TY  - JOUR
AU  - Krueger,Alan B.
TI  - From Bismarck to Maastricht: The March to European Union and the Labor Compact
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7456
PY  - 2000
Y2  - January 2000
UR  - http://www.nber.org/papers/w7456
L1  - http://www.nber.org/papers/w7456.pdf
N1  - Author contact info:
Alan B. Krueger
Industrial Relations Section
Firestone Library
Princeton University
Princeton, NJ 08544
Tel: 609/258-4046
Fax: 609/258-2907
E-Mail: akrueger@princeton.edu
AB  - This paper considers the likely impact that European Union (EU) will have on the labor compact.  It is argued that, despite increased economic integration in Europe, countries will still be able to maintain distinct labor practices if they are willing to bear the cost of those practices.  The incidence of many social protections probably already falls on workers.  In addition, it is argued that imperfect mobility of capital, labor, goods and services will limit the pressure that integration will place on the labor compact.  Evidence is presented suggesting that labor mobility among EU countries has not increased after the elimination of remaining restrictions on intra-EU labor mobility in 1993.  Moreover, immigration from non-EU countries, which is much larger than intra-EU migration, has declined since 1993. Evidence is also reviewed suggesting that the demand for social protection rises when countries are more open, and therefore subject to more severe external shocks.  This finding suggests that increased economic integration and European Monetary Union could lead to greater demand for social protection.  The U.S. experience with state workers' compensation insurance programs is offered as an example of enduring differences in labor market protections in highly integrated regional economies with a common currency.
ER  -