The Impact of Economic Integration on Employment – An Assessment in the Context of EU Enlargement

Michael Fertig

No 919, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper is motivated by the idea that the enlargement of the European Union is only one part of an overall process, known as economic integration, which characterizes the involvement of European economies into the global division of labor. Therefore, the paper aims at providing a quantitative and qualitative assessment of the impact of economic integration on employment and labor market dynamics in current EU-member and candidate countries. The ultimate aim of this analysis is the provision of forecasts for future labor market developments in the context of EU-enlargement. To this end, we investigate this nexus not only on an economy-wide level, but analyze whether the impact of integration varies for different sectors (automotive and financial services) of the economy. The estimation results suggest that future integration processes lead to an increase of economywide employment in the accession countries and a small, if any, rise in this outcome variable in the current EU-countries. Moreover, it could be expected that unemployment rates in the accession countries will decline somewhat, whereas those of the current EU-member states will probably experience an increase. Finally, it is very likely that the structure of employment will shift further towards a higher share of service sector employment.

Keywords: factor analysis; panel data; sectoral case studies (search for similar items in EconPapers)
JEL-codes: E24 F02 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2003-10
New Economics Papers: this item is included in nep-eec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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