Implementation of the Schengen Agreement, which abolishes internal borders and enables passport-free movements across member states, increases commuting of workers between countries. That is the key finding of research by Angela Parenti and Cristina Tealdi, to be presented at the Royal Economic Society''s annual conference at the University of Sussex in Brighton in March 2018.
Their study shows that after Switzerland joined the Schengen area in 2008, cross-border commuting for work to Switzerland from France and Italy increased significantly. The implementation of Schengen has boosted the probability of cross-border commuting to bordering regions by more than 7% and to the whole of Switzerland by more than 3%.
This is ascribable to the severe reduction in the commuting costs triggered by implementation of the Schengen Agreement. Vehicles are allowed to cross borders without stopping and residents in border areas are granted freedom to cross borders away from fixed checkpoints. Hence, cross-country travel-to-work journeys are shorter and easier.
The new study uses information from the European Labour Force Survey for the period 2005-2015, and takes care of important methodological issues to get as close as possible to estimating the causal effect of the implementation of Schengen on cross-border commuting.
The authors focus on commuting workers from Italy and France, who make up more than 75% of the total commuting population to Switzerland. They show that the trend of individuals who commute to Switzerland has been consistently increasing in the last ten years, making Switzerland one of the most chosen destinations for many of the commuters from the EU.
The study shows that implementation of the Schengen Agreement, which is one of the most important measures adopted to promote internal labour mobility across member states, has been effective as its goal has been achieved.
But the Schengen area is currently facing major challenges. The combination of an increasing number of refugees, growing migratory pressure, security concerns and a rather weak economic recovery has called into question the Schengen area functioning.
Some parties have also discussed the possibility of permanently reintroducing border controls within the EU, and therefore terminating the Schengen Agreement, with strong and negative repercussions on the whole EU economy.
What makes the debate on Schengen so crucial are not the direct economic consequences of its possible abolition, but rather the potential collapse of the influential symbol of the European integration that Schengen represents.
Angela Parenti is at University of Pisa (Italy) and Cristina Tealdi is at Heriot-Watt University (UK). This research is part of a project funded by the European Commission Marie Curie EXODUS (https://exodusmariecurie.wordpress.com/)