The Effect of Immigration on Productivity: Evidence from U.S. States

Article Source: Review of Economics and Statistics, Vol. 94:1, pp. 348–358, MIT Press, 2012
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U.S. states receiving large immigration flows had stronger investment and growth than those that had small inflows.


Policy Relevance:

Attracting immigrants, especially highly educated ones, is a strategy to increase employment, investment and productivity in a local economy.


Key Takeaways:
  • This paper analyzes the long-run impact of immigration on employment, investment and productivity in U.S. states from 1960 to 2005.
  • There is no evidence that immigrants crowded-out employment. At the same time, immigration had a strong positive association with investments and with total factor productivity (TFP).
  • These results are consistent with the idea that immigrants promoted efficient task specialization, thus increasing TFP, and they also promoted the expansion of the economy via investments.



Giovanni Peri

About Giovanni Peri

Giovanni Peri is Professor of Economics at the University of California, Davis. Additionally, he is a Research Associate at the National Bureau of Economic Research in Cambridge, Massachusetts, and the founding director of the UC Davis Global Migration Center, an interdisciplinary research group focusing on international migrations. His research focuses on the impact of international migrations on labor markets and productivity of the receiving countries and on the determinants of international migrations.