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Foreign Human Capital and Total Factor Productivity: A Sectoral Approach
Author(s) -
Fassio Claudio,
Kalantaryan Sona,
Venturini Alessandra
Publication year - 2020
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12426
Subject(s) - endogeneity , productivity , human capital , economics , total factor productivity , diversity (politics) , economic geography , instrumental variable , demographic economics , labour economics , economic growth , econometrics , political science , law
We analyze the role of migrants in productivity growth in the three largest European countries—France, Germany and the United Kingdom—in the years 1994–2007, using Total Factor Productivity. Unlike previous research, which mainly employs a regional approach, our analysis is at the sectoral level: this allows to distinguish the real contribution of migrants to productivity from possible inter‐sectoral complementarities, which might also foster growth. We control for the share of migrants and the different components of human‐capital, such as education, age and diversity, and adopt instrumental variables strategies to address the possible endogeneity of migration. The results show that migrants contribute to the productivity of the sectors in which they are employed, but with important differences: highly‐educated migrants show a larger positive effect in high‐tech sectors, and to a lesser extent in services sector. The diversity of countries of origin contributes to productivity growth only in the services sectors.