Document Type

Honors Project

Abstract

This paper estimates the benefits of EU membership for Latvia, a former communist country and a member of the former USSR. It is widely believed that the EU membership significantly contributes to raising living standards and growth of the economies of new members. Using counterfactual analysis with the official date of accession of 2003 I find that Latvia demonstrates stronger economic growth from the EU membership, but only up to 2009. After the 2009 financial crisis Latvia’s economic growth is severally compromised as a consequence of joining the EU. When 1999 is treated as the treatment year, the year when Latvia officially opened negotiations with the EU, the results show a much stronger effect of EU membership on economic growth. Under this scenario Latvia benefited by about $3218 per citizen per year from EU membership in the period 1999 – 2010.

 
 

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