Internal migration and EU regional policy transfer payments: A panel data analysis for the EU-28 member countries

Abstract

This paper analyses the effects of EU regional policy transfer payments on net migration flows among the EU-28 countries. The hypothesis is tested that EU transfer payments do hamper internal migration across the EU. On the one hand, this is done by reestimating the results found by Egger, Eggert and Larch (2014): "Structural Operations and Net Migration Across European Union Member Countries", Review of International Economics, 22(2), pp. 352-378 for a longer time period, who basically tested a NEG model where they derived the above hypothesis from. On the other hand, a more neoclassical model of the migration-regional policy-nexus is tested. Like in Egger et al. (2014) a significant effect of EU regional policy expenditures on net bilateral migration among the EU-28 member countries is identified. However, contrary to Egger et al. (2014), the effect is not negative but positive. On average, a one percentage point increase of structural funds expenditures in percent of GDP leads to an increase in the measure of net bilateral migration by about 0.2-0.6%. Hence, EU regional policy transfer payments spur instead of hamper internal migration across EU member countries.