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Enlargement of the EU Eastwards: A New Estimate of Potential Migration

Press Release of February 18, 2004

A Report by DIW Berlin for the European Commission

In a study for the European Commission, “Potential Migration from Central and Eastern Europe into the EU-15 - An Update”, the Deutsches Institut für Wirtschaftsforschung (DIW Berlin) has updated its research results and examined the effects of different transition periods for the free movement of people.
The study reaches the following conclusions:

In the hypothetical case of free movement being introduced straightaway in 2004 for all ten accession countries in central and eastern Europe (CEEC-10, including Bulgaria and Romania), Germany could expect a net inflow of 180,000 persons from these countries in the first year. The net inflow would reach its peak a year after the introduction of free movement at 225,000. About 25 years later the level of foreign residents from the CEEC-10 would settle at about 2.0 to 2.8 million people. At present 600,000 people from these countries are already living in Germany, so that the new level would represent a further inflow of between 1.4 and 2.2 million.

An extrapolation of these figures to the EU-15 shows an initial net inflow of 294,000, which would reach its peak at 370,000. The long-term potential migration into the EU-15 is estimated at 3.8 million. After Germany, which currently accounts for around 60 percent of the immigrants from the accession countries, Italy (11 percent) and Austria are the main target countries for these migrants.

Delaying the migration by fully exploiting the permitted transition period of seven years for free movement will only reduce the long-term potential migration within the EU by a few thousand. That is because the gap in per capita incomes will not be greatly reduced during that period, so that the incentive to migrate will remain. To avoid short-term friction on the labour markets it would be better for Germany to open its labour market partially to incomers from the CEEC during the transition period, in order successively to reduce the potential migration.

The results of the study by DIW Berlin confirm the projections in a study by the European Integration Consortium in 2001 for the European Commission, which was directed by DIW Berlin. This study estimated the initial inflow into the EU-15 at 335,000 persons, and the long-term potential migration from the CEEC-10 at 3.9 million. A test of a large number of forecasting methods shows that estimating procedures that take socalled fixed effects into account are clearly superior to other procedures. That is because fixed factors, like distance, geographical position, culture and language, greatly influence migration between countries. Methods that do not take these factors into account not only give distorted and inconsistent results, their forecasting ability also comes off badly. Although a growing number of the studies are forecasting similar figures for potential migration all the estimates contain considerable uncertainty. That is due to methodological problems and the particular historical situation in the accession countries. Hence, the actual migratory flows can differ considerably from the estimates. It must also be borne in mind that the real migratory flows can be subject to strong cyclical fluctuations. The projections presented here should therefore be understood as an indication of the size of the potential migration, not as exact prognoses.
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