EU Enlargement Under Continued Mobility Restrictions: Consequences for the German Labor Market

32 Pages Posted: 24 Mar 2009

See all articles by Karl Brenke

Karl Brenke

German Institute for Economic Research (DIW Berlin) - Public Economics

Mutlu Yuksel

Dalhousie University; IZA

Klaus F. Zimmermann

Global Labor Organization (GLO); UNU-MERIT; Maastricht University, Department of Economics; Free University Berlin; University of Bonn; Centre for Economic Policy Research (CEPR); Journal of Population Economics

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Abstract

The numbers of migrants from the accessions countries have clearly increased since the enlargement of the EU in 2004. Following enlargement, the net inflow of EU8 immigrants has become 2.5 times larger than the four-year period before enlargement. Poles constitute the largest immigrant group among the EU8 immigrants: since enlargement, 63% of all immigrants and 71% of EU8 immigrants are from Poland. This chapter presents new evidence on the impact of immigrant flow from EU8 countries on the German labor market since EU enlargement. Unlike other EU countries, Germany has not immediately opened up its labor market for immigrants from the new member states. Nevertheless, our analysis documents a substantial inflow and suggests that the composition of EU8 immigrants has changed since EU enlargement. The majority of the new EU8 immigrants are male and young, and they are less educated compared to previous immigrant groups. We also find that recent EU8 immigrants are more likely to be self-employed than employed as a wage earner. Furthermore, these recent EU8 immigrants earn less conditional on being employed or self-employed. Our findings suggest that these recent EU8 immigrants are more likely to compete with immigrants from outside of Europe for low-skilled jobs instead of competing with German natives. While Germany needs high-skilled immigrants, our analysis suggests that the new EU8 immigrants only replace non-EU immigrants in low-skilled jobs. These results underline the importance of more open immigration policies targeting high-skilled immigrants. The current policy not only cannot attract the required high-skilled workforce, but also cannot avoid the attraction of low-skilled immigrants, and is a complete failure.

Keywords: wages, international migration, EU enlargement, employment

JEL Classification: J61, F22, E24

Suggested Citation

Brenke, Karl and Yuksel, Mutlu and Zimmermann, Klaus F., EU Enlargement Under Continued Mobility Restrictions: Consequences for the German Labor Market. IZA Discussion Paper No. 4055, Available at SSRN: https://ssrn.com/abstract=1366583

Karl Brenke (Contact Author)

German Institute for Economic Research (DIW Berlin) - Public Economics ( email )

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Mutlu Yuksel

Dalhousie University ( email )

Halifax, Nova Scotia B3H 3J5
Canada

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IZA ( email )

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Klaus F. Zimmermann

Global Labor Organization (GLO) ( email )

Bonn
Germany

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UNU-MERIT ( email )

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Maastricht University, Department of Economics ( email )

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University of Bonn

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Germany

Centre for Economic Policy Research (CEPR)

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United Kingdom

Journal of Population Economics

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