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The Economic Impact of Migration – Productivity Analysis for Spain and the UK

Listed author(s):
  • Kangasniemi, M.
  • Mas, Matilde
  • Robinson, C.
  • Serrano, Lorenzo

As a consequence of increased internationalization over the past 20 years labour has become increasingly mobile, and yet the implications for firm and industry performance have been largely ignored. This paper explores the direct economic consequences of immigration on host nations’ productivity performance at a sectoral level. We consider its impact in two very different European countries, Spain and the UK. Whilst the UK has traditionally had a substantial in-flow of migration, for Spain, the phenomenon is much more recent. The paper provides an overview of the role played by immigration on per capita income, highlighting the importance of demographic differences. We then go on to analyze the role of migration on productivity using two different approaches: i) growth accounting methodology and ii) econometric estimation of a production function. Our findings indicate that migration has had very different implications for Spain and the UK, migrants being more productive than natives in the UK but less productive than natives in Spain. This may in part be a function of different immigration policies, particularly related to the skill requirements on entry, but also in part a feature of the host nations’ ability to ‘absorb’ foreign labour.

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File URL: https://mpra.ub.uni-muenchen.de/15835/1/MPRA_paper_15835.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15835.

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Date of creation: 2008
Date of revision: 2008
Handle: RePEc:pra:mprapa:15835
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  17. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
  18. Chellaraj, Gnanaraj & Maskus, Keith E. & Mattoo, Aaditya, 2005. "The contribution of skilled immigration and international graduate students to U.S. innovation," Policy Research Working Paper Series 3588, The World Bank.
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