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Eastern enlargement of the EU: jobs, investment and welfare in present member countries

  • Heijdra, Ben J.
  • Keuschnigg, Christian
  • Kohler, Wilhelm

    (Groningen University)

Eastern enlargement of the EU promises gains, but also imposes fiscal costs on incumbent countries. A sensitive issue concerns immigration, jobs and wages. We address these issues in a general equilibrium framework, both analytically and through numerical simulations. Analytical results identify capital accumulation as a prime transmission channel. Using a dynamic CGE model with search unemployment of high- and low-skilled labor, we simulate the effects of enlargement on Germany finding small effects from trade, but more pronounced labor market effects from migration. Based on German model elasticities, we approximate expected benefits and costs for other member countries as well.

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File URL: http://irs.ub.rug.nl/ppn/241215951
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Paper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number 200213.

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Date of creation: 2002
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Handle: RePEc:dgr:rugccs:200213
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  1. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR;CES;MSH, vol. 12(24), pages 125-176, 04.
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  15. E. Baldwin, Richard & Seghezza, Elena, 1998. "Regional Integration and Growth in Developing Nations," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 13, pages 367-399.
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