Does the abolition of border controls boost cross-border commuting? Evidence from Switzerland

In this paper we study the effects of Switzerland implementing the Schengen agreement in December 2008 on labour mobility. As vehicles are allowed to cross borders without stopping and residents in border areas are granted freedom to cross borders away from fixed checkpoints, we expect cross-border commuting to Switzerland to be higher after Switzerland joined the Schengen area. Using data from the European Labour Force Survey (ELFS), we estimate a Difference-in-Differences model and find that the individual probability to cross-border commute to Switzerland has increased from a minimum of 3.2 percentage points to a maximum of 7 percentage points, according to different model specifications. Our result is particularly important due the timely and meaningful policy implications.