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The consistency of EU foreign policies towards new member states
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Abstract
This paper analyses the relation between transfers, migration and income levels. While European countries have been very generous by opening their frontiers to trade, investing in transition countries, and accepting as EU new members some of the latter, their migration policies were less liberal. The policy coherence debate is an old theme in the international economics literature, which is revisited here by looking at the relationships between aid and migration policies towards new member states. Are they substitutes or complements? What happens if eastern European labour markets conditions improve? In theory, potential migrants will stay home, and the concern of being invaded by skilled/unskilled workers searching for better conditions and higher wages in the old member states can be alleviated. But in practice, at low level or revenue in the origin countries, economic progress can result in lowering a budgetary constraint (potential migrants cannot afford the cost of moving), leading to more migration pressures. We therefore compute the critical level of GDP, above which an increase in European transfers and improvement in economic situation of the recipient country will not lead to an increase in migration pressures by decreasing the cost of moving. It amounts to 2837 USforwithinEuropeanmigration.Wearguethatthiscriticallevelisnotthesameforaskilledandforanunskilledindividual.Inotherwords,thecriticalrevenue,underwhichaskilledindividualwithbetteropportunitiesabroaddecidestomigrate,willbehigherthanthecriticalrevenueforanunskilledworker,whomaybebetteroffbystayinghomeandlookingforajobathome:US15085 for the former, and US$ 4384 for the latter. This has an important implication, namely that in some cases, increasing financial transfers will result in increasing the gap between skilled and unskilled departures from countries suffering already from a brain drain phenomena.Aid, Migration, Foreign policy coherence, The consistency of EU foreign policies towards new member states, Economic Papers