Keuschnigg, ChristianChristianKeuschniggKohler, WilhelmWilhelmKohler2023-04-132023-04-132002-05-01https://www.alexandria.unisg.ch/handle/20.500.14171/71260For present member countries, eastern EU enlargement entails gains from integration as well as fiscal costs. The authors use a calibrated model to quantify the dynamic effects of discriminatory trade liberalization and immigration from eastern applicants. It is found that enlargement is expansionary and yields a remarkable fiscal dividend. Surprisingly, integration compresses the wage spread between skilled and unskilled labor. Overall, the (dynamic) gains from integration clearly outweigh the fiscal cost. While ambiguous a priori, enlargement is found to hold a remarkable net welfare gain for Austria.enEastern EU enlargementlabor marketstrade liberalizationAustria.journal article