Labor Market Effects of Open Borders: Evidence from the Finnish Construction Sector after EU Enlargement

Isa Kuosmanen and Jaakko Meriläinen

Journal of Human Resources, 2025, vol. 60, issue 2, 434-468

Abstract: The eastern enlargement of the EU differentially exposed workers in different regions and occupations in Finland to a foreign workforce, in particular to posted workers. Using a triple-differences strategy and detailed individual-level administrative data, we document robust evidence that the entry of new EU countries decreased the annual earnings of vulnerable workers relative to less vulnerable workers in the construction sector. This decrease was persistent even ten years after the enlargement and economically meaningful, about 9 percent (roughly a month’s salary per year), on average. We also show a small increase in unemployment and provide evidence on different adjustment mechanisms.

JEL-codes: C23 J61 J62 J82 (search for similar items in EconPapers)
Date: 2025
Note: DOI: https://doi.org/10.3368/jhr.0321-11546R2
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:60:y:2025:i:2:p:434-468

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