Posting of workers across the EU: an empirical investigation

This paper investigates the effects of the intra-European posting of workers on domestic labour markets in the years 2007–2009. Instrumental variables related to neighbouring countries’ populations are used to address the endogeneity between posting and labour market features. Contrary to conventional wisdom, we find that an intensification of posting inflows is not likely to displace domestic workers, at any educational levels. Instead, an increase in posting from abroad may raise domestic labour costs. No significant effects are found on sending country labour market variables. Results point towards the development of possible synergies between domestic and posted workers, so that posting can actually improve labour efficiency and put upward pressure on labour costs.