East European Trade and the Austrian Labour Market

Recent years have seen a major structural break in trade relations between West European countries and the former Eastern bloc. Austria experienced a disproportionately large bilateral trade creation with these countries. In this paper we take a closer look at the impact this trade growth has had on the Austrian labour market. To differentiate as far as possible between different segments of the labour market, we concentrate on unemployment experience and wage growth for a panel of individual workers in Austrian industry. The results show rather small employment effects, the impact on wage growth is more pronounced with interesting modifications for mobile and immobile workers.