Advanced

The Effect of Emigration on Unemployment in Source Countries: Evidence from the Central and Eastern European EU Member States

Pryymachenko, Yana LU (2011) NEKM01 20101
Department of Economics
Abstract (Swedish)
This paper empirically examines the effect of emigration on unemployment in the CEE coun-tries of the EU during 2000-2007. It is argued that the enlargement of the EU in 2004 can serve as a natural experiment which helps to prevent the endogeneity of emigration to unem-ployment, since the drastic increase in the East-West migration after the enlargement was mainly driven by political events rather than labour market conditions in the source countries. As an additional measure to address the endogeneity issue I apply the instrumental variables technique, using enlargement as one of the instruments and lagged emigration as another one. The results suggest that emigration has a strong negative effect on unemployment. In particular, a 10%... (More)
This paper empirically examines the effect of emigration on unemployment in the CEE coun-tries of the EU during 2000-2007. It is argued that the enlargement of the EU in 2004 can serve as a natural experiment which helps to prevent the endogeneity of emigration to unem-ployment, since the drastic increase in the East-West migration after the enlargement was mainly driven by political events rather than labour market conditions in the source countries. As an additional measure to address the endogeneity issue I apply the instrumental variables technique, using enlargement as one of the instruments and lagged emigration as another one. The results suggest that emigration has a strong negative effect on unemployment. In particular, a 10% increase in emigration rate results in around 4% decrease in unemployment rate. (Less)
Please use this url to cite or link to this publication:
author
Pryymachenko, Yana LU
supervisor
organization
course
NEKM01 20101
year
type
H1 - Master's Degree (One Year)
subject
keywords
instrumental variable, Central and Eastern Europe, unemployment, emigration
language
English
id
1778806
date added to LUP
2011-02-14 08:52:16
date last changed
2011-02-14 08:52:16
@misc{1778806,
  abstract     = {This paper empirically examines the effect of emigration on unemployment in the CEE coun-tries of the EU during 2000-2007. It is argued that the enlargement of the EU in 2004 can serve as a natural experiment which helps to prevent the endogeneity of emigration to unem-ployment, since the drastic increase in the East-West migration after the enlargement was mainly driven by political events rather than labour market conditions in the source countries. As an additional measure to address the endogeneity issue I apply the instrumental variables technique, using enlargement as one of the instruments and lagged emigration as another one. The results suggest that emigration has a strong negative effect on unemployment. In particular, a 10% increase in emigration rate results in around 4% decrease in unemployment rate.},
  author       = {Pryymachenko, Yana},
  keyword      = {instrumental variable,Central and Eastern Europe,unemployment,emigration},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Effect of Emigration on Unemployment in Source Countries: Evidence from the Central and Eastern European EU Member States},
  year         = {2011},
}