Huber, P; Brücker, H; Köllö, J; Traistaru, J; Mickiewicz, T; (2002) Regional and labour market development in candidate countries: a literature survey. (AccessLab: Regional Labour Market Adjustments in the Accession Candidate Countries Workpa , pp. ? - ? ). Österreichisches Institut für Wirtschaftsforschung (WIFO): Vienna, Austria.

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Abstract

There has been substantial convergence of candidate countries to Western European institutions and labour market outcomes. Despite this, the labour markets in the candidate countries have their individual features: long and persistent reductions in employment rates as well as a higher incidence of long-term unemployment; more severe mass redundancy regulations and weaker trade unions and social partnership organisations; low turnover in and out of unemployment; and declining internal migration. Accession will trigger institutional changes by the social acquis, environmental and competition policy as well as – at a later stage – accession to EMU, the impact of the EU's structural policy on the candidate countries, and changes in trade, foreign direct investment and migration. In assessing the consequences of these changes, literature is far from unanimous, but some hypotheses can be developed: 1. Integration will have important structural and distributional effects and positive aggregate effects. 2. The capability of labour markets to adjust to such shocks will determine the labour market outcomes of integration. 3. Extrapolating purely from the current labour market dynamics to a time after enlargement may lead to misinterpretations, since "adjustment mechanisms" are endogenous. 4. National policy decisions and use of structural funds are a key in triggering regional convergence. Regional issues should be given attention when analysing integration effects. Experience from previous enlargements suggests that convergence is far from automatic after accession. Policy takes a decisive role in determining the outcomes. Regional development in candidate countries suggests some potential for further divergence.

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