Eastern Enlargement of the EU: A Comprehensive Welfare Assessment

Arbeitspapier

This paper takes a welfare-view on eastern enlargement of the EU, focusing on incumbent countries. Enlargement is decomposed into three elements: Single-market integration on commodity markets, budgetary costs from EU-expenditure policies, and singlemarket- induced migration from new to present member countries. I first use an analytical model to derive a welfare equation that identifies the principle channels for incumbent country welfare gains and losses from enlargement, including product differentiation, capital accumulation, and unemployment due to search-costs. I then propose a method that allows to extend welfare results obtained from a detailed calibrated version of this model for Germany to other incumbent countries. The approach relies on model elasticities extracted from the German model which are then applied to other countries´ idiosyncratic "enlargement-shocks". Constructing detailed indices for such country specific "enlargement-shocks", I arrive at characteristic inter-country pattern of enlargement- induced welfare effects for all EU15 countries. Aggregating these across countries reveals enlargement to be beneficial for the union as a whole, although several countries stand to suffer welfare losses.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: HWWA Discussion Paper ; No. 260

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; International Migration ; International Economic Order and Integration ; Economic Integration ; Trade Policy; International Trade Organizations
• Subject: EU Enlargement ; Economic Integration ; Commercial Policy ; Migration ; Welfare Analysis ; Computable General Equilibrium ; Search Unemployment ; EU-Erweiterung ; Wohlfahrtseffekt ; Allgemeines Gleichgewicht ; EU-Binnenmarkt ; Öffentlicher Haushalt ; Internationale Arbeitsmobilität ; Theorie ; EU-Staaten ; Osteuropa

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kohler, Wilhelm K.
• Event: Veröffentlichung
• (who): Hamburg Institute of International Economics (HWWA)
• (where): Hamburg
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/19232
• Last update: 10.03.2025, 11:45 AM CET