Emigration and Firm Productivity: Evidence from the Sequential Opening of EU Labour Markets

Yvonne Giesing and Nadzeya Laurentsyeva

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: This paper establishes a causal link between the emigration of skilled workers and firm performance. We exploit time, country, and industry differences in the opening of EU labour markets from 2004 to 2014 as a source of exogenous variation in the emigration rates from new EU member states. Using firm-level panel data from ten East European countries, we show that the outflow of skilled workers reduces firm total factor productivity and increases personnel costs. One explanation for this effect is the increased job turnover, which lowers firm-specific human capital. We find that the most productive firms adapt more easily to emigration as they are better able to retain and train their workers.

JEL-codes: D24 F22 O15 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-int and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145850

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