Working Paper: CEPR ID: DP7274
Authors: Karl Brenke; Mutlu Yuksel; Klaus F. Zimmermann
Abstract: The numbers of migrants from the accessions countries have clearly increased since the enlargement of the EU in 2004. Following enlargement, the net inflow of EU8 immigrants has become 2.5 times larger than the four-year period before enlargement. Poles constitute the largest immigrant group among the EU8 immigrants: since enlargement, 63% of all immigrants and 71% of EU8 immigrants are from Poland. This chapter presents new evidence on the impact of immigrant flow from EU8 countries on the German labor market since EU enlargement. Unlike other EU countries, Germany has not immediately opened up its labor market for immigrants from the new member states. Nevertheless, our analysis documents a substantial inflow and suggests that the composition of EU8 immigrants has changed since EU enlargement. The majority of the new EU8 immigrants are male and young, and they are less educated compared to previous immigrant groups. We also find that recent EU8 immigrants are more likely to be self-employed than employed as a wage earner. Furthermore, these recent EU8 immigrants earn less conditional on being employed or self-employed. Our findings suggest that these recent EU8 immigrants are more likely to compete with immigrants from outside of Europe for low-skilled jobs instead of competing with German natives. While Germany needs high-skilled immigrants, our analysis suggests that the new EU8 immigrants only replace non-EU immigrants in low-skilled jobs. These results underline the importance of more open immigration policies targeting high-skilled immigrants. The current policy not only cannot attract the required high-skilled workforce, but also cannot avoid the attraction of low-skilled immigrants, and is a complete failure.
Keywords: employment; EU enlargement; international migration; wages
JEL Codes: E24; F22; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EU8 immigration (F22) | changes in labor market dynamics in Germany (J29) |
| influx of EU8 immigrants (J69) | changes in employment status, income levels, and self-employment rates (J63) |
| EU8 immigration (F22) | competition with non-EU immigrants for low-skilled jobs (F66) |
| recent EU8 immigrants (J69) | lower average monthly income compared to natives (J79) |
| recent EU8 immigrants (J69) | lower likelihood of being employed compared to natives (J68) |
| recent EU8 immigrants (J69) | higher likelihood of being self-employed relative to natives (J69) |
| current immigration policies (K37) | failure to attract high-skilled workforce in Germany (J69) |