Labour markets and migrations in an integrated European economy.

Summary This thesis focuses on the transformations brought by European integration to a wide range of public policy issues such as education, working conditions, wages or relocation. To this end, theoretical and empirical methods are used, including the analysis of large databases at the micro level. Business cycles and education are two important elements in understanding labor mobility in Europe. The first chapter proposes a two-country overlapping generations model with heterogeneous agents and economic fluctuations to reassess the importance of labor mobility as an adjustment mechanism in a currency area. He shows that, with mobile agents, asymmetric short-term shocks lead to a general increase in the skill level of workers. Indeed, in a depressed economy, the possibility of migrating is a paying option that reinforces the incentives to educate oneself. Some of the assumptions and results of the theoretical model are confirmed empirically. A simulation illustrates some of the properties of the model, such as the persistence of cyclical shocks and the trade-off between increasing skill levels and increasing migration flows. Other effects of worker mobility are developed in the second chapter. Although the EU enlargements in 2004 and 2007 resulted in an instantaneous removal of trade barriers, Western European labor markets were only gradually opened to Eastern European workers. We use this lag to suggest that the wave of migration that followed this opening reduced relocation to the West. Indeed, it became easier to employ low-skilled Eastern European workers. The third chapter focuses on the consequences of European enlargement for the new member states. We use a new worker-level database of nine Central and Eastern European countries to explore the effects of the trade liberalization that accompanied integration on wages and working conditions. Our results show a decline in wages and a deterioration in working conditions, which are amplified by the erosion of protective labor market institutions.