Economic implications of Turkey’s accession to the E.U.



By: Helena Alvarez

A highly contested issue regarding Turkey’s accession to the European Union (E.U.) is the free movement of migrant laborers from Turkey, which already has the “largest group of third-party nationals” living in the E.U. (European Commission, 2004). Turkey’s accession to the E.U. implies that Turkish citizens will have the right to work in other member states, according to E.U. law. Although labor migration from Turkey to Germany, for example, has prevailed since the early 1960’s, this accession may further increase labor migration to other E.U. member states. There is, as a result, widespread fear of European labor markets becoming “overwhelmed.”

The free movement of labor from Turkey to Europe may have several economic implications. Advantages include greater output and consumer surplus in the E.U. (Düzenli, 2010), and an increase in the E.U-15’s GDP by 0.5 to 0.7 percent (Paçaci Elitok, 2010). Turkey’s GDP and consumption rate may also increase by 0.8 and 1.4 percent, respectively, and the country may have a terms of trade gain of 3.5 percent (Lejour et. al., 2004). Since these statistics indicate that economic growth is a possible outcome, the Turkish government may be able to create better job opportunities. This would reduce any incentive to migrate in the long-term.

There is fear, however, that increased competition in the E.U. labor market, upon Turkish immigrants’ arrival, will exacerbate destination countries’ economies by generating unemployment. Although studies indicate that countries with higher shares of foreigners generally have greater unemployment rates, an influx of Turkish migrant workers may curb the significant role that ageing is reputedly set to play in aggravating the European labor market. Germany, whose population is predicted to decrease from 82 million to 74.7 million by 2050, for example, will likely face labor shortage-related problems due to the ageing of its adult population (Daily Sabah, 2014). Turkish emigrant labor may, then, alleviate the effects of a decrease in Europe’s working age population by supplying Europe with what in the last twenty years has been primarily described as high skilled labor.

Another fear grounds itself on the belief that migration generally leads to income convergence, which happens when the receiving country’s wage falls substantially relative to the actual wage of the sending country. Turkish labor migration may have a different effect, however. If populations could easily demand and expect higher wages, such as studies of Germany have shown, “wage dumping” may be avoided, especially if there is a reasonably established transition period for the country whose membership is in question.

Although economic growth projections portend that economic integration may be advantageous, the fear of “overwhelmed” labor markets in Europe currently dominates political discourse regarding Turkey’s accession to the E.U.