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

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  • Kangasniemi, M.
  • Mas, Matilde
  • Robinson, C.
  • Serrano, Lorenzo

Abstract

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.

Suggested Citation

  • Kangasniemi, M. & Mas, Matilde & Robinson, C. & Serrano, Lorenzo, 2008. "The Economic Impact of Migration – Productivity Analysis for Spain and the UK," MPRA Paper 15835, University Library of Munich, Germany, revised 2008.
  • Handle: RePEc:pra:mprapa:15835
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    Cited by:

    1. 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.
    2. Sanchis-Guarner, Rosa, 2017. "Decomposing the impact of immigration on house prices," LSE Research Online Documents on Economics 86571, London School of Economics and Political Science, LSE Library.
    3. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute for the Study of Labor (IZA).
    4. M Daniele Paserman, 2013. "Do high-skill immigrants raise productivity? Evidence from Israeli manufacturing firms, 1990-1999," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-31, December.
    5. LSE Enterprise,, 2011. "Study on the impact of the single market on cohesion: implications for cohesion policy, growth and competitiveness," LSE Research Online Documents on Economics 42840, London School of Economics and Political Science, LSE Library.
    6. Giulia Bettin & Alessia Lo Turco & Daniela Maggioni, 2014. "A firm level perspective on migration: the role of extra-EU workers in Italian manufacturing," Journal of Productivity Analysis, Springer, vol. 42(3), pages 305-325, December.
    7. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    8. repec:taf:rjapxx:v:20:y:2015:i:4:p:594-612 is not listed on IDEAS
    9. Deahoon Nahm & Massimiliano Tani, 2015. "Skilled immigrants' contribution to productive efficiency," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 20(4), pages 594-612, October.
    10. Manuel González Gómez & Mª Soledad Otero Giráldez, 2017. "The causality between economic growth and immigration in EU/EFTA member states," Working Papers 1701, Universidade de Vigo, Departamento de Economía Aplicada.
    11. Mahia, Ramon & de Arce, Rafael & Thielemann, Eiko, 2010. "Immigration policy and its impact a comparative study with a focus on Spain," MPRA Paper 35742, University Library of Munich, Germany.
    12. Clark, Ken & Drinkwater, Stephen & Robinson, Catherine, 2014. "Migration, Economic Crisis and Adjustment in the UK," IZA Discussion Papers 8410, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Migration; productivity;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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