Crossing Borders: Labor Market Effects of European Integration

Hannah Illing ()
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Hannah Illing: University of Bonn

No 15930, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 specifically 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 find evidence for slower employment growth (long-term) and slower wage growth (short-term), but no displacement effects for incumbent native workers.

Keywords: out-migration; in-migration; local labor markets (search for similar items in EconPapers)
JEL-codes: J15 J61 R23 (search for similar items in EconPapers)
Pages: 78 pages
Date: 2023-02
New Economics Papers: this item is included in nep-eec, nep-eur, nep-geo, nep-int, nep-lab, nep-mig, nep-tra and nep-ure
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