Migration
East to West

Migration from the East is a key issue of European integration, particularly as it seems likely that capital mobility and trade liberalization will act too slowly, and hence leave substantial potential for East-West labour migration. In Discussion Paper No. 123, Thomas Bauer and Programme Director Klaus Zimmermann evaluate the potential gains or losses from labour migration for the EU in the face of various policy regimes. They begin with a review of the East-West migration problem and a summary of recent western permanent and temporary migration policies. After providing a disequilibrium framework that accounts for unskilled unemployment, the model is calibrated and compared with an equilibrium framework to provide more sophisticated estimates of the size and direction of migration gains under various behavioural regimes. It is argued that migrating skilled workers who are currently unemployed or underemployed in Central and East European countries (CEECs) may have positive effects on economic welfare in the European Union without harming the sending countries, even if there is unskilled unemployment in the West.

Migration flows from the CEECs to the EU were predicted to be between a low of five million and a more speculative 40 million people (not workers) over a decade. The upper bound is qualified in the paper. Nevertheless, there are large immigration pressures at least in the short run, which may result in illegal immigration if no official channels for labour migration are available. Western Europe must also be prepared for more migration in the long run if the East-West differences in the ageing process prevail, and at least some CEECs are permitted entry to the EU as has been promised. Assuming that future migration streams will flow along ethnic networks, the paper predicts that East-West migration will largely be a German issue.

Integrating the East: The Labour Market Effects of Immigration
Thomas Bauer and Klaus F Zimmermann

Discussion Paper No. 1235, August 1995 (HR)