## _wp08264 - References

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### I. INTRODUCTION — role of cross-border labor mobility in NMS convergence
- Scope: NMS = Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic, and Slovenia.
- Modes of cross-border labor provision: physical migration (change of permanent residence), participation in foreign labor markets (seasonal, temporary, irregular flows).
- Key findings:
  - Enhanced labor mobility speeds up convergence and helps boost economy-wide capital-labor ratios.
  - Migration moderates the boom in nontradable prices and the buildup of the current account deficit during convergence.
  - Restricting labor mobility is not an effective response to overheating; mobility tends to cushion rather than amplify pressures.
  - Over the medium term, second-round effects of wage inflation associated with outward labor flows need to be avoided to prevent erosion of competitiveness.
  - Sustained growth requires mobilizing and utilizing labor better (including fostering labor force participation) and addressing mismatches from age and skill composition of flows.

### II. CROSS-BORDER LABOR FLOWS — measurement, patterns, and destinations
- Measurement challenges:
  - Registration systems tied to permanent residency may underestimate flows; censuses and labor force surveys may miss temporary/irregular flows.
  - Recipient-country administrative systems can double count and suffer comparability problems.
- Patterns and magnitudes:
  - Net migration rates (Table 1, 1992–2007): Baltics experienced strongly negative net migration during early transition; Bulgaria, Poland, Romania also had high negative net migration rates; Czech Republic, Hungary, Slovenia had positive average migration balances.
  - Post-2004 gross emigration: stock of foreign residents from NMS-8 in EU-15 increased by about 200,000-250,000 per year since the first EU enlargement, representing a cumulative 1.5 percent of source countries’ total population since 2004.
  - Latvia, Lithuania, and Poland had higher-than-average gross emigration rates.
- Destination-choice determinants:
  - Timing of labor-market opening and language barriers mattered; Ireland and the United Kingdom recorded large inflows after lifting restrictions early.
  - Bulgaria and Romania were important source countries before accession in 2007; Ireland and the United Kingdom restricted access to Bulgarian and Romanian labor markets in 2007; Italy and Spain became attractive destinations thereafter.

### III. GENERAL EQUILIBRIUM MODEL WITH LABOR MOBILITY — structure and parameterization
- Model purpose: dynamic general equilibrium model of convergence with endogenous cross-border labor allocation F_t^l to assess effects on convergence dynamics.
- Key model features:
  - Small open economy with representative agent; three goods: tradable, nontradable, investment good.
  - Two-stage optimal dynamics: expansion stage (shift toward nontradables, borrowing, nontradable price rise) and reorientation stage (shift back to tradables to service foreign debt).
  - International labor mobility: choice of F_t^l with adjustment costs for changes in foreign labor allocation and for sectoral labor reallocation.
  - Consumers maximize U(c_T, c_N) = [(ε c_T^{1-ρ} + (1-ε) c_N^{1-ρ})/(1-ρ)] with intertemporal substitution parameter ρ.
  - Producers: tradable and nontradable sectors with sectoral labor adjustment costs; investment sector chooses inputs each period.
  - Aggregate constraints include nontradable and tradable resource constraints, trade balance and current account incorporating remitted wages and adjustment costs.
- Functional forms and parameter values (as specified):
  - Period = 1 year.
  - Initial net foreign asset position: b_0 = 0.
  - 1/ρ = 0.50.
  - β = 0.96.
  - ε = 0.34.
  - γ = 0.44.
  - α = 0.33.
  - δ = 0.073 (set to match investment-output ratio 0.21).
  - A_TN^{**} = 1.10 and p_N^* = 1.
  - l_F^0 = 0.
  - Parameter summary (Table 3):
    - 1/ρ = 0.50
    - β = 0.96
    - ε = 0.34
    - γ = 0.44
    - α = 0.33
    - δ = 0.073
    - A_TN^{**} = 1.10
    - l_F^0 = 0
    - b_0 = 0

### IV. SIMULATION CASES — scenarios and quantitative outcomes
- Case 1: Minimal factor adjustment costs (η = 1, ζ = 0, λ = 2)
  - With mobility: labor outflows occur until real wage gap closed; outflows increase marginal product of labor, raising capital and investment; relative price of nontradables needs to increase by less; external imbalances and foreign debt are smaller; domestic real wage increases.
  - Example dynamic: about 5 percent initially outflowing during first 5 years, stabilizing at 2 percent (partial return migration shown).
- Case 2: Larger adjustment costs and more persistent productivity (η = 0.9, ζ = 100, λ = 2, ω = 0.8, g_T = 0.06, g_N = 0.03)
  - Final steady state: 33-percent increase in tradable productivity and 15-percent increase in nontradable productivity.
  - Effects of mobility qualitatively unchanged: faster convergence, less pronounced two-stage dynamics except for domestic wage.
  - Larger adjustment costs/persistence eliminate initial overshooting in consumption and wage; simulation exhibits sizeable (around 1.5 percent of output) wage remittance flows in initial period.
  - Larger labor outflows with no return migration in shown horizon; foreign labor stabilizes at 16 percent of total labor endowment.
- Case 3: Pace of productivity convergence and boom-bust scenarios
  - Faster convergence reduces optimal labor outflows because wage gaps close faster.
  - Overly optimistic expectations (fast convergence belief followed by postponed growth in period 5) produce larger labor outflows after revision; unexpected slowdown can generate new waves of labor outflows.
  - Boom-bust cycle yields overall smaller labor outflows than the slow convergence scenario; welfare higher when slow convergence is correctly anticipated and labor can be allocated optimally from the outset.
- Model insights:
  - Cross-border labor mobility cushions rather than amplifies pressure on nontradable prices and current account.
  - Mobility speeds up convergence by giving workers access to higher foreign wages and remittance income but can raise domestic wage levels, creating second-round competitiveness risks.

### V. POLICY CHALLENGES — managing volatility and fostering growth
- Managing volatility
  - Context: labor flows associated with perceived overheating and busts via wage inflation and remittance-driven demand.
  - Labor market indicators (2004–2008:Q1, 2005–07):
    - Real wage developments show rising year-on-year growth rates.
    - Job vacancy rates show tightening, with Estonia and Latvia starting to fall recently.
  - Remittances:
    - Support domestic activity and can push up demand for domestic products, contributing to price and wage inflation.
    - May take investment character (domestic equity and real estate), amplifying asset price appreciation via wealth effects.
  - Assessment:
    - Anticipated productivity growth and consumption smoothing (capital inflows) have been more powerful drivers of overheating than labor mobility.
    - A degree of wage inflation is natural and optimal during convergence when labor crosses borders; remittances are welfare-improving.
  - Demand-management recommendations:
    - Address sources of overheating directly; avoid restricting labor mobility as a primary tool.
    - Fine-tune demand-management to prevent wage-price spirals while preserving mobility benefits.
    - Monitor wages to avoid second-round effects that erode competitiveness.
- Fostering growth
  - Labor market outcomes:
    - Employment rates rose by almost 5 percentage points on average; 2007 average employment rate = 63 percent (below Lisbon target 70 percent); some countries (Poland, Hungary, Romania) below 60 percent.
    - Unemployment fell from about 12 percent in early 2000s to 7 percent in recent years.
  - Challenges:
    - Overheating may have eroded tradables’ competitiveness, making reorientation harder if labor supply is limited or skill profile deteriorated due to shifts toward nontradables.
    - Foreign debt servicing may be harder with smaller domestic labor support if much debt is local and labor migrates.
  - Policy levers to raise participation and employment:
    - Better-targeted active labor market policies.
    - Less rigid regulations regarding hiring and dismissals.
    - Improved design of tax-benefit systems.
  - Reducing labor market mismatches:
    - Example: Estonia tertiary vs primary education wage premium fell from 93 percent in 1997 to 32 percent in 2006.
    - Options: relax immigration policies to allow inflows from non-EU emerging economies; invest in return migration initiatives; invest in education, including tertiary education.

### VI. CONCLUSION — policy-relevant summaries
- Core conclusions:
  - Labor mobility speeds up convergence, boosts capital-labor ratios, supports aggregate demand via remittances, and can augment skills through returning migrants.
  - Migration shifts part of demand abroad, moderating nontradable price booms and current account deficits during convergence, and reduces required internal factor market flexibility for reorientation to tradables.
  - Restricting labor mobility is not an effective response to overheating; mobility tends to cushion rather than amplify overheating.
  - Policymakers should guard against second-round wage-inflation effects that could erode competitiveness.
  - Sustained growth requires mobilizing and better utilizing labor, including increasing labor force participation to ease reorientation and address age/skill mismatches between outflows and inflows.

*Source: _wp08264 - References*

### References..............................................................................................................

### _wp08264 - References

### Tables
- 1. New Member States: Net Migration Rates, 1992-2007.........................................................6
- 2. Largest Source Countries for Immigration in OECD European Countries, 2000 and 2005..7
- 3. Parameter Values and Initial Conditions .............................................................................17

### Figures
- 1. Residents from the NMS-8 in the EU-15, 2000-2006 ...........................................................7
- 2. New Member States: Income per Capita Relative to EU-27, 2000 and 2007 .......................8
- 3. Simulations with Minimal Factor Adjustment Costs...........................................................20
- 4. Simulations with Larger Factor Adjustment Costs ..............................................................24
- 5. Response of Cross-Border Labor Flows to Selected Convergence Scenarios.....................25
- 6. New Member States: Real Wage Developments, 2004-2008:Q1........................................28
- 7. New Member States: Job Vacancy Rates, 2005-07 .............................................................28
- 8. New Member States: Employment Rate, 2000-07 ..............................................................32

*Source: _wp08264 - References*

### 9. New Member States: Unemployment Rate, 2000-08 ..........................................................32

### 9. New Member States: Unemployment Rate, 2000-08 ..........................................................32

### I. INTRODUCTION
- Cross-border labor mobility has been a key feature in the income convergence of the New Member States (NMS).  
- NMS comprise Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic, and Slovenia.  
- Different modes of labor provision across borders emerged: physical migration, change of permanent residence, participation in foreign labor markets, seasonal, temporary, or irregular flows.  
- Net terms: most countries experienced for some period large net outflows of labor.  
- Perspective differences:
  - Recipient (higher-income) countries: concerns about absorbing foreign labor inflows; evidence suggests inflows have supplemented rather than replaced domestic labor, alleviating aging-related problems, contributing to growth, and helping fend off inflationary pressures.
  - Source (NMS) perspective: paper documents migratory flows, interprets them with a general equilibrium model, and examines policy implications.

Key findings:
- Enhanced labor mobility speeds up convergence and helps boost economy-wide capital-labor ratios; migration moderates the boom in nontradable prices and the buildup of the current account deficit during convergence.
- Restricting labor mobility is no answer to overheating pressures; mobility is unlikely to be a significant primary source of overheating and tends to cushion rather than amplify pressures. Over the medium term, second-round effects of wage inflation possibly associated with outward labor flows need to be avoided to prevent erosion of competitiveness.
- To ensure sustained growth, labor needs to be mobilized and utilized better, including by fostering labor force participation to reorient resources from the nontradable to the tradable sector and to address mismatches from age and skill composition of flows.

### II. CROSS-BORDER LABOR FLOWS
- Measurement challenges: registration systems tied to permanent residency may underestimate flows; censuses and labor force surveys may miss temporary/irregular flows; recipient-country administrative systems can double count and suffer comparability problems.
- Labor market openness increased markedly after transition; destination countries opened gradually and restrictions were alleviated after successive EU enlargements.
- Net migration rates (Table 1, 1992–2007) indicate strongly negative net migration in Baltics during early transition; Bulgaria, Poland, Romania also had high negative net migration rates; Czech Republic, Hungary, Slovenia had positive average migration balances.
- Post-2004 (first EU enlargement) gross emigration patterns:
  - From EU-15 perspective, stock of foreign residents from NMS-8 increased by about 200,000-250,000 per year since the first EU enlargement, representing a cumulative 1.5 percent of source countries’ total population since 2004; Latvia, Lithuania, and Poland had higher-than-average gross emigration rates.
  - Destination-country choices influenced by timing of opening and other factors (language barriers); Ireland and the United Kingdom recorded large inflows after lifting restrictions early.
- Bulgaria and Romania were important source countries before accession in 2007; Ireland and the United Kingdom restricted access to Bulgarian and Romanian labor markets in 2007; Italy and Spain became attractive destinations thereafter.
- Figure 1 and Table 2 (data cited): EU-15 residents from NMS-8 rose in 2000-2006; largest source countries for immigration in OECD European countries listed for 2000 and 2005 (data from OECD International Migration Outlook (2007)).

### III. A GENERAL EQUILIBRIUM MODEL WITH LABOR MOBILITY
- Purpose: Build a dynamic general equilibrium model of convergence with endogenous labor allocation across borders to assess how cross-border labor mobility affects convergence dynamics.
- Model overview:
  - Small open economy with a representative agent; three goods: tradable, nontradable, investment good.
  - Representative agent is both consumer and producer; maximizes utility over infinite horizon; deterministic after initial shock.
  - Convergence modeled as productivity shock toward higher EU levels.
- Two stages of optimal dynamics:
  - Expansion stage: shift toward nontradable sector; borrowing of tradables; nontradable supply bottleneck raises capacity and relative price of nontradables.
  - Reorientation stage: shift back toward tradables to service foreign debt; more borrowing in expansion implies larger tradable sector in reorientation.
- International labor mobility enters via choice of F_t^l, labor allocated abroad; adjustment costs modeled for changes in foreign labor allocation and changes in sectoral labor stocks.
- Consumer problem: utility from tradable and nontradable consumption; budget constraint expressed in tradables; wage at home w_t and foreign wage w^*; adjustment cost term Γ for changes in foreign labor; total labor normalized to unity.
- Producer problems:
  - Tradable and nontradable sectors: producers maximize profits taking prices as given; production function includes lagged labor and sectoral labor adjustment costs.
  - Investment sector: chooses inputs T_t^x and N_t^x each period, taking q_t and p^N_t as given.
- Aggregate resource constraints:
  - Nontradable goods: domestic consumption plus intermediate use cannot exceed domestic production.
  - Tradable goods: resource constraint includes trade with rest of world and labor moving across borders; trade balance and current account expressions incorporate remitted wages and adjustment costs for foreign labor.
- Capital accumulation and factor aggregation constraints specified.
- Interest rate specification: closed to cross-border resource flows implies b_{t+1}=b_t; open economy implies r exogenous.

Functional forms and parameterization (Table 3 values preserved):
- Utility: U(c_T, c_N) = [(ε c_T^{1-ρ} + (1-ε) c_N^{1-ρ})/(1-ρ)] with unitary elasticity between tradable and nontradable (ρ intertemporal substitution).
- Investment production: G(Tx, Nx) = (γ T_x^{1} + (1-γ) N_x^{1})^{1} with unitary elasticity and normalization.
- Sector production: includes Cobb-Douglas in capital and labor plus quadratic costs for changing labor with parameter λ.
- Sectoral investment adjustment costs per Lucas and Prescott form with parameter η.
- Cross-sector labor movement adjustment costs: quadratic with parameter ζ.
- Period = 1 year.
- Initial net foreign asset position: b_0 = 0.
- Intertemporal elasticity of substitution: 1/ρ = 0.50.
- Discount factor: β = 0.96.
- Expenditure weights: ε = 0.34 (tradables in consumption), γ = 0.44 (tradables in investment).
- Capital income share: α = 0.33.
- Depreciation rate: δ = 0.073 (set to match investment-output ratio 0.21).
- Rest of world sectoral productivity ratio: A_TN^{**} = 1.10 and p_N^* = 1.
- Initial foreign labor share: l_F^0 = 0.
- Parameter summary (Table 3):
  - 1/ρ = 0.50
  - β = 0.96
  - ε = 0.34
  - γ = 0.44
  - α = 0.33
  - δ = 0.073
  - A_TN^{**} = 1.10
  - l_F^0 = 0
  - b_0 = 0

Simulation cases and results:
- Case 1: Minimal factor adjustment costs (η = 1, ζ = 0, λ = 2).
  - Comparison of model with and without cross-border labor mobility (Figure 3).
  - Without mobility: two-stage convergence with expansion into nontradables, borrowing, then reorientation to tradables.
  - With mobility: labor outflows occur until real wage gap closed; labor outflows increase marginal product of labor, leading to capital and investment effects; relative price of nontradables needs to increase by less; external imbalances and foreign debt are smaller; domestic real wage increases; model can show partial return migration (example: about 5 percent initially outflowing during first 5 years, stabilizing at 2 percent).
- Case 2: Larger adjustment costs and more persistent productivity (η = 0.9, ζ = 100, λ = 2, ω = 0.8, g_T = 0.06, g_N = 0.03).
  - Productivity shock leads to final steady state with 33-percent increase in tradable productivity and 15-percent increase in nontradable productivity.
  - Qualitative effects of mobility unchanged: faster convergence, less pronounced two-stage dynamics except for domestic wage.
  - Larger adjustment costs/persistence eliminate initial overshooting in consumption and wage; simulation exhibits sizable (around 1.5 percent of output) wage remittance flows in initial period.
  - Larger labor outflows and no return migration in shown horizon; foreign labor stabilizes at 16 percent of total labor endowment.
- Case 3: Pace of productivity convergence and boom-bust cycle.
  - Fast vs slow convergence: faster convergence reduces optimal labor outflows because wage gaps close faster.
  - Overly optimistic expectations (fast convergence belief followed by postponed growth in period 5) produce larger labor outflows after revision; unexpected slowdown can generate new waves of labor outflows.
  - A boom-bust cycle yields overall smaller labor outflows than the slow convergence scenario; welfare higher when slow convergence is correctly anticipated and labor can be allocated optimally from the outset.
- Model insight: cross-border labor mobility cushions rather than amplifies pressure on nontradable prices and current account; it speeds up convergence by allowing workers immediate access to higher foreign wages and remittance income but can raise domestic wage levels and create second-round competitiveness risks.

### IV. POLICY CHALLENGES
A. Managing Volatility
- Context: flows of labor have been associated with perceived overheating and busts due to wage inflation and remittance-driven demand.
- Labor market indicators:
  - Real wage developments, 2004-2008:Q1 show rising year-on-year growth rates (Figure 6).
  - Job vacancy rates, 2005-07 (Figure 7) show tightening, with Estonia and Latvia starting to fall recently.
- Remittances:
  - Support domestic activity; can push up demand for domestic products and contribute to price and wage inflation.
  - Remittances may take investment character (domestic equity and real estate), amplifying asset price appreciation and demand via wealth effects.
- Is labor mobility the main cause of overheating?
  - Evidence suggests anticipated productivity growth and consumption smoothing (capital inflows) have been more powerful drivers than labor mobility.
  - Even with labor outflows, capital continued to flow in—if net labor outflows were dominant, capital inflows would be less likely.
- Important policy implications:
  - A degree of wage inflation is natural and optimal during convergence when labor crosses borders.
  - Remittances are welfare-improving channels for consumption and investment.
  - Labor mobility can dampen domestic oscillations by exporting part of nontradables demand, reducing nontradable price booms and current account deterioration.
- Labor mobility cushions overheating and cooling:
  - Outflows moderate as economy overheats; during downturns, open labor markets can lead to additional outward flows unless recipient economies are also affected.
  - Region-specific shocks may induce both inward and outward migration depending on skill composition.
- Demand-management policy recommendations:
  - Address source of overheating directly; avoid restricting labor mobility as a primary tool.
  - Fine-tune demand-management to prevent wage-price spirals while preserving mobility benefits.
  - Monitor wages to avoid second-round effects that erode competitiveness; balance allowing wages to rise in line with productivity against emigration pressures that limit wage restraint.

B. Fostering Growth
- Labor market achievements and remaining scope:
  - Employment rates rose by almost 5 percentage points on average; 2007 average employment rate = 63 percent (below Lisbon target 70 percent); some countries (Poland, Hungary, Romania) below 60 percent.
  - Unemployment fell from about 12 percent in early 2000s to 7 percent in recent years; long-term unemployment improved in many countries.
- Challenges to mobilizing labor supply and employment:
  - Overheating may have eroded tradables’ competitiveness, causing closures and costly reinstallation.
  - Reorientation is harder if labor supply is limited or skill profile deteriorated due to shifts toward nontradables.
  - Foreign debt servicing may be harder with smaller domestic labor support if much debt is local and labor migrates.
- Policy levers to raise participation and employment:
  - Better-targeted active labor market policies.
  - Less rigid regulations regarding hiring and dismissals.
  - Improved design of tax-benefit systems.
- Reducing labor market mismatches:
  - Notable outflows of young, low-skilled workers lowered wage dispersion (example: Estonia tertiary vs primary education wage premium fell from 93 percent in 1997 to 32 percent in 2006).
  - To offset mismatches:
    - Consider relaxing immigration policies to allow larger inflows from non-EU emerging economies.
    - Invest in return migration initiatives to attract emigrants with gained skills.
    - Invest in education, including tertiary education, to improve skill supply.

### V. CONCLUSION
- Summarized key conclusions:
  - Labor mobility speeds up convergence, boosts economy-wide capital-labor ratios, supports aggregate demand via remittances, and can augment skills through returning migrants.
  - Migration shifts part of demand abroad, moderating nontradable price booms and current account deficits during convergence, and reduces required internal factor market flexibility for reorientation to tradables.
  - Restricting labor mobility is not an effective response to overheating; mobility tends to cushion rather than amplify overheating. Policymakers should guard against second-round wage-inflation effects that could erode competitiveness.
  - Sustained growth requires mobilizing and better utilizing labor, including increasing labor force participation to ease reorientation and address age/skill mismatches between outflows and inflows.

*Source: IMF working paper content unit: 9. New Member States: Unemployment Rate, 2000-08 (pages and figures as provided in the supplied content).*

### REFERENCES

### _wp08264 - REFERENCES

### Major thematic clusters
- Aggregate investment and tradable vs nontradable goods
  - Bems, R., 2008, “Aggregate Investment Expenditures on Tradable and Nontradable Goods,” Review of Economic Dynamics 11, pp. 852-883.
- Trade deficits and convergence in Baltic/Emerging Europe
  - Bems, R., and K. Jonsson Hartelius, 2006, “Trade Deficits in the Baltic States: How Long Will the Party Last?” Review of Economic Dynamics 9, pp. 179-209.
  - Bems, R., and P. Schellekens, 2007, “Finance and Convergence: What’s Ahead for Emerging Europe?” IMF Working Paper 07/244 (Washington: International Monetary Fund).
- Labor mobility, migration, and labor market effects in EU enlargement context
  - Brücker, H., 2007, “Labor Mobility After the European Union’s Eastern Enlargement: Who Wins, Who Loses?” German Marshall Fund Paper Series (Washington: German Marshall Fund). Available via the Internet: www.gmfus.org/doc/0307_LaborMobility.pdf.
  - Brunner, A., 2008, “Migration and Economic Convergence in the New Member States,” Box 14 in Regional Economic Outlook: Europe (Washington: International Monetary Fund).
  - Brunner, A., forthcoming, “Migration and Economic Convergence in New Member States: Theoretical, Empirical, and Historical Perspectives” IMF Working Paper (Washington: International Monetary Fund).
  - Budnik, K., 2007, “Migration Flows and Labour Market in Poland,” Working Paper No. 44 (Warsaw: National Bank of Poland).
  - Iara, A., 2008, “East-West European Migration: Labour Mobility in the EU-27,” paper presented at the Vienna Institute for International Economic Studies, Spring Seminar, Vienna, March 28.
  - Kaczmarczyk, P., and M. Okólski, 2008, “Economic Impacts of Migration on Poland and the Baltic States,” Fafo Paper No. 2008:01 (Oslo: Fafo Institute for Labour and Social Research). Available via the Internet: www.fafo.no/pub/rapp/10045/index.html.
  - Schreiner, J., 2008, “Labor Markets in Central, Eastern and Southeastern European EU Member States: General Trends and Migration Effects,” Focus on European Economic Integration 01/08 (Vienna: Oesterreichische Nationalbank).
- Capital flows, exchange rates, and financial market integration
  - Fernandez de Cordoba, G., and T. Kehoe, 2000, “Capital Flows and Real Exchange Rate Fluctuations Following Spain’s Entry into the European Community,” Journal of International Economics 51, pp. 49-78.
  - Decressin, J., H. Faruqee, and W. Fonteyne, 2007, Integrating Europe’s Financial Markets (Washington: International Monetary Fund).
- Foundational macroeconomic frameworks and international comparisons
  - Obstfeld, M., and K. Rogoff, 1996, “Foundations of International Macroeconomics”, MIT Press.
  - Organization for Economic Cooperation and Development, 2007, International Migration Outlook, Annual Report (Paris: OECD).
- National and multilateral data sources
  - Statistics Estonia, various years, Labor Force Survey (Tallinn).
  - World Bank, 2006, World Bank EU8 Quarterly Economic Report (Washington, September).

### Key reference metadata (selected items preserved exactly)
- IMF Working Paper: Bems, R., and P. Schellekens, 2007, “Finance and Convergence: What’s Ahead for Emerging Europe?” IMF Working Paper 07/244 (Washington: International Monetary Fund).
- Fafo paper: Kaczmarczyk, P., and M. Okólski, 2008, “Economic Impacts of Migration on Poland and the Baltic States,” Fafo Paper No. 2008:01 (Oslo: Fafo Institute for Labour and Social Research). Available via the Internet: www.fafo.no/pub/rapp/10045/index.html.
- German Marshall Fund online availability: Brücker, H., 2007, “Labor Mobility After the European Union’s Eastern Enlargement: Who Wins, Who Loses?” German Marshall Fund Paper Series (Washington: German Marshall Fund). Available via the Internet: www.gmfus.org/doc/0307_LaborMobility.pdf.
- Journal article page ranges preserved:
  - Bems, R., 2008, Review of Economic Dynamics 11, pp. 852-883.
  - Bems, R., and K. Jonsson Hartelius, 2006, Review of Economic Dynamics 9, pp. 179-209.
  - Fernandez de Cordoba, G., and T. Kehoe, 2000, Journal of International Economics 51, pp. 49-78.

*Source: _wp08264 - REFERENCES*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08264.pdf_