EU Enlargement, Economic Interdependence and the Labor Markets in 'Old' and 'New' Member States

Abstract

We propose a study on the interdependence between 'Old' and 'New' member states, focusing on the labor markets of the enlarged EU over the period 1995-2005. Increased accessibility of detailed sector level labor statistics allows us to shed some new light on the interactions between EU-15 and NMS-5 skill structures and employment levels. We consider trade based linkages and interaction mechanisms across 13 sectors. We focus on the relation between domestic high and low skill employment and foreign wage conditions regarding the two categories of workers. There are signs of possible substitution effects if we consider the relations between domestic EU-15 labor and foreign employment. When looking at the skill structure of employment, the competition among workers in EU15 and NMS occurs within skilled labor category.

Keywords: Employment interdependence, labor markets, EU integration, trade

JEL Classification: C33, F15, F16