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How does economic integration influence employment and wages in border regions? The case of the EU enlargement 2004 and Germany’s eastern border

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  • Nils Braakmann
  • Alexander Vogel

Abstract

This paper considers the (short run) employment and wage effects of the 2004 EUenlargement on firms located close to Germany’s Eastern border. We use a 50% sample of Germans plants and apply difference-in-differences-estimators combined with a matching approach. We evaluate changes in total employment, the employment shares of low-skilled and Eastern European workers and the wages for low-skilled, skilled and high-skilled workers in various sectors. Our results suggest negative (short-run) effects of the EU-enlargement on employment in construction and the business services sector, where we also find negative wage effects. Wages and employment in manufacturing, wholesale and retail trade, hotels and restaurants and social and personal service activities seem to have been relatively less affected.
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  • Nils Braakmann & Alexander Vogel, 2011. "How does economic integration influence employment and wages in border regions? The case of the EU enlargement 2004 and Germany’s eastern border," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 303-323, June.
    • Handle: RePEc:spr:weltar:v:147:y:2011:i:2:p:303-323
    DOI: 10.1007/s10290-010-0084-4
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    2. Alexander Vogel, 2009. "The German Business Services Statistics Panel 2003 to 2007," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 129(3), pages 515-522.
    3. Hartmut Egger & Peter Egger, 2002. "How international outsourcing drives up Eastern European wages," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 83-96, March.
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    8. Hanson, Gordon H., 1996. "Economic integration, intraindustry trade, and frontier regions," European Economic Review, Elsevier, vol. 40(3-5), pages 941-949, April.
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    11. Spengler, Anja, 2008. "The establishment history panel 1975-2005 : handbook version 2.0.0," FDZ Datenreport. Documentation on Labour Market Data 200704_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    Cited by:

    1. Peng, Jiachao & Xiao, Jianzhong & Zhang, Lian & Wang, Teng, 2020. "The impact of China's ‘Atmosphere Ten Articles’ policy on total factor productivity of energy exploitation: Empirical evidence using synthetic control methods," Resources Policy, Elsevier, vol. 65(C).
    2. Brändle, Tobias & Kalweit, René, 2016. "The Employment Effects of the EU Eastern Enlargement in Germany," VfS Annual Conference 2016 (Augsburg): Demographic Change 145502, Verein für Socialpolitik / German Economic Association.
    3. Fries, Jan, 2014. "Age and skill bias of trade liberalisation? Heterogeneous employment effects of EU Eastern Enlargement," ZEW Discussion Papers 14-113, ZEW - Leibniz Centre for European Economic Research.
    4. Mitze, Timo & Breidenbach, Philipp, 2018. "Economic integration and growth at the margin: A space-time incremental impact analysis," Ruhr Economic Papers 775, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Vermeulen, Wessel N., 2022. "Stuck outside the single market; Evidence from firms in central and eastern Europe," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 415-434.

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    More about this item

    Keywords

    EU enlargement; Economic integration; Employment; Wages; F15; L80;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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