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The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland

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Abstract

We study a reform that granted European cross-border workers free access to the Swiss labor market and had a stronger effect on regions close to the border. The greater availability of cross-border workers increased foreign employment substantially. Although many cross-border workers were highly educated, wages of highly educated natives increased. The reason is a simultaneous increase in labor demand: the reform increased the size, productivity, and innovation performance of skill-intensive incumbent firms and attracted new firms, creating opportunities for natives to pursue managerial jobs. These effects are mainly driven by firms that reported skill shortages before the reform.

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  • Andreas Beerli & Jan Ruffner & Michael Siegenthaler & Giovanni Peri, 2020. "The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland," KOF Working papers 20-486, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:20-486
    DOI: 10.3929/ethz-b-000432769
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    More about this item

    Keywords

    border region; cross-border workers; free movement of persons; firm performance; firm relocation; immigration policy; immigration restrictions; labor mobility; skilled immigration;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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