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Immigration, Income and Productivity of Host Countries: a Channel Accounting Approach

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  • Mariya Aleksynska
  • Ahmed Tritah

Abstract

This paper investigates the contribution of immigration to income and productivity of host countries. Using a dataset constructed from census data and labor force surveys for 20 OECD countries in the period from 1960 to 2005, we explore the information on age and educational attainment of immigrants to assess the contribution of immigration to income components: changes in physical capital, human capital, employment, and total factor productivity. We combine level accounting approach with panel income regressions, and also account for the endogeneity of migration choices to productivity shocks. Our main findings are that, overall, higher shares of immigrants over natives have a positive effect on income and productivity of their host countries. Under the assumption that older immigrants are also the ones with the longest duration of stay, this effect is due to the long run changes in TFP, and is robust to educational disparities between immigrants and natives. The decomposition by age and education suggests that only unskilled immigrants have a non-neutral impact on income and productivity, which is negative in the short run but positive, and larger in magnitude, in the long run. We also find a dispersed impact of the presence of other immigrant groups on some income channels.

Suggested Citation

  • Mariya Aleksynska & Ahmed Tritah, 2009. "Immigration, Income and Productivity of Host Countries: a Channel Accounting Approach," Working Papers 2009-23, CEPII research center.
  • Handle: RePEc:cii:cepidt:2009-23
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    Cited by:

    1. Tani, Massimiliano, 2018. "Selective immigration policies, occupational licensing, and the quality of migrants’ education-occupation match," GLO Discussion Paper Series 206, Global Labor Organization (GLO).
    2. Gianluca Orefice, 2010. "Skilled Migration and Economic Performances: Evidence from OECD Countries," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 781-820, December.
    3. Afful, Efua Amoonua, 2012. "Technology Spillover from International Flows: Imports, Foreign Direct Investment and Immigration," MPRA Paper 57606, University Library of Munich, Germany.
    4. Tani, Massimiliano, 2018. "Selective Immigration, Occupational Licensing, and Labour Market Outcomes of Foreign-Trained Migrants," IZA Discussion Papers 11370, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    INTERNATIONAL MIGRATION; PRODUCTIVITY; INCOME; EMPLOYMENT; INSTRUMENTAL VARIABLE; CHANNEL ACCOUNTING;

    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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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