IMF Working Papers

Labor Markets, Migration, and EU Integration in the Western Balkans

By Stephen Ayerst, Nina Chebotareva, Oksana Dynnikova, Amanda Edwards, Charles Zhang

October 31, 2025

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Format: Chicago

Stephen Ayerst, Nina Chebotareva, Oksana Dynnikova, Amanda Edwards, and Charles Zhang. "Labor Markets, Migration, and EU Integration in the Western Balkans", IMF Working Papers 2025, 226 (2025), accessed November 5, 2025, https://doi.org/10.5089/9798229029056.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper develops a structural model of interconnected European labor markets to examine how further EU integration would impact the Western Balkan economies and how policy can improve output and employment in these countries. Risks of increased emigration from further integration can be managed through promoting faster productivity growth, including through structural reforms. Model simulations show that productivity increases of 30 percent, similar to previous EU accession cases, would results in wage growth, help close the unemployment gap, and offset increased emigration through higher immigration and labor participation. Policies to improve the efficiency of the labor market (participation, job search, production) are essential to boost employment and support output.

Subject: Employment, Labor, Labor markets, Migration, Population and demographics, Production, Productivity, Unemployment, Wages

Keywords: Employment, EU Accession, Labor markets, Labor Markets, Migration, Migration, Productivity, Unemployment, Wages, Western Balkans

Publication Details

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