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The productivity effect of migrants : wage cost advantages and heterogeneous firms

Author

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  • Lucht, Michael
  • Haas, Anette

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

Abstract

"Empirical evidence for the US shows that migrants increase the productivity of regions. To explain the impact of migrants on the average firm productivity we construct a general equilibrium model with monopolistic competition a la Melitz (2003). We consider heterogeneous firms with different productivity levels and imperfect substitutability between migrants and natives. This gives rise to wage differences between natives and migrants. As a consequence, firms with a higher share of migrants realize wage cost advantages. The heterogeneous distribution of migrants in our model fosters regional disparities. In equilibrium, it depends on the migrant share which kind of firms survives in the market. The only firms to stay in the market are those which are highly productive or able to compensate a lower productivity level through wage cost advantages. We show that a higher migrant share may explain a higher average productivity in a region. The welfare effects for natives are ambiguous." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Lucht, Michael & Haas, Anette, 2015. "The productivity effect of migrants : wage cost advantages and heterogeneous firms," IAB Discussion Paper 201505, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabdpa:201505
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    File URL: http://doku.iab.de/discussionpapers/2015/dp0515.pdf
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    References listed on IDEAS

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    Cited by:

    1. Möller, Joachim, 2015. "Verheißung oder Bedrohung? : die Arbeitsmarktwirkungen einer vierten industriellen Revolution," IAB Discussion Paper 201518, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    Einwanderung - Auswirkungen; Einwanderer; ausländische Arbeitnehmer; Produktivitätseffekte; Arbeitsproduktivität; Lohnkosten; regionaler Arbeitsmarkt; Ausländerquote; Lohnunterschied; Inländer; regionale Verteilung; regionale Disparität; Wettbewerbsfähigkeit;

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • 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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