Income differences
At the time of succession, incomes of new members were very different from those of EU-15 countries. Incomes of all new members were below the mean for the EU-15 countries. They still are, although the gap with EU-15 has been closing considerably during last decade (see Table below). All new member states have seen their Purchasing Power Standard (PPS) adjusted income levels go up sharply compared to those in the EU-15. Lithuania has achieved the largest jump in percentage point terms – from 37% to 60% of the EU-15 average.
Divergent trends
One can see in the chart below that during the decade from 2001 to 2011 new EU member states have recorded widely divergent population dynamics. Some countries, most notably Romania, Lithuania and Latvia have seen their population shrink rather dramatically while Cyprus (prior to the 2013 crisis), but also Slovenia, Malta and the Czech Republic had more residents in 2011 than a decade earlier. Other countries were somewhere in between those two extremes. Population can change as a result of changes in birth rates, death rates or net migration, but for most of these countries, net migration dominated.
Population dynamics correlate strongly with relative income levels
A simple hypothesis is that the average person migrates to increase his income and we found a strong positive correlation between the relative GDP per capita and population dynamics (see the chart below). Differences in relative PPS-adjusted GDP per capita levels to the EU-15 average over the decade can explain almost three fourths of the variation in population dynamics. While none of the new member states can boast income levels above those of EU-15 average, those countries with GDP per capita above 70% of that in EU-15 have shown positive population dynamics while those where GDP per capita has been below 60% of the EU-15 average have seen their population at best stay stable and at worst decline significantly. We also checked for correlation between population dynamics and income inequality. We didn’t find Gini coefficients to correlate with population dynamics in any significant way.
Conclusion
All new EU member states have seen their relative income levels increase significantly during last decade. At the same time lack of convergence of real income per capita levels with EU-15 appears to be responsible for most of the divergence with respect to population dynamics. Croatia, scheduled to join in the summer of 2013, had PPS adjusted GDP per capita in 2011 at about 55% of the EU-15 average. Thus, we would expect its population to shrink at least during the first years after joining the EU. Achieving further real convergence by way of raising productivity appears to be the only way to stop and potentially reverse the population decline in the poorer among the new EU member states.