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Labor Market Effects of Economic Integration: The Impact of Re‐Unification in German Border Regions

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  • Thiess Buettner
  • Johannes Rincke

Abstract

. This paper exploits the significant reduction in impediments to labor mobility in the process of German re‐unification in order to identify labor supply shocks in the West German labor market. The focus is on the quasi‐experiment of the border removal in the regions situated at the German–German border that faced a massive increase of cross‐border labor supply. The results indicate that despite a gain in employment, the border removal was accompanied by a decline in wages and an increase in unemployment relative to other West German regions.

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  • Thiess Buettner & Johannes Rincke, 2007. "Labor Market Effects of Economic Integration: The Impact of Re‐Unification in German Border Regions," German Economic Review, Verein für Socialpolitik, vol. 8(4), pages 536-560, November.
    • Handle: RePEc:bla:germec:v:8:y:2007:i:4:p:536-560
    DOI: 10.1111/j.1468-0475.2007.00417.x
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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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