Interdependencies between agricultural and labour markets

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This study examines the interdependencies between labor migration and the integration of ten new Member States into the EU’s Common Agricultural Policy (CAP) during the Eastern enlargement. Despite a high level of regional integration, agriculture and labor migration still face significant protectionism between the EU-15 and the acceding Central and Eastern European countries (CEECs). Agricultural trade is hindered by import tariffs, while immigration from the CEECs is restricted by border controls. The removal of these restrictions and deeper integration, including the adoption of EU policies like the CAP, is expected to lead to significant changes in agricultural production and migration patterns. Strong interdependencies are anticipated between agricultural markets and labor migration, suggesting that structural adjustments in agriculture will impact labor markets and migration. For the quantitative analysis, a multi-regional and multi-sectoral CGE model, GTAP, is employed, incorporating trade links and a detailed agricultural sector depiction. The model includes a migration mechanism to reflect the immigration quotas imposed by some EU-15 countries. Focusing on Poland and Germany, the results indicate that CAP integration reduces migration from Poland to Germany, particularly affecting trade in processed animal products. This diminished migration flow correlates with a decline in Poland’s export performance to Germany, hig