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Temporary migration is of growing significance in Europe. Upon migration to a country with higher technological development that typically coincides with positive wage differentials, temporary migrants may upgrade their skills by learning on the job and subsequently import the newly acquired human capital to their source country, thus adding to international know-how diffusion and the catching up of the respective economy. This paper is the first to provide supportive evidence of this hypothesis in a cross-country East to West European perspective, using the 2003 Youth IntroductionMigration has become a highly debated issue both in sending and receiving countries.Typically, the former are less developed, while the latter are mature industrialised economies. Among these, most of the EU member states have adopted a restrictive regime towards immigration, evenalbeit temporarily -against labour movement from the new EU members. Decreasing public support for immigration in many destination countries on the one hand, concerns of an exodus of the better skilled from source countries on the other, and, finally, growing migratory pressure created by individual desires are urgeing for a taxation of various immigration policy instruments. This paper contributes to this debate by providing evidence on the returns to working experience in Western Europe in Eastern European labour markets. The focus is hence on temporary or return migration of labour in an East to West European context, adopting a source country perspective.Empirical evidence shows that return migration has been a constitutive part of international migratory flows throughout the 20 th century (Constant and Massey, 2002). In Western Europe specifically, return migration from Central Europe has grown in size in the 1990s (International Organization for Migration 2005: 145). Nevertheless, only recently has academic interest in migration become dedicated to migrants' possibilities of return. Existing work has been focused on the decision to re-migrate. Borjas and Bratsberg (1996) were among the first to study determinants of return migration both theoretically and empirically. Extending the standard Roy model 1 framework of mobility decisions to allow for reversibility, they show that return migration accentuates the selectivity of international mobility: the permanent stayers in the host country are "the best of the best" or "the worst of the worst" in the presence of positive or negative selection respectively. Dustmann and Kirchkamp (2000) furthered analytical thinking on return migration by modelling the simultaneous choice of migration duration and after-return employment status. As concerns the economic performance of returning migrants in their original country, economic analysis has so far focused on entrepreneurial activities of the returning migrants. Among others, empirical work has documented the higher probability of self-employment among returning migrants relative to the non-migrating population. Also, it has been hypothesised that a for...

The transition to a market economy and increased economic integration have fostered regional disparities in Central and Eastern European countries. This paper investigates whether and to what extent wages could act as an equilibrating mechanism in these countries by adjusting to local market conditions. Using regional data for the 1990s, we estimate static and dynamic wage curve models for Bulgaria, Hungary, Poland and Romania. We find empirical evidence indicating that regional average earnings adjusted to local unemployment rates in Bulgaria, Hungary and Poland. This result suggests that in these countries wages could help equilibrate labour markets following demand shocks. In the case of Romania, the unemployment elasticity of pay was not significantly different from zero.

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