Are there Border Effects in the EU Wage Function?

Peter Huber, Michael Pfaffermayr and Yvonne Wolfmayr

No 1880, CESifo Working Paper Series from CESifo

Abstract: We estimate a linear approximation of the market potential function for Europe as derived in geography and trade models. Using a spatial econometric estimation approach, border effects are identified by a differential impact of other regions purchasing power, depending on whether two regions are located within the EU15 or outside the EU15. We find that intra EU15-borders have an insignificant but external borders a significant effect on regional wage structures. We illustrate the magnitude of EU external border effects by simulating the enlargement of the EU in May 2004. Our results suggest a large impact of the border for new member states, but a relatively small one for old members.

Keywords: market potential; border effects; spatial econometrics (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-eec, nep-geo and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Are There Border Effects in the EU Wage Function? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1880

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