Resource title

Are there border effects in the EU wage function?

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image for OpenScout resource :: Are there border effects in the EU wage function?

Resource description

We estimate a linear approximation of the market potential function for Europe as derived in geography and trade models. Using a spatial econometric estimation approach, border effects are identified by a differential impact of other regions purchasing power, depending on whether two regions are located within the EU15 or outside the EU15. We find that intra EU15-borders have an insignificant but external borders a significant effect on regional wage structures. We illustrate the magnitude of EU external border effects by simulating the enlargement of the EU in May 2004. Our results suggest a large impact of the border for new member states, but a relatively small one for old members.

Resource author

Peter Huber, Michael Pfaffermayr, Yvonne Wolfmayr

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25925

Resource license

Adapt according to the presented license agreement and reference the original author.