- Research Handbooks in Law and Economics series
Edited by Thomas Eger and Hans-Bernd Schäfer
Chapter 7: The Law and Economics of the Free Movement of Persons in the European Union
7 The law and economics of the free movement of persons in the European Union Herbert Brücker and Thomas Eger* 1 1 INTRODUCTION After the failure of the European Defence Community and the European Political Community in 1954 the six founding members of the European Economic Community decided to relaunch European integration on an economic basis. The core of this integration is the establishment of a Common Market without barriers to the free movement of goods, services, persons, and capital. The idea was to redress the fragmented goods and factor markets in Europe and to increase economic growth by improving the division of labour and specialisation among the Member States (Eichengreen 2007, 163 ff.; Gillingham 2003, 34 ff.). The free movement of persons, one of the four ‘fundamental freedoms’, was originally strongly linked to economic activity. According to the traditional Harris–Todaro (1970) approach, economically active persons migrate if the expected income gains from migration exceed the migration costs. These costs are complex (for details see e.g. Straubhaar 2002; Trachtman 2009). They consist, for example, of the direct cost of changing residence and the utility loss from abandoning social contacts in the country of origin, as well as the time and effort required to establish new contacts in the country of destination, the time and effort required to learn a new language if necessary and to adapt to a different culture, the additional cost of finding an appropriate school for the children, lower pensions for people who have changed...
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