ENDING RESTRICTIONS TO MIGRATION FROM THE NEW EU MEMBER COUNTRIES: SECTORAL TRADE AND REAL WAGE EFFECTS

Most EU-15 countries have kept restrictions to migration from the new member countries but committed to removing them within seven years from the 2004 enlargement. This article predicts the sectoral trade and real wage impact on high-income, mid-income, and low-income members of removing those restrictions, given two extreme scenarios: either all migrants are skilled or all are unskilled. The main effect of skilled migration is the relocation of high-scale economy, skill-intensive industries from mid-income into high-income countries. The main effect of unskilled migration is the relocation of low-scale economy, low skill-intensive industries from low-income into mid-income countries. Both high-income and low-income members would be better off with skilled migration, but those with mid-income would benefit from unskilled migration. "("JEL "F1, F15, F22, J31, L6)" Copyright 2006 Western Economic Association International.