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From borders to boardrooms: Immigrants' impact on productivity

Author

Listed:
  • Ghasemi, Parisa
  • Teixeira, Paulino
  • Carreira, Carlos

Abstract

Portugal has faced a substantial demographic shift that has led to an intense labor shortage across sectors, and this study investigates whether the recent increase in the share of foreign labor has influenced firm productivity. Using 2SLS estimation, we find a negative relationship between labor productivity (LP) and the share of immigrants. We further examine this relationship by looking at the impact of foreign workers on different firm layers, namely baseline productivity and size. We find that firms with low productivity are affected negatively, whereas relatively small firms seem to benefit. Through further disaggregation, we finally show that a higher proportion of immigrants with a medium education level is associated with a higher level of LP. On the whole, the results point to a potential mechanism in which immigrants and natives with similar education levels contribute positively to productivity, possibly by specializing in different roles within firms.

Suggested Citation

  • Ghasemi, Parisa & Teixeira, Paulino & Carreira, Carlos, 2026. "From borders to boardrooms: Immigrants' impact on productivity," Economic Modelling, Elsevier, vol. 160(C).
    • Handle: RePEc:eee:ecmode:v:160:y:2026:i:c:s0264999326001161
    DOI: 10.1016/j.econmod.2026.107587
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    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • 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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