Emigration and Labour Market Outcomes in the CEE EU Member States: A Closer Look

University essay from Lunds universitet/Nationalekonomiska institutionen

Abstract: This paper analyses the effects of emigration on unemployment and wages in the ten Central and Eastern European countries that joined the EU in 2004 and 2007. These countries experi-enced large migration outflows following their accession and thus lost a considerable share of their labour force. This presents a good natural experiment to study the impact of emigration on the labour market outcomes in source countries. Our results show a strong negative effect of emigration on total unemployment, with unemployment rate decreasing by 6.7% following an increase in emigration rate by 10%. This total effect is caused by low-skilled emigration, which reduces both low-skilled and high-skilled unemployment; high-skilled emigration, on the other hand, has no effect on unemployment rate of any skill group. However, we did not find any evidence that emigration affects wages in the countries under study.

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