Joining the EU: Capital Flows, Migration and Wages

Catia Batista

No 342, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: What is the impact of joining the European Union on a small, less developed economy? This is the general question driving this research paper. In particular, the role of factor movements in explaining real wage behavior in Portugal after its entry in the European Union (EU) is evaluated. Based on these results, counterfactual exercises are performed to measure the impact of foreign investment and emigration on skilled and unskilled wages between 1985 and 1999. We find a small role for labor movements, and a more important one for capital inflows. This should constitute a good starting point to think about the consequences of the Eastern enlargement of the EU and of other integration experiences that abolish barriers to factor mobility.

Keywords: International Migration; Capital Flows; Wages; Skill; Capital-Skill Complementarity; Economic Integration; European Union; Portugal (search for similar items in EconPapers)
JEL-codes: F15 F2 J31 J61 O15 O33 (search for similar items in EconPapers)
Date: 2007-08-01
New Economics Papers: this item is included in nep-eec and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:342

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