Labor Market Effects of Economic Integration - The Impact of Re-Unification in German Border Regions

Arbeitspapier

The paper argues that economic integration causes problems for the labor market of high-wage countries due to cross-border labor mobility and the accompanying increase in labor supply. Empirical evidence is provided from an analysis of regional labor market effects of German re-unification. In the aftermath of the re-unification shock, despite some gain in employment, border regions situated on the former German-German border are found to have experienced a fall in the relative wage position and an increase in unemployment relative to other West-German regions. As this points to adverse labor supply effects for resident workers due to cross-border labor mobility, this result is bad news for EU regions situated on the border with the Accession countries in Central and Eastern Europe.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1179

Classification and Topics

• Classification: Wirtschaft ; Economic Integration ; Geographic Labor Mobility; Immigrant Workers ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Subject: economic integration ; border regions ; EU enlargement ; German re-unification ; differences in differences estimation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Büttner, Thiess ; Rincke, Johannes
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/76464
• Last update: 10.03.2025, 11:44 AM CET