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The economic impact of migration: productivity analysis for Spain and the UK

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  • Mari Kangasniemi

    ()

  • Matilde Mas
  • Catherine Robinson
  • Lorenzo Serrano

Abstract

Over the past 20 years labour has become increasingly mobile and whilst employment and earnings effects in host countries have been extensively analysed, the implications for firm and industry performance have received far less attention. This paper explores the direct economic consequences of immigration on host nations’ productivity performance at a sectoral level in two very different European countries, Spain and the UK. Whilst the UK has traditionally seen substantial immigration, for Spain the phenomenon is much more recent. Our findings from a growth accounting analysis show that migration has made a negative contribution to labour productivity growth in Spain and a negative but negligible contribution in the UK. This difference is driven by a positive impact from migrant labour quality in the UK. This finding broadly holds across all sectors, but we note considerable variation in magnitudes. Labour productivity growth has a neutral contribution from migrant labour in construction and personal services in the UK, whilst in every case in Spain the effect is negative, most strongly in agriculture. Using an econometric approach to production function estimation we observe a positive long term effect on total factor productivity from migrant workers in the UK and a negative effect in Spain. Our findings suggest that either the UK is better at assimilating migrants or is more selective in terms of who is permitted to migrate. Copyright Springer Science+Business Media, LLC 2012

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Bibliographic Info

Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 38 (2012)
Issue (Month): 3 (December)
Pages: 333-343

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Handle: RePEc:kap:jproda:v:38:y:2012:i:3:p:333-343

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Web page: http://www.springerlink.com/link.asp?id=100296

Related research

Keywords: Migration; Productivity; Growth accounting; Production function; J61; O40; O57;

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Cited by:
  1. Mahia, Ramon & de Arce, Rafael & Thielemann, Eiko, 2010. "Immigration policy and its impact a comparative study with a focus on Spain," MPRA Paper 35742, University Library of Munich, Germany.
  2. Peter Huber & Gabriele Tondl, 2012. "Migration and regional convergence in the European Union," Empirica, Springer, vol. 39(4), pages 439-460, November.
  3. M Paserman, 2013. "Do high-skill immigrants raise productivity? Evidence from Israeli manufacturing firms, 1990-1999," IZA Journal of Migration, Springer, vol. 2(1), pages 1-31, December.
  4. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute for the Study of Labor (IZA).
  5. LSE Enterprise, 2011. "Study on the impact of the single market on cohesion: implications for cohesion policy, growth and competitiveness," LSE Research Online Documents on Economics 42840, London School of Economics and Political Science, LSE Library.
  6. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration, Springer, vol. 3(1), pages 1-20, December.

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