Labour Mobility within the EU in the Context of Enlargement and the Functioning of the Transitional Arrangements

This study analyses the effects and extent of migration since enlargement in 2004. It finds that the opening of the labour market in the wake of the EU Eastern enlargement has led to a marked increase in immigration in the core countries: between 2004 and 2007, roughly 1 million people migrated from the new member countries to the EU 15, and another 1.2 million from Bulgaria and Romania, although they have not yet been EU members. The diverse ways of implementing free movement during the transitional periods of labour had a strong effect on the regional distribution of migration. From 2004 to 2007, for instance, 70 percent of migrants from the eight Eastern European countries immigrated to the UK and Ireland, which had opened their labour markets to the new member countries immediately in 2004. On the other hand, 80 percent of the immigration from the accession countries joining the EU in 2007 – Romania and Bulgaria – is accounted for by Spain and Italy which had already partially granted these states freedom of movement. According to the study's estimates, the stock of immigrants from the new EU countries in the EU 15 is likely to double over a period of about 12 years. The study also finds that immigration from the eight Eastern European EU countries has raised the GDP of the EU by 0.2 percent or € 24 billion since 2004. On account of expected future migration from these countries, the European GDP will rise again by just short of € 22 billion by 2011. If freedom of movement were introduced in all European countries as of 2009 the effect would be roughly 10 percent higher. At the same time there could be a distinct rise in immigration to Germany and Austria. While the labour market effects are by and large neutral in the long term, the unemployment rate is slightly decreasing in the sending and slightly increasing in the receiving countries in the short term. Foreign workers and less-skilled workers are mainly affected in receiving countries, while high-skilled workers tend to benefit there.