Foreign Workers, Product Quality, and Trade: Evidence from a Natural Experiment

Andrea Ariu

No 14859, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper shows that international labor mobility attenuates information frictions, and leads to higher-quality products, more trade, and more effective global value chains. Exploiting the variation in the time and intensity at which Swiss postal codes were hit by the increasing availability of foreign workers due to the implementation of the Swiss-EU Agreement on the Free Movement of Persons, I find that the inflow of high-skilled European workers led to an upgrade in the quality of inputs imported from their origin countries. Better intermediates improved the quality of output, making Swiss products more appealing for international markets and boosting exports. Therefore, the efficacy of Swiss global value chains improved: upstream thanks to higher-quality intermediate inputs brought by the intensification of the existing buyer-seller relations; and downstream because higher-quality products eased increasing exports to existing buyers and helped finding new customers, especially in distant destinations.

Keywords: Information frictions; Labor mobility; Innovation; Trade; Gvcs (search for similar items in EconPapers)
JEL-codes: F14 F16 F22 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://cepr.org/publications/DP14859 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Foreign workers, product quality, and trade: Evidence from a natural experiment (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14859

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14859

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().