In this project, we empirically study the causal effects of EU product market integration on wage and employment outcomes in German manufacturing and service industries, with a particular focus on heterogeneous effects across firms and workers subject to different labor market institutions. We plan to exploit the EU Eastern Enlargement in 2004 to obtain quasi- experimental evidence on the labor market effects of an increase in product market integration. Given that previous empirical research has been limited by the availability of detailed micro-data, we seek to improve on the evidence by drawing on a large-scale German linked employer-employee data set, the IAB Linked Employer-Employee Panel (LIAB). Exploiting these data, the study adds to the existing literature on the labor market effects of product market integration in several important ways. Based upon quasi-experimental evidence, the study (1) aims at identifying the wage and employment effects of EU market integration at the individual as well as establishment level; (2) considers the role of labor market institutions, such as collective wage contracts, for the relative importance of wage and employment adjustments to trade-induced demand shocks; (3) explores heterogeneous effects across different worker groups.


Fritz Thyssen Stiftung, Köln, DE

Project duration

01.07.2012 - 30.06.2014

Project members

Prof. Dr. Nicole Gürtzgen (Coordinator)
Dr. Jan Fries