Abstract
While European countries have been very generous by opening their frontiers to trade, investing in transition countries, and accepting as EU new members some of the latter, their migration policies were less liberal. The policy coherence debate is an old theme in the international economics literature, which is revisited here by looking at the relationships between aid and migration policies towards new Member States. Are they substitutes or complements? What happens if eastern European labour markets conditions improve? In theory, potential migrants will stay home, and the concern of being invaded by skilled or unskilled workers searching for better conditions and higher wages in the old Member States can be alleviated. But in practice, at low levels of income in the origin countries, economic progress can result in lowering the budget constraint of moving, leading to more migration pressures. We therefore compute the critical level of GDP, above which an increase in transfers and improvement in the economic situation will not lead to an increase in migration. It amounts to USD 2,837 for migration within Europe. We argue that this critical level is not the same for a skilled and unskilled individual. The critical income level, under which a skilled individual with better opportunities abroad decides to migrate, will be higher than for an unskilled worker, who may be better off by staying and looking for a job at home: USD 15,085 for the former, and USD 4,384 for the latter. This has important implications, namely that in some cases, more financial transfers will result in increasing the gap between skilled and unskilled departures from countries already suffering from a brain drain.
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Notes
- 1.
The Central and Eastern European countries referred at in this contribution are Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Slovenia, Hungary, Croatia, Romania and Bulgaria. The Central European countries are Poland, Czech Republic, Slovakia, Slovenia and Hungary, while the Eastern European countries refer to the six remaining.
- 2.
For an interesting application of this assumption to Russia and Russian inter-regional mobility, see Andrienko and Guriev (2004).
- 3.
Due to lack of information, particularly for developing countries, variables for wages, unemployment (even if both reflect imperfectly employment opportunities), tax and social security systems have not been included.
- 4.
The threshold can be derived using the following formula: log(critical threshold)=(2.946−1.450)/(2×0.086).
- 5.
EFTA: European Free Trade Association. At a certain moment following countries were member: Austria, Denmark, Norway, Portugal, Sweden, Switzerland, the United Kingdom, Finland, Iceland, Liechtenstein.
- 6.
France, Germany, Italy, Belgium, the Netherlands and Luxembourg.
- 7.
The large majority of workers who benefit from bilateral employment agreements with Member States of the European Union are seasonal workers, mainly Polish, employed in Germany.
- 8.
This threshold is easy to compute as the half of the ratio of the parameter of GDP per capita to the parameter of the squared GDP per capita.
- 9.
Hatton and Williamson (2002) use the Gini coefficient as a proxy for the return to skills. A low Gini index suggests a more evenly income or wealth distribution.
- 10.
Those results corroborate the finding of Gudrun Biffl (2001, p. 159) that EU citizens working in another EU country are increasingly highly skilled. The mobility of people with “high and specialized skills, in particular in the information-communication technology field, has increased. This does not mean, however, that unskilled labour migration has come to a halt in Western Europe. It is still the major group of migrants in Western Europe. The source countries of un- and semi-skilled migrants changed, however, as the supply of these skills dried up in less developed regions of the EU as a result of human resource and economic development.”
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Acknowledgments
We are grateful to Alba Lorena Arbelaez Toro for her excellent research assistance.
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Berthélemy, JC., Maurel, M. (2010). The Consistency of EU Foreign Policies Towards New Member States. In: Keereman, F., Szekely, I. (eds) Five Years of an Enlarged EU. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-12516-4_6
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