Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement

We build a multicountry dynamic general equilibrium model to study the economic effects of the 2004 enlargement of the European Union. In our model, trade is costly and households of different skills and nationalities face costly forward-looking migration decisions. We exploit the timing of migration policy changes to identify the changes in migration costs. We find that the changes in migration and trade policy resulted in aggregate welfare gains but with heterogeneous effects across skill groups. We study the interaction between trade and migration policies and highlight the importance of trade for quantifying the welfare and migration effects of labor market integration.

© 2021 Journal of Political Economy

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Work Title Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement
Access
Open Access
Creators
  1. Lorenzo Caliendo
  2. Luca David Opromolla
  3. Fernando Parro
  4. Alessandro Sforza
License CC BY-NC 4.0 (Attribution-NonCommercial)
Work Type Article
Publisher
  1. University of Chicago Press
Publication Date December 1, 2021
Publisher Identifier (DOI)
  1. 10.1086/716560
Source
  1. Journal of Political Economy
Deposited September 22, 2022

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Version 1
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  • Created
  • Added COPS-1.pdf
  • Added Creator Lorenzo Caliendo
  • Added Creator Luca David Opromolla
  • Added Creator Fernando Parro
  • Added Creator Alessandro Sforza
  • Published
  • Updated Work Title, Description Show Changes
    Work Title
    • Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement
    • ! Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement
    Description
    • <p>We build a multicountry dynamic general equilibrium model to study the economic effects of the 2004 enlargement of the European Union. In our model, trade is costly and households of different skills and nationalities face costly forward-looking migration decisions. We exploit the timing of migration policy changes to identify the changes in migration costs. We find that the changes in migration and trade policy resulted in aggregate welfare gains but with heterogeneous effects across skill groups. We study the interaction between trade and migration policies and highlight the importance of trade for quantifying the welfare and migration effects of labor market integration.</p>
    • We build a multicountry dynamic general equilibrium model to study the economic effects of the 2004 enlargement of the European Union. In our model, trade is costly and households of different skills and nationalities face costly forward-looking migration decisions. We exploit the timing of migration policy changes to identify the changes in migration costs. We find that the changes in migration and trade policy resulted in aggregate welfare gains but with heterogeneous effects across skill groups. We study the interaction between trade and migration policies and highlight the importance of trade for quantifying the welfare and migration effects of labor market integration.
  • Updated Work Title Show Changes
    Work Title
    • ! Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement
    • Goods and Factor Market Integration: A Quantitative Assessment of the EU Enlargement