Labor Market Effects of Open Borders: Evidence from the Finnish Construction Sector after EU Enlargement

104 Pages Posted: 7 Oct 2020 Last revised: 1 Jun 2022

See all articles by Isa Kuosmanen

Isa Kuosmanen

University of Geneva - Geneva School of Economics and Management

Jaakko Meriläinen

ITAM, Centro de Investigación Económica

Date Written: May 30, 2022

Abstract

The eastern enlargement of the EU differentially exposed workers in different regions and occupations in Finland to foreign workforce, in particular to posted workers. Using a triple-differences strategy and detailed individual-level administrative data, we document robust evidence that the entry of new EU countries decreased the annual earnings of vulnerable workers relative to less vulnerable workers in the construction sector. This decrease was persistent even ten years after the enlargement and economically meaningful, about 9 percent (roughly a month’s salary per year), on average. We also show a small increase in unemployment and provide evidence on different adjustment mechanisms.

Keywords: European Union, Labor Mobility, Migrant Workers, Open Borders, Temporary Migration

JEL Classification: C23, J61, J62, J82

Suggested Citation

Kuosmanen, Isa and Meriläinen, Jaakko, Labor Market Effects of Open Borders: Evidence from the Finnish Construction Sector after EU Enlargement (May 30, 2022). Available at SSRN: https://ssrn.com/abstract=3676510 or http://dx.doi.org/10.2139/ssrn.3676510

Isa Kuosmanen (Contact Author)

University of Geneva - Geneva School of Economics and Management ( email )

Uni Mail
Bd du Pont-d'Arve 40
Geneva, 1211
Switzerland

Jaakko Meriläinen

ITAM, Centro de Investigación Económica ( email )

Camino a Santa Teresa No. 930
Col. Héroes de Padierna
Ciudad de México
Mexico

HOME PAGE: http://https://sites.google.com/view/jaakkomerilainen/main

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
263
Abstract Views
1,168
Rank
171,427
PlumX Metrics