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Does low-skilled immigration increase profits? Evidence from Italian local labour markets

Giorgio Brunello (), Elisabetta Lodigiani () and Lorenzo Rocco ()

Regional Science and Urban Economics, 2020, vol. 85, issue C

Abstract: We study the effects of low-skilled immigration on firm profits, average wages, employment, capital and total factor productivity (TFP) by combining firm-level and local labour market data from Italy. We find that low-skilled immigration increases profits by reducing average wages and total labour costs. This effect is small on average, but about ten times larger for firms operating in local labour markets with a high share of low-skilled employment than for other firms. In these areas, the substitution effects triggered by immigration reduce average wages much more than elsewhere.

Keywords: Low-skilled immigration; Profits; Local labor markets (search for similar items in EconPapers)
JEL-codes: J24 J61 L25 (search for similar items in EconPapers)
Date: 2020
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Related works:
Working Paper: Does Low Skilled Immigration Increase Profits? Evidence from Italian Local Labour Markets (2019) Downloads
Working Paper: Does Low Skilled Immigration Increase Profits? Evidence from Italian Local Labour Markets (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:85:y:2020:i:c:s0166046220302672

DOI: 10.1016/j.regsciurbeco.2020.103582

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