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The Effect of (Mostly Unskilled) Immigration on the Innovation of Italian Regions

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  • Massimiliano Bratti
  • Chiara Conti

Abstract

Immigration has recently been at the centre of the political and economic agenda. Economists have studied extensively the impact of immigration on several economic and social indicators of host countries. The effect of immigration on innovation and technical change is, however, not much studied. The existing work on the effect of immigrants on innovation is generally limited to the role played by highly educated immigrants, generally immigrants with at least tertiary education, and is mostly focused on the US. Yet, although in anglo saxon countries skilled immigration is a sizeable phenomenon -- according to the Docquier and Marfouk (2006) data the percentages of tertiary educated immigrants were in 2001 40.3% for Australia, 58.8% for Canada, 34.9% for the UK, ad 42.7% for the US -- this is much less the case in European countries, for which just the minority of immigrants are skilled. Just to take a few figures, according to the same source, the percentages of tertiary-educated immigrants were 16.4% for France, 21.8% for Germany, 15.4% for Italy and 18.5% for Spain. Now, although the existing literature has emphasized why there are good reasons to expect positive effects of skilled immigrants on the innovation of the receiving countries, it has much less to say about the general effect of immigrants, or of low-educated immigrants. In this paper, we make an attempt to partly fill the gap concerning the effects of overall immigration on innovation, and in particular of low-skilled immigrants, existing in the literature. In addition to providing evidence for a country which was exposed to a very fast and large wave of immigration during the 2000s -- Italy --, and for which evidence is scant, we also use a very small geographical scale of analysis -- Italian provinces corresponding to NUTS-3 regions --, which presumably enables us to better control for differences in institutional and socio-economic factors which are difficult to observe but which may simultaneously contribute to both attracting new immigrants and to increasing the innovation potential of a region. More importantly, unlike most papers in the literature which only investigated the effect of skilled immigration, (i) we first focus on the general impact of immigration on innovation, and then (ii) separately look at the effects of low-educated and high-educated immigrants on innovation. Last but not least, we tackle potential endogeneity issues by using a well established instrumental variables (IVs, hereafter) strategy based on immigrants' enclaves.

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  • Massimiliano Bratti & Chiara Conti, 2014. "The Effect of (Mostly Unskilled) Immigration on the Innovation of Italian Regions," ERSA conference papers ersa14p485, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa14p485
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    Cited by:

    1. Alessandra Venturini & Claudio Fassio & Sona Kalantaryan, 2015. "Human Resources and Innovation: Total Factor Productivity and Foreign Human Capital," Discussion Papers 29, Central European Labour Studies Institute (CELSI).
    2. Fassio, Claudio & Montobbio, Fabio & Venturini, Alessandra, 2015. "How Do Native and Migrant Workers Contribute to Innovation? A Study on France, Germany and the UK," IZA Discussion Papers 9062, Institute of Labor Economics (IZA).
    3. Harka, Elona & Rocco, Lorenzo, 2019. "Studying More to Vote Less: Education and Voter Turnout in Italy," IZA Discussion Papers 12816, Institute of Labor Economics (IZA).
    4. Labanca, Claudio, 2020. "The effects of a temporary migration shock: Evidence from the Arab Spring migration through Italy," Labour Economics, Elsevier, vol. 67(C).
    5. Bosetti, Valentina & Cattaneo, Cristina & Verdolini, Elena, 2015. "Migration of skilled workers and innovation: A European Perspective," Journal of International Economics, Elsevier, vol. 96(2), pages 311-322.
    6. Fassio, Claudio & Montobbio, Fabio & Venturini, Alessandra, 2015. "How Do Native and Migrant Workers Contribute to Innovation?," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201507, University of Turin.
    7. Jahn, Vera & Steinhardt, Max Friedrich, 2016. "Innovation and immigration — Insights from a placement policy," Economics Letters, Elsevier, vol. 146(C), pages 116-119.
    8. Labanca, Claudio, 2014. "The effects of a temporary migration shock. The case of the Arab Spring migration toward Italy," University of California at San Diego, Economics Working Paper Series qt8m49f3qb, Department of Economics, UC San Diego.
    9. Ozgen, Ceren, 2021. "The Economics of Diversity: Innovation, Productivity, and the Labour Market," IZA Discussion Papers 14344, Institute of Labor Economics (IZA).
    10. Alessandra Michelangeli & Nicola Pontarollo & Giuseppe Vittucci Marzetti, 2019. "Ethnic minority concentration: A source of productivity growth for Italian provinces?," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 17-34, February.
    11. Claudio Fassio & Alessandra Venturini, 2015. "Do native and migrant workers contribute to innovation? Patents dynamic in France, Germany and the UK," RSCAS Working Papers 2015/41, European University Institute.

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    Keywords

    Immigration; Innovation; Patent applications; Regions; Italy;
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    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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