How does economic integration influence employment and wages in border regions? The case of the EU enlargement 2004 and Germany’s eastern border

This paper considers the (short-run) employment and wage effects of the 2004 EU enlargement on firms located close to Germany’s eastern border. We use a 50% sample of Germans plants and apply difference-in-differences estimators combined with a matching approach. We evaluate changes in total employment, the employment shares of low-skilled and East European workers and the wages for low-skilled, skilled and high-skilled workers in various sectors. Our results suggest basically no short-run employment effects of the EU enlargement except for firms active in wholesale and retail trade, hotels and restaurants. We also find some evidence for a stronger employment of East European workers in almost all border firms, although the effects are quantitatively small. Negative wage effects are only found for skilled workers in consulting, research and related activities.

[1]  M. Groth,et al.  Angebot an und Nachfrage nach Umweltleistungen in einem marktanalogen Agrarumweltprogramm: Ergebnisse einer Pilotstudie , 2009 .

[2]  J Wagner,et al.  One-Third Codetermination at Company Supervisory Boards and Firm Performance in German Manufacturing Industries: First Direct Evidence from a New Type of Enterprise Data , 2011, SSRN Electronic Journal.

[3]  J Wagner,et al.  The Research Potential of New Types of Enterprise Data Based on Surveys from Official Statistics in Germany , 2009, SSRN Electronic Journal.

[4]  Alexander Vogel,et al.  Exportprämien unternehmensnaher Dienstleister in Niedersachsen , 2009 .

[5]  Alexander Vogel,et al.  Import, Export und Produktivität in niedersächsischen Unternehmen des Verarbeitenden Gewerbes , 2009 .

[6]  Anja Klaubert.  Being religious - A Question of Incentives? , 2009 .

[7]  Heike Wetzel,et al.  The efficiency of German public theaters: a stochastic frontier analysis approach , 2010 .

[8]  Anja Spengler.  The establishment history panel 1975-2005 : handbook version 2.0.0 , 2008 .

[9]  Alan S. Blinder,et al.  Offshoring : The Next Industrial Revolution , 2007 .

[10]  Anja Spengler,et al.  The establishment history panel , 2008 .

[11]  Alexander Vogel,et al.  The German Business Services Statistics Panel 2003 to 2007 , 2009 .

[12]  Stefan Baumgärtner,et al.  What is Sustainability Economics? , 2009 .

[13]  Alexander Vogel.  Exporter performance in the German business services sector , 2011 .

[14]  Exports and Profitability – First Evidence for German Business Services Enterprises , 2010 .

[15]  Alexander Vogel.  Die Dynamik der Export- und Importbeteiligung niedersächsischer Industrieunternehmen im interregionalen Vergleich 2001-2006 , 2009 .

[16]  J Wagner,et al.  Exports and Profitability: First Evidence for German Manufacturing Firms , 2010, SSRN Electronic Journal.

[17]  J Wagner.  Produktdifferenzierung in deutschen Industrieunternehmen 1995 – 2004: Ausmaß und Bestimmungsgründe / Product Diversification in German Manufacturing Enterprises 1995 – 2004: Extent and Determinants , 2008 .

[18]  Gordon H. Hanson.  Regional Adjustment to Trade Liberalization , 1994 .

[19]  Maik Heinemann,et al.  On Entrepreneurial Risk–Taking and the Macroeconomic Effects of Financial Constraints , 2010 .

[20]  Gordon H. Hanson,et al.  Global Production Sharing and Rising Inequality: A Survey of Trade and Wages , 2001 .

[21]  Offshoring and job loss fears: An econometric analysis of individual perceptions , 2012 .

[22]  H. Görg,et al.  Winners and Losers: A Micro-Level Analysis of International Outsourcing and Wages , 2007 .

[23]  Marion König,et al.  Mindestlohneffekte des Entsendegesetzes? Eine Mikrodatenanalyse für die deutsche Bauwirtschaft , 2007 .

[24]  Maik Heinemann,et al.  Stability under learning of equilibria in financial markets with supply information , 2009 .

[25]  Gordon H. Hanson,et al.  Foreign Direct Investment and Relative Wages: Evidence from Mexico&Apos;S Maquiladoras , 1995 .

[26]  Stefan Baumgärtner,et al.  Institutions and preferences determine resilience of ecological-economic systems , 2008 .

[27]  J. Möller,et al.  Impacts of minimum wages: a microdata analysis for the German construction sector , 2009 .

[28]  G. Gandolfo.  International Trade Theory and Policy , 1998 .

[29]  P. Egger,et al.  How international outsourcing drives up Eastern European wages , 2002 .

[30]  N. Braakmann,et al.  The impact of the 2004 EU enlargement on the performance of service enterprises in Germany’s eastern border region , 2010 .

[31]  Michael Moritz,et al.  Labor market effects in the German‐Czech border region: An empirical study using the IAB employment sample (IABS) , 2007 .

[32]  Heike Wetzel.  Productivity Growth in European Railways: Technological Progress,Efficiency Change and Scale Effects , 2008 .

[33]  J. Wagner.  Wer wird subventioniert? Subventionen in deutschen Industrieunternehmen 1999-2006 , 2010 .

[34]  Maik Heinemann.  Messung und Darstellung von Ungleichheit , 2008 .

[35]  Nils Braakmann,et al.  Product diversification and stability of employment and sales: first evidence from German manufacturing firms , 2011 .

[36]  Sebastian Troch.  Drittelbeteiligung im Aufsichtsrat - Gesetzliche Regelung versus Unternehmenspraxis Ausmaß und Bestimmungsgründe der Umgehung des Drittelbeteiligungsgesetzes in Industrieunternehmen , 2009 .

[37]  J Wagner,et al.  Labor Market Adjustments after a Large Import Shock: Evidence from the German Clothing Industry and the Multi-Fibre Arrangement , 2009, SSRN Electronic Journal.

[38]  Alexander Friedrich Eickelpasch,et al.  Determinants of Export Behaviour of German Business Services Companies , 2009 .

[39]  Gordon H. Hanson.  Economic integration, intraindustry trade, and frontier regions , 1996 .

[40]  J Wagner,et al.  Higher productivity in importing German manufacturing firms: self-selection, learning from importing, or both? , 2008, SSRN Electronic Journal.

[41]  J. Wagner,et al.  Export, Import und Produktivität wissensintensiver KMUs in Deutschland , 2008 .

[42]  Stefan Baumgärtner,et al.  Sustainable Use of Ecosystem Services Under Multiple Risks – A Survey of Commercial Cattle Farmers in Semi-Arid Rangelands in Namibia , 2009 .

[43]  Stefan Baumgärtner,et al.  The relationship between intra- and intergenerational ecological justice. Determinants of goal conflicts and synergies in sustainability policy , 2009 .