The economic impact of east–west migration on the European Union

• Published in: Empirica Vol. 44; no. 3; pp. 407 - 434
• Main Authors: Kahanec, Martin, Pytliková, Mariola
• Format: Journal Article
• Language: English
• Published: New York Springer US 01-08-2017; Springer Nature B.V
• Subjects: Capital; Capital stock; Econometrics; Economic impact; Economic theory; Economics; Economics and Finance; Employment; European Integration; European Monetary Union; GDP; Gross Domestic Product; Immigration; Industrial Organization; International; International Economics; Macroeconomics/Monetary Economics//Financial Economics; Migration; Original Paper; Per capita; Public Finance; Eastern Europe; Europe; EU enlargement; J61; European single market; East–west migration; Free mobility of workers; J68; Migration impacts; Eastern partnership; J15
• ISSN: 0340-8744; 1573-6911
• DOI: 10.1007/s10663-017-9370-x

This study contributes to the literature on destination-country consequences of international migration, with investigations on the effects of immigration from new EU member states and Eastern Partnership countries on the economies of old EU member states during the years 1995–2010. Using a rich international migration dataset and an empirical model accounting for the endogeneity of migration flows, we find positive and significant effects of post-enlargement migration flows from new EU member states on old member states’ GDP, GDP per capita, and employment rate, and a negative effect on output per worker. We also find small, but statistically significant negative effects of migration from Eastern Partnership countries on receiving countries’ GDP, GDP per capita, employment rate, and capital stock, but a positive significant effect on capital-to-labor ratio. These results mark an economic success of the EU’s eastern enlargements and free movement of workers in an enlarged EU.