Economic impact of migration flows following the 2004 EU enlargement process : a model based analysis

This paper shows that the migration-induced re-allocation of labour resources across countries following the 2004 EU enlargement process has already brought sizeable economic benefits for the enlarged EU. In addition, the simulation results suggest that once the present temporary restrictions on the flow of EU10 workers come to an end and the long-run migration potential of around 3 million is eventually realised, the economic gains may easily match those from a further integration of the EU's goods and capital markets. At the level of the individual "sending" and "receiving" countries, the overall economic impact of migration is essentially determined by the speed of adjustment of labour and capital; by the skill characteristics of the migrant and native populations; and by the actual size of the migration flows. Whilst the results at the total economy level suggest that the individual EU10 and EU15 countries can all gain from facilitating migration, at the level of specific skill groups there is the potential for income losses for the low skilled in the "receiving" countries and for medium to high skilled workers in the "sending" countries.