European Factor Mobility: Trends and Consequences PDF
Preview European Factor Mobility: Trends and Consequences
EUROPEAN FACTOR MOBILITY Also by fan Gordon THE LONDON EMPLOYMENT PROBLEM (with N. Ruck and K. Young) UNEMPLOYMENT, REGIONS AND LABOUR MARKETS (editor) Also by A. P. Thirlwall BALANCE-OF-PA YMENTS THEORY AND THE UNITED KINGDOM EXPERIENCE (3rd edition) FINANCING ECONOMIC DEVELOPMENT GROWTH AND DEVELOPMENT WITH SPECIAL REFERENCE TO DEVELOPING ECONOMIES (4th edition) INFLATION, SAVING AND GROWTH IN DEVELOPING ECONOMIES KEYNES AND THE BLOOMSBURY GROUP (editor with D. Crabtree) KEYNES AND ECONOMIC DEVELOPMENT (editor) KEYNES AND INTERNATIONAL MONETARY RELATIONS (editor) KEYNES AND LAISSEZ-FAIRE (editor) KEYNES AS POLICY ADVISER (editor) REGIONAL GROWTH AND UNEMPLOYMENT IN THE UNITED KINGDOM (with R. Dixon) European Factor Mobility Trends and Consequences Proceedings of the Conference of the Confederation of European Economic Associations, University of Kent at Canterbury, 29 June-3 July 1986 Edited by lan Gordon Professor of Geography University of Reading and Leeturer in the Urban and Regional Studies Unit University of Kent at Canterbury and A. P. Thirlwall Professor of Applied Eeonomies University of Kent at Canterbury Palgrave Macmillan ISBN 978-1-349-10046-0 ISBN 978-1-349-10044-6 (eBook) DOI 10.1007/978-1-349-10044-6 © lan Gordon and A. P. Thirlwall, 1989 Softcover reprint of the hardcover 1s t edition 1989 All rights reserved. For infonnation, write: Scholarly and Reference Division, St. Martin's Press, Inc., 175 Fifth Avenue, New York, N.Y. 10010 First published in the United States of America in 1989 Typeset by Latimer Trend & Company Ltd, Plymouth, Great Britain ISBN 978-0-312-03250-0 Library of Congress Cataloging-in-Publication Data Confederation of European Economic Associations. Conference (1986: University of Kent at Canterbury) European factor mobility: trends and consequences: proceedings of the Conference of the Confederation of European Economic Associations, University of Kent at Canterbury, 29 June-3 July 1986 edited by lan Gordon and A. P. Thirlwall. p. cm. Includes index. ISBN 978-0-312-03250-0 I. Labor mobility-Europe-Congresses. 2. Alien labor-Europe -Congresses. 3. Capital movements-Europe-Congresses. I. Gordon, lan, 1944- . 11. Thirlwall, A. P. 111. Title. HD5764.A6C667 1989 33 l.l2'794-dc20 89-6283 CIP Contents List 0/ the Contributors Vll 1 Introduction 1 fan Gordon and A. P. Thirlwall 2 The Role of International Migration in the Changing European Labour Market 13 fan Gordon 3 A Static Explanatory Model of International Labour Migration to and in Western Europe 30 Willem Molle and Aad van Mourik 4 Post-war Migration between Ireland and the United Kingdom: Models and Estimates 53 Patrick Geary and Cormac 6 Grtida 5 International Migration and Regional Differentials in Unemployment and Wages: Some Empirical Evidence from Finland 59 Tor Eriksson 6 Post-war International Labour Mobility: The Netherlands 74 Joop Hartog and Nick Vriend 7 Theoretical and Empirical Determinants of International Labour Mobility: A Greek-German Perspective 95 Louka T. Katseli and Nicholas P. Glytsos 8 A Counterfactual Study of Economic Impacts of Norwegian Emigration and Capital Imports 116 Christian Riis and Tore Thonstad 9 megal Immigrants and the Informal Economy in Italy 133 Carlo Dell'Aringa and Fabio Neri 10 Foreign Labour, Growth and Productivity: The Case of Switzerland 148 Niklaus Blattner and George Sheldon 11 Europe's Long-term Capital F10ws since 1971 166 M. Panie and C. Schioppa 12 Restrictions on International Capital F1ows: The Case of Italy 195 S. Micossi and S. Rossi v VI Contents 13 International Capital Movements and Trade in an Intertemporal Setting 215 Hans-Jürgen Vosgerau 14 Determination of Exchange Rates and Capital F10ws for OECD Countries 233 Wilhelm Krelle and Heinz Welsch Author Index 251 Subject Index 255 List of the Contributors Professor Carlo Deli' Aringa, Universita Cattolica deI Sacro Cuore, Milan, Italy Professor Niklaus Blattner, Labour Market Research Institute, University of Basel, Switzerland Dr Tor Eriksson, Department of Economics, Abo Akademi, Finland Professor Patrick Geary, Department of Economics, Maynooth College, Eire Dr Nicholas P. Glytsos, Centre of Planning and Economic Research, Athens, Greece Professor lan Gordon, Department of Geography, University of Reading, England Professor Joop Hartog, Faculty of Economics, University of Amsterdam, The Netherlands Dr Louka T. Katseli, Centre of Planning and Economic Research, Athens, Greece Professor Wilhelm Krelle, Faculty of Economics, University of Bonn, Ger many Dr S. Micossi, Bank of Italy, Rome, Italy Professor Willem Molle, Faculty of Economics, University of Limburg, The Netherlands Mr Aad van Mourik, Faculty of Economics, University of Limburg, The Netherlands Professor Fabio Neri, Department of Economics, University of Trieste, Italy Dr Cormac Ö Gritda, Department ofEconomics, University College, Dublin, Eire VII Vlll List 01 the Contributors Dr M. Panic, Department of Applied Economics, University of Cambridge, England Mr Christian Riis, Institute of Economics, University of Os10, Norway Mr S. Rossi, Bank of Italy, Rome, Italy Mr C. Schioppa, Department of Applied Economics, University of Cam bridge, England Mr George Sheldon, Labour Market Research Institute, University of Basel, Switzerland Professor A. P. Thirlwall, Keynes College, UniversitY'ofKent at Canterbury, England Professor Tore Thonstad, Institute of Economics, University of Os10, Nor way Professor Hans-Jürgen Vosgerau, Faculty of Economics and Statistics, University of Konstanz, Germany Mr Nick Vriend, Faculty of Economics, University of Amsterdam, The Netherlands Dr Heinz Welsch, Faculty of Economics, University of Bonn, Germany 1 Introduction lan Gordon and A. P. Thirlwall Free movement of the primary factors of production, labour and capital, as weIl as free trade in products, has been a basic tenet of the European Economic Community ever since its inception. In each case, neo-classical economic theory underwrote expectations of gains to all nations from the removal of barriers to movement, while its promise of factor price equalisa tion implied a closing ofincome gaps within Europe. Thirty years on many of these expectations persist, although they have always been challenged by a riyal body of theory which has adopted a more concrete approach to the production process and the operation of factor markets, and envisages weaker economies losing out through 'cumulative causation'. Experience over these years has not effectively resolved the issue ofhow actual economic performance has been altered as a result of the freeing-up of factor movements. With the latest enlargement of the Community to Twelve through the entry of more labour-rich Mediterranean nations (and the prospective accession of Turkey), and with the imminence of '1992' and monetary union, this remains a vital question. Wh ether the experience either of the 1960s era of sustained growth and labour shortage, or that of the decade of crisis following the 1973 oil-price increase, is directly relevant to the situations to be faced in the 1990s, for which a new emphasis on ftexibility is forecast, is aseparate but equally vital question. This collection of papers, by economists from a dozen European countries represented at the Canter bury symposium of the Confederation of European Economic Associations in 1986, is addressed essentially to the first of these questions. The majority of the papers represent analyses of particular national' experiences of labour andjor capital mobility over the past three decades, which are complemented by cross-national reviews and so me new theoretical work. In the case of labour mobility the European Community's commitment is essentially to the free movement of indigenous labour between states within the Community. The basis for this policy can be found in articles 48-51 ofthe Treaty of Rome, and practical steps to this end have been adopted since 1961. As Böhning (1972) has pointed out, the policy was 'little more than a liberal~apitalist prescription for bringing man power shortages and sur pluses into balance within a given free trade area', and he quotes the responsible Commissioner as emphasising the need 'to limit maximally the possibility ofuncontrolled and useless movements' (ibid. p. 10). Indeed at the outset the procedure authorised offers of employment to other EEC natio nals only when a vacancy had remained unfilled for three weeks. Subsequent
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