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by Richard Lyon
In light of resent discussions here about the issues of labor migration between EU countries I decided to undertake a small research project. Like water flowing down hill, it is a relative difference in income and economic opportunity that provides a primary incentive for workers to relocate from one area to another. The larger the size of that gap the greater the flow of migration is likely to be. This is a situation that has occurred many times in history and has often been accompanied by significant cultural and political upheaval.
Historically and presently there is a sizable economic gap between the countries in northwestern Europe and those to the east that were under Soviet control during the cold war. When several of these countries were admitted to EU membership there was considerable concern that giving their citizens immediate full access to western labor markets would produce unmanageable economic problems. The treaties were negotiated on the basis of allowing western governments the option of delaying full integration. The theory was advanced that as a result of having some access to other EU markets and by being the recipients of economic development funds the gap would be narrowed and unmanageable disruptive migrations avoided. Sounds nice. I decided to take a stab at looking at what has actually happened over the course of the past two years. I collected per capita income figures from the World Bank for the years 2003, 2004, and 2005. This involved transcription from different PDF files so I don't have a single tidy link for the data. I decided to use the PCI for the UK as a basis for comparing change for the new member countries. It is one of the more prosperous western economies and it has opened its labor markets to the new members with a resulting influx greater than anything that was anticipated. There is data on 7 of the 10 countries admitted in 2004 and then data on Bulgaria and Romania which are scheduled to be admitted in 2007. From the front page - whataboutbob
Obviously this is a single metric pulled out of a complex economic nexus. Each of these countries has different economies, cultures and histories. The results can at be suggestive of trends and not proof of what is going to happen in the future.
Country 2003PCI %UK 2004PCI %UK 2005PCI %UK Change UK 28,320 100 33,940 100 37,600 100 --- Ch R 7190 25,.39 9150 26.96 10,710 28.48 3.10
Est 5380 19.00 7010 20.65 9100 24.20
Hung 6360 22.46 8270 24.37 10,030 26.68
Lith 4540 16.03 5740 16.91 7050 18.75
Pol 5280 18.64 6090 17.94 7110 18.91
Slo R 4970 17.55 6480 19.09 7950 21.14
Slov 11870 41.91 14810 43.64 17350 46.14
Bulg 2120 7.49 2740 8.07 3450 9.18
Rom 2260 7.98 2920 8.60 3830 10.19 This does not look like dramatic progress. Bulgaria and Romania have made more relative progress without being in the EU than Poland which has essentially made none. If you project this rate of narrowing the gap over the remaining four years in which restricted labor markets are permitted, there would still be a large gap at the end of that period. The magic of EU membership doesn't seem to be producing much relative progress in per capita income. |
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***European Income Gap | 121 comments (121 topical, 0 editorial, 0 hidden)
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