Open Borders in the European Union and Beyond: Migration Flows and Labor Market Implications

In 2004, the European Union admitted 10 new countries, and wages in these countries were generally well below the levels in the existing member countries. Citizens of these newly-admitted countries were subsequently free to take jobs anywhere in the EU, and many did so. In 2015, a large number of refugees from Syria and other broken countries sought to migrate to EU countries (along very dangerous routes), and these refugees were met with fierce resistance, at least in some places. This paper seeks to understand the labor market implications of allowing free migration across borders, with particular reference to the EU. The aim is to quantify the migration flows associated with EU enlargement, and to analyze the extent to which these flows affected equilibrium wages. The population of Syria is about 17 million; the EU population is over 500 million, so it seems likely that if free migration were allowed from Syria to the EU, the wage effects would be small. Indeed, preliminary estimates suggest that even if the borders are open to larger sources populations (such as Afghanistan, 33 million, or Ukraine with populations of about 33 and 44 million), the wage effects would still not be very large.