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

Michael Lucht and Anette Haas
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Michael Lucht: IAB
Anette Haas: Institute for Employment Research (IAB), Nuremberg, Germany

No 201505, IAB-Discussion Paper from 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))

Keywords: Bundesrepublik Deutschland; Ausländerquote; ausländische Arbeitnehmer; Auswirkungen; Einwanderer; Einwanderung; Inländer; Lohnkosten; Lohnunterschied; Produktivitätseffekte; regionale Disparität; regionale Verteilung; regionaler Arbeitsmarkt; Wettbewerbsfähigkeit; Arbeitsproduktivität (search for similar items in EconPapers)
JEL-codes: J15 J24 J61 R23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015
New Economics Papers: this item is included in nep-eff, nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:201505

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