IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Emigration and Wages: The EU Enlargement Experiment

  • Elsner, Benjamin

The enlargement of the European Union in 2004 caused a large migration wave from Central Europe to Ireland and the UK. This paper addresses the question whether such an emigration wave changes the wage distribution in the source country. In a theoretical model of a labor market I show that some groups of stayers gain, while others lose from emigration. This outcome depends on the degree of subsitutability between different groups of workers, as well as on skill distribution of emigrants. Using microdata from Lithuania, I simulate the post-2004 emigration wave based on the theoretical model and calculate the resulting changes in wages for different groups of workers. I nd that the wages of young workers increased by around 6% while the wages of older workers decrease by around 2%. The wage increase for young workers is the result of the supply shift: most of the emigrants were young, so that young workers who stay behind become a more scarce resource in the labor market. At the same time, the emigration of young workers decreases the labor demand for older workers, which results in a decrease of their wages.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis with number 48716.

in new window

Date of creation: 2011
Date of revision:
Handle: RePEc:zbw:vfsc11:48716
Contact details of provider: Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  2. Jason Gagnon, 2011. "“Stay With Us?” The Impact of Emigration on Wages in Honduras," OECD Development Centre Working Papers 300, OECD Publishing.
  3. Barrett, Alan & Bergin, Adele & Duffy, David, 2005. "The Labour Market Characteristics and Labour Market Impacts of Immigrants in Ireland," IZA Discussion Papers 1553, Institute for the Study of Labor (IZA).
  4. Hanson, Gordon H. & Slaughter, Matthew J., 2002. "Labor-market adjustment in open economies: Evidence from US states," Journal of International Economics, Elsevier, vol. 57(1), pages 3-29, June.
  5. Gianmarco I P Ottaviano & Giovanni Peri, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," Working Papers 2008.77, Fondazione Eni Enrico Mattei.
  6. Herbert Brücker & Elke J. Jahn, 2011. "Migration and Wage‐setting: Reassessing the Labor Market Effects of Migration," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 286-317, 06.
  7. Yann Algan & Christian Dustmann & Albrecht Glitz & Alan Manning, 2009. "The economic situation of first- and second-generation immigrants in France, Germany and the United Kingdom," LSE Research Online Documents on Economics 28680, London School of Economics and Political Science, LSE Library.
  8. Hazans, Mihails & Philips, Kaia, 2011. "The Post-Enlargement Migration Experience in the Baltic Labor Markets," IZA Discussion Papers 5878, Institute for the Study of Labor (IZA).
  9. Abdurrahman Aydemir & George J. Borjas, 2010. "Attenuation Bias in Measuring the Wage Impact of Immigration," NBER Working Papers 16229, National Bureau of Economic Research, Inc.
  10. Barrett, Alan & Duffy, David, 2007. "Are Ireland’s Immigrants Integrating into its Labour Market?," IZA Discussion Papers 2838, Institute for the Study of Labor (IZA).
  11. Gianmarco I. P. Ottaviano & Giovanni Peri, 2012. "Rethinking The Effect Of Immigration On Wages," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 152-197, 02.
  12. Frédéric Docquier & Hillel Rapoport, 2012. "Globalization, Brain Drain, and Development," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 681-730, September.
  13. Mishra, Prachi, 2007. "Emigration and wages in source countries: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 82(1), pages 180-199, January.
  14. Ray Barrell & John FitzGerald & Rebecca Riley, 2007. "EU Enlargement and Migration: Assessing the Macroeconomic Impacts," Papers WP203, Economic and Social Research Institute (ESRI).
  15. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
  16. Abdurrahman Aydemir & George J. Borjas, 2007. "Cross-Country Variation in the Impact of International Migration: Canada, Mexico, and the United States," Journal of the European Economic Association, MIT Press, vol. 5(4), pages 663-708, 06.
  17. Christian Dustmann & Tommaso Frattini & Anna Rosso, 2012. "The Effect of Emigration from Poland on Polish Wages," CReAM Discussion Paper Series 1229, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  18. Francesco D'Amuri & Gianmarco I. P. Ottaviano & Giovanni Peri, 2009. "The Labor Market Impact of Immigration in Western Germany in the 1990's," CReAM Discussion Paper Series 0910, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  19. Wadensjö, Eskil, 2007. "Migration to Sweden from the New EU Member States," IZA Discussion Papers 3190, Institute for the Study of Labor (IZA).
  20. Ethan Lewis, 2003. "Local, open economies within the U.S.: how do industries respond to immigration?," Working Papers 04-1, Federal Reserve Bank of Philadelphia.
  21. Neil Gandal & Gordon H. Hanson & Matthew J. Slaughter, 2000. "Technology, Trade, and Adjustment to Immigration in Israel," NBER Working Papers 7962, National Bureau of Economic Research, Inc.
  22. Christian Dustmann & Albrecht Glitz, 2012. "How Do Industries and Firms Respond to Changes in Local Labor Supply?," Norface Discussion Paper Series 2012002, Norface Research Programme on Migration, Department of Economics, University College London.
  23. Elsner, Benjamin, 2012. "Does Emigration Benefit the Stayers? Evidence from EU Enlargement," IZA Discussion Papers 6843, Institute for the Study of Labor (IZA).
  24. Giorgio Brunello & Elena Crivellaro & Lorenzo Rocco, 2012. "Lost in transition?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(4), pages 637-676, October.
  25. Benjamin Elsner, 2010. "Does Emigration Benefit the Stayers? The EU Enlargement as a Natural Experiment. Evidence from Lithuania," The Institute for International Integration Studies Discussion Paper Series iiisdp326, IIIS.
  26. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
  27. Michael A. Clemens, 2011. "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 83-106, Summer.
  28. Docquier, Frederic & Ozden, Caglar & Peri, Giovanni, 2011. "The wage effects of immigration and emigration," Policy Research Working Paper Series 5556, The World Bank.
  29. Antonio Ciccone & Giovanni Peri, 2005. "Long-Run Substitutability Between More and Less Educated Workers: Evidence from U.S. States, 1950-1990," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 652-663, November.
  30. John Gibson & David McKenzie, 2011. "Eight Questions about Brain Drain," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 107-28, Summer.
  31. DavidG. Blanchflower & Chris Shadforth, 2009. "Fear, Unemployment and Migration," Economic Journal, Royal Economic Society, vol. 119(535), pages F136-F182, 02.
  32. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
  33. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  34. Brunello, Giorgio & Crivellaro, Elena & Rocco, Lorenzo, 2010. "Lost in Transition? The Returns to Education Acquired under Communism 15 Years after the Fall of the Berlin Wall," IZA Discussion Papers 5409, Institute for the Study of Labor (IZA).
  35. Sari Pekkala, 2005. "Economic Impacts of Immigration: A Survey," Discussion Papers 362, Government Institute for Economic Research Finland (VATT).
  36. Christian Dustmann & Tommaso Frattini & Caroline Halls, 2010. "Assessing the Fiscal Costs and Benefits of A8 Migration to the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 31(1), pages 1-41, 03.
  37. George J. Borjas, 1994. "Ethnicity, Neighborhoods, and Human Capital Externalities," NBER Working Papers 4912, National Bureau of Economic Research, Inc.
  38. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  39. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," CReAM Discussion Paper Series 0608, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  40. González, Libertad & Ortega, Francesc, 2011. "How do very open economies adjust to large immigration flows? Evidence from Spanish regions," Labour Economics, Elsevier, vol. 18(1), pages 57-70, January.
  41. Brücker, Herbert & Jahn, Elke J., 2009. "Migration and wage-setting: reassessing the labor market effects of migration," Kiel Working Papers 1502, Kiel Institute for the World Economy (IfW).
  42. Gordon H. Hanson & Craig McIntosh, 2007. "The Great Mexican Emigration," NBER Working Papers 13675, National Bureau of Economic Research, Inc.
  43. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
  44. Catia Batista, 2007. "Joining the EU: Capital Flows, Migration and Wages," Economics Series Working Papers 342, University of Oxford, Department of Economics.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc11:48716. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.