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Crossing Borders: Labor Market Effects of European Integration

Author

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  • Hannah Illing

Abstract

This paper studies the labor market effects of out- and in-migration in the context of cross-border commuting. It investigates an EU policy reform that granted Czech citizens full access to the German labor market, resulting in a Czech commuter outflow across the border to Germany. Exploiting the fact that the reform specially impacted the Czech and German border regions, I use a matched difference-in-differences design to estimate its effects on local labor markets in both countries. Using a novel dataset on Czech regions, I show that municipalities in the Czech border region experienced a decrease in unemployment rates due to the worker outflow, and a corresponding increase in vacancies. For German border municipalities, I and evidence for slower employment growth (long-term) and slower wage growth (short-term), but no displacement effects for incumbent native workers.

Suggested Citation

  • Hannah Illing, 2023. "Crossing Borders: Labor Market Effects of European Integration," CRC TR 224 Discussion Paper Series crctr224_2023_396, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2023_396
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp396
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    More about this item

    Keywords

    Out-Migration; In-Migration; Local Labor Markets;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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