Extra‐EU immigrants and labour productivity: New evidence from Italian firms

Author:

Vittori Claudia1ORCID,Ricci Andrea2,Ferri Valentina2ORCID

Affiliation:

1. Department of Political Science Università degli studi di Roma Tre Rome Italy

2. INAPP—National Institute for Public Policy Analysis Rome Italy

Abstract

AbstractThis paper investigates the impact of extra‐EU workers on labour productivity in Italy. To this aim, we take advantage of firm‐level data derived from the Rilevazione Imprese e Lavoro (RIL‐AIDA) surveys merged with the AIDA‐Bureau Van Dijk archive over the period 2007–2015. Using an econometric strategy that accounts for firms' observed heterogeneity and endogeneity issues, we obtain the following results. First, an increase in the share of extra‐EU workers leads to a decline in labour productivity. Second, the relationship between extra‐EU workers and productivity appears to be different between firms located in centre‐north and those in southern regions. Third, the share of extra‐EU workers is also associated with a decline in average wages and sales per employee, even though this effect is less than that observed for productivity. Our findings support the hypothesis that the demand of immigrants arises as a labour cost reduction strategy and hence tends to weaken firms' competitiveness.

Publisher

Wiley

Subject

Political Science and International Relations,Economics and Econometrics,Finance,Accounting

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