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The effect of immigration on output mix, capital, and productivity

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  • Myriam Quispe-Agnoli
  • Madeline Zavodny

Abstract

The growing influx of immigrants into the United States has prompted concerns about potential negative effects on native workers, especially the less skilled. Such concerns have not been borne out by many studies of the effect of immigration on wages. However, the typical theoretical negative effect of immigration flows on wages may be offset by changes in other aspects of the economy, including output mix, productivity, and capital. ; This article examines the relationship between immigration and three factors-output mix, labor productivity, and capital-in the skilled and unskilled sectors in the U.S. manufacturing sector at the state level. The authors develop a simple two-sector model of the effect of immigration on these three factors. The authors then test the model's predictions using data from the 1982 and 1992 Census of Manufactures and other sources. ; The results indicate that immigration-induced changes in labor supply caused labor productivity in both the low- and high-skilled sectors to increase more slowly in states that attracted a larger share of immigrants during the 1980s than in other states. This slower growth may result from the gradual assimilation process many immigrants undergo as they acquire language skills and familiarity with U.S. institutions, the authors believe, and they call for further study of immigration's longer-term effects on productivity.

Suggested Citation

  • Myriam Quispe-Agnoli & Madeline Zavodny, 2002. "The effect of immigration on output mix, capital, and productivity," Economic Review, Federal Reserve Bank of Atlanta, vol. 87(Q1), pages 17-27.
  • Handle: RePEc:fip:fedaer:y:2002:i:q1:p:17-27:n:v.87no.1
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    Cited by:

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    3. Peter Huber & Gabriele Tondl, 2012. "Migration and regional convergence in the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(4), pages 439-460, November.
    4. Campo, Francesco & Forte, Giuseppe & Portes, Jonathan, 2018. "The Impact of Migration on Productivity and Native-Born Workers' Training," IZA Discussion Papers 11833, Institute of Labor Economics (IZA).
    5. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute of Labor Economics (IZA).
    6. Teruel Carrizosa , Mercedes & Segarra Blasco , Agustí, 2009. "Immigration and Firm Performance: a city-level approach," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 15, pages 111-137.
    7. Nicodemo, Catia, 2013. "Immigration and Labor Productivity: New Empirical Evidence for Spain," IZA Discussion Papers 7297, Institute of Labor Economics (IZA).
    8. Dr Max Nathan, 2013. "The wider economic impacts of high-skilled migrants: a survey of the literature," National Institute of Economic and Social Research (NIESR) Discussion Papers 413, National Institute of Economic and Social Research.
    9. Ethan Lewis, 2004. "How did the Miami labor market absorb the Mariel immigrants?," Working Papers 04-3, Federal Reserve Bank of Philadelphia.
    10. M Daniele Paserman, 2013. "Do high-skill immigrants raise productivity? Evidence from Israeli manufacturing firms, 1990-1999," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-31, December.
    11. Christian Dustmann & Albrecht Glitz, 2015. "How Do Industries and Firms Respond to Changes in Local Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 711-750.
    12. Ethan Lewis, 2003. "Local, open economies within the U.S.: how do industries respond to immigration?," Working Papers 04-1, Federal Reserve Bank of Philadelphia.
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    14. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    15. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    16. Bukowski, Pawel & Novokmet, Filip, 2021. "Between communism and capitalism: long-term inequality in Poland, 1892–2015," LSE Research Online Documents on Economics 110221, London School of Economics and Political Science, LSE Library.
    17. Sarah Harper, 2013. "Population–Environment Interactions: European Migration, Population Composition and Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(4), pages 525-541, August.
    18. Mercedes Teruel-Carrizosa & Agustí Segarra-Blasco, 2008. "Immigration and Firm Growth: Evidence from Spanish cities," Working Papers XREAP2008-11, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2008.
    19. Jacques Poot, 2007. "Demographic Change and Regional Competitiveness: The Effects of Immigration and Ageing," Population Studies Centre Discussion Papers dp-64, University of Waikato, Population Studies Centre.
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