A Spatial Perspective on European Integration: Heterogeneous Welfare and Migration Effects from the Single Market and the Brexit

30 Pages Posted: 9 Feb 2017

See all articles by Marcel Henkel

Marcel Henkel

University of Duisburg-Essen - Mercator School of Management

Tobias Seidel

University of Duisburg-Essen - Mercator School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: December 2016

Abstract

We use a quantitative model to study the implications of European integration for welfare and migration flows across 1,318 regions. The model suggests that an increase of trade barriers to the level of 1957 reduces welfare by about 1-2 percent on average, depending on the presumed trade elasticity. However, remote regions may face initial welfare losses of up to 4 percent causing an estimated migration of about 8 million individuals to the European core. This implies that the dismantling of trade barriers in Europe has led to a more homogeneous spatial distribution of economic activity. With regard to the Brexit, we find moderate welfare losses for the UK of -0.44 percent in the most pessimistic scenario while continental Europe’s welfare declines by 0.18 percent. In the most unfavorable scenario, about 500,000 people would leave the UK in the long run.

Keywords: regional integration, labor mobility, spatial inequality

JEL Classification: F100, F120, F150, R110, R120, R130, R230

Suggested Citation

Henkel, Marcel and Seidel, Tobias, A Spatial Perspective on European Integration: Heterogeneous Welfare and Migration Effects from the Single Market and the Brexit (December 2016). CESifo Working Paper Series No. 6289. Available at SSRN: https://ssrn.com/abstract=2914255

Marcel Henkel

University of Duisburg-Essen - Mercator School of Management ( email )

Lotharstraße 65
Duisburg, Nordrhein-Westfalen 47057
Germany

Tobias Seidel (Contact Author)

University of Duisburg-Essen - Mercator School of Management ( email )

Lotharstraße 65
Duisburg, Nordrhein-Westfalen 47057
Germany

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