Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2011:32: The Effect of Emigration on Unemployment: Evidence from the Central and Eastern European EU Member States

Yana Pryymachenko (), Klas Fregert () and Fredrik N. G. Andersson ()
Additional contact information
Yana Pryymachenko: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Klas Fregert: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Fredrik N. G. Andersson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: This paper contributes to the scant empirical literature on the effects of emigration on source countries’ labour markets. Using a novel dataset by Brücker et al. (2009), we investigate whether emigration from the Central and Eastern European (CEE) members of European Union (EU) during the period 2000 to 2007 has contributed to the decline in unemployment observed in these countries. We find that along with structural changes that occurred in the CEE economies during the last decade, emigration indeed had a strong negative effect on unemployment in these countries. A 10 per cent increase in emigration rate leads to around 5 per cent decrease in unemployment rate. Given the minor effect of immigration on host countries’ unemployment found in the literature (including the studies examining the East-West European migration), this paper’s results indicate that the opening up of labour markets following the enlargement of EU in 2004 mainly has had positive effects.

Keywords: emigration; unemployment; Central and Eastern Europe

JEL-codes: J21; J31; J61

17 pages, October 6, 2011

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