Worker Power, Immigrant Sorting, and Firm Dynamics

Mikko Silliman (mikko.silliman@nhh.no) and Alexander Willén (alexander.willen@nhh.no)
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Mikko Silliman: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway, https://sites.google.com/site/mikkosilliman

No 13/2024, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics

Abstract: This paper examines how worker power shapes the allocation of immigrants across firms, and the subsequent consequences of such sorting on firm performance and the careers of incumbent workers. Our analysis highlights several key results. First, unions push immigrants to enter less unionized, lower-paying, and lower-quality firms. Second, the less unionized firms are able to utilize the access to cheaper immigrant labor to scale up production, thereby outcompeting the more unionized firms and capturing market share. Third, incumbent workers in less unionized firms benefit by shifting into management positions and capturing some of the firm’s increased rents. Fourth, despite benefiting incumbent workers in less unionized firms, these workers are more likely to become union members themselves in response to greater contact with new immigrants. Broadly, our results cut across nearly all sectors, but are heightened in labor intensive firms, and muted in competitive markets.

Keywords: Immigration; Worker Power; Unions; Firms (search for similar items in EconPapers)
JEL-codes: J12 J13 J15 J16 (search for similar items in EconPapers)
Pages: 78 pages
Date: 2024-07-05
New Economics Papers: this item is included in nep-bec, nep-lab, nep-mig and nep-sbm
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Related works:
Working Paper: Worker Power, Immigrant Sorting, and Firm Dynamics (2024)
Working Paper: Worker Power, Immigrant Sorting, and Firm Dynamics (2024)
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