Scandinavian Working Papers in Economics

Working Paper Series, Center for Labor Studies,
Uppsala University, Department of Economics

No 2013:7: 1 Open borders, transport links and local labor markets

Olof Åslund () and Mattias Engdahl ()
Additional contact information
Olof Åslund: Uppsala Center for Labor Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Mattias Engdahl: Uppsala Center for Labor Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: We study the labor market impact of opening borders to low-wage countries. The analysis exploits time and regional variation provided by the 2004 EU enlargement in combination with transport links to Sweden from the new member states. The results suggest an adverse impact on earnings of present workers in the order of 1 percent in areas close to pre-existing ferry lines. The effects are present in most segments of the labor market but tend to be greater in groups with weaker positions. The impact is also clearer in industries which have received more workers from the new member states, and for which across-the-border work is likely to be more common. There is no robust evidence on an impact on employment or wages. At least part of the effects is likely due to channels other than the ones typically considered in the literature.

Keywords: migration policy; immigration; labor market outcomes

JEL-codes: J16; J31; J61

41 pages, April 24, 2013

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