Labor mobility agreements and exit of migrants: Evidence from Europe

In this paper, we study how free labor mobility agreements in Europe, usually thought to favor inward migration, might actually create good incentives for already settled migrants to exit their host country. Using outmigration data between 1990 and 2011, a period of observation where some countries entered the EU and especially a period during which Schengen agreements have been progressively implemented by a large number of European countries, we could test this conjecture. While the evidence for EU is mixed, we find very strong evidence that Schengen did increase migrations outflows by 40 to 53%. The effect appears to be even higher for outmigrants originating from Eastern Europe after their countries' accession to Schengen. Also, and consistent with the hypothesis of preferences for living at home or in a country with a close culture to home, the effect of Schengen on outmigration happens to be smaller when the countries of origin and of residence of the outmigrants are close in terms of their cultural traits. Also, we document that the Schengen effect is significantly higher for outmigration flows than for immigration flows by almost 20 percentage points.