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Immigrants-natives complementarities in production: evidence from Italy

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  • Agnese Romiti

    () (CeRP - Collegio Carlo Alberto)

Abstract

This paper studies the impact of immigration on the Italian labor market using administrative data on Italian private-sector employees during the period 1987-2004. The analysis adopts a structural model based on a three level CES production function extending the model in Card (2001) in order to allow for imperfect substitution both between immigrants and natives within the same area-skill cell, and between females and males within the same area-skill-immigration status cell. The endogeneity of labor supply is controlled for by using an instrument based on the past immigrants' settlement as in Card (2001). The results, robust to the offsetting role of natives out-migration, provide evidence of a small but detectable degree of imperfect substitution between immigrants and natives, whereas female and male workers turn out to be perfect substitutes. Despite immigrants not having any effect on natives' employment, the simulation based on the estimated parameters suggests that a flow of low-skilled immigrants reduces mostly the wages of similarly skilled immigrants (-3.5%), and to a lesser extent those of natives (-1%).

Suggested Citation

  • Agnese Romiti, 2011. "Immigrants-natives complementarities in production: evidence from Italy," CeRP Working Papers 105, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  • Handle: RePEc:crp:wpaper:105
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    Cited by:

    1. Vincenzo Marinello & Deborah Gervasi, 2016. "Migration Flows And Labour Market In The Italian System: Comparative Analysis Between The North And South Italy," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 70(2), pages 81-92, April-Jun.
    2. repec:spr:epolit:v:34:y:2017:i:3:d:10.1007_s40888-017-0064-4 is not listed on IDEAS
    3. Del Boca, Daniela & Venturini, Alessandra, 2014. "Migration in Italy is Backing the Old Age Welfare," IZA Discussion Papers 8328, Institute for the Study of Labor (IZA).
    4. Ivan Etzo & Carla Massidda & Paolo Mattana & Romano Piras, 2017. "The impact of immigration on output and its components: a sectoral analysis for Italy at regional level," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(3), pages 533-564, December.
    5. Marchetti, Sabrina & Piazzalunga, Daniela & Venturini, Alessandra, 2013. "Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Countries Country Study: Italy," IZA Discussion Papers 7635, Institute for the Study of Labor (IZA).
    6. Peri, Giovanni & Romiti, Agnese & Rossi, Mariacristina, 2013. "Immigrants, Household Production and Women's Retirement," IZA Discussion Papers 7549, Institute for the Study of Labor (IZA).

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