Block Benefits, Not Immigrants

As EU enlargement approaches, people across Western Europe fear a flood of job-seeking immigrants from the postcommunist accession countries. Indeed, if all eight of the top East European candidates (excluding Bulgaria and Romania) join by the target date of 2004, the EU population's will soar by about 75 million people.

When Spain and Portugal joined the EU two decades ago, emigration to existing member states was lessened by the fact that many immigrants had arrived from these countries during Europe's go-go 1960s. But migration from Eastern Europe in those years was blocked by the Iron Curtain. Now the income gap between eastern applicants and the EU is three times as large as the disparity with the Iberian peninsula was. Munich's Ifo Institute expects about 2.5--3.3 million migrants to Western Europe during the 15 years following EU enlargement.

These are big numbers, but there is little or no reason for fear-not if today's EU members prepare. Unlike immigration from non-European countries, East European immigrants share a similar cultural background and will assimilate easily.

In principle, with flexible labor markets, migration creates welfare gains for all countries. Emigration countries gain because their nationals can earn an income in Western Europe that, for all but the most marginal migrant, is more than sufficient to compensate for the loss of domestic value added and the subjective and objective costs of migration. Immigration countries gain because all but marginal migrants produce more value added than they get back in wages. While blue-collar workers incur income losses, their losses will be overcompensated by the gains of landowners, capital owners, entrepreneurs and white collar workers.