The labor market effects of worker outflow: Evidence from Hungary

Attila Lindner (), Balázs Reizer () and Andrea Weber ()
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Attila Lindner: University College London; ELTE Centre for Economic and Regional Studies; IFS; IZA
Balázs Reizer: ELTE Centre for Economic and Regional Studies; Corvinus University of Budapest
Andrea Weber: CEU; CEPR; RFBerlin

No 2514, KRTK-KTI WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: We investigate how a large-scale outflow of workers affect the reaming workforce. We use Hungarian administrative social security data on the opening of the Austrian labor market to Hungarian workers as a natural experiment. We find that the opening of the Austrian border increased wages by 1 percent and decreased employment by 5 percent in the close neighborhood of the Hungarian side of the border. We also show that the outflow of workers slightly decreased the quality of the remaining workforce in Hungary. Furthermore, we show that Austrian labor demand shocks have a positive impact on Hungarian wages as the increase of vacancies in Austria increases the wages on the Hungarian side of the border.

Keywords: Labor demand; migration (search for similar items in EconPapers)
JEL-codes: F22 J23 (search for similar items in EconPapers)
Date: 2025-09
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