EU Enlargement: Migration flows from Central and Eastern Europe into the Nordic countries - exploiting a natural experiment

In this paper we look at migration flows from 10 Central and Eastern European Countries (CEEC) to 5 Nordic countries over the years 1985 – 2007. We exploit a natural experiment that arose from the fact that while Sweden opened its labour market from the day one of the 2004 EU enlargement, and Finland and Iceland from year 2006, the other Nordic countries chose a transition period in relation to the “new” EU members. The results based on a differences-in-differences estimator show that the estimated effect of the opening of the Swedish, Finnish and Icelandic labour markets on migration from the CEECs that entered the EU in 2004 is not significantly different from zero. However, the effect of the opening of the Swedish and Finnish labour markets in 2007 on migration from the 2007 EU entrants, Bulgaria and Romania, is significantly positive. Further, we are interested in the overall effect of the “EU entry” on migration. Therefore we look at migration flows from CEECs during the first round of EU enlargement towards the East in 2004 and compare them with migration flows from Bulgaria and Romania. The estimated effect from our D-in-D analyses is positive and significant in all model specifications.