The Role of Borders, Languages, and Currencies as Obstacles to Labor Market Integration

Fuchs-Schündeln, Nicola and Kevin Bartz
Authors registered in the RePEc Author Service: Nicola Fuchs-Schuendeln

No 8987, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Based on a modified Spatiotemporal Autoregressive Model (STAR), we analyze whether borders still constitute significant impediments to labor market integration in the European Union, despite the formal law of free movement of labor. Using regional data from the EU-15 countries over 21 years, we find that this is the case. We further investigate whether the abolishment of border checks through the Schengen agreement or the introduction of the Euro improved our measure of labor market integration across borders, and do not find evidence in favor. Last, we investigate the role of languages, and potentially cultures, as obstacles to labor market integration. We find that indeed language borders play a larger role than country borders in explaining the lack of labor market integration across borders.

Keywords: Labor market integration; European integration; Spatial econometrics (search for similar items in EconPapers)
JEL-codes: C4 J4 J6 (search for similar items in EconPapers)
Date: 2012-05
New Economics Papers: this item is included in nep-cwa, nep-eec, nep-eur, nep-int, nep-lab and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Journal Article: The role of borders, languages, and currencies as obstacles to labor market integration (2012)
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