifo Group Munich.
    13. de Melo, Jaime & Miguet, Florence & Müller, Tobias, 2002. "The Political Economy of EU Enlargement: Lessons from Switzerland," CEPR Discussion Papers 3449, C.E.P.R. Discussion Papers.
    14. Michael Bolle & José Caétano & Jaakko Kiander & Vladimir Lavrac & Renzo Orsi & Tiiu Paas & Katarzyna Zukrowska, 2002. "The Eastward Enlargement of the Eurozone - State of the Art Report," Eastward Enlargement of the Euro-zone Working Papers wp02, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Jan 2002.

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