Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305523 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11281
Publisher: 
CESifo GmbH, Munich
Abstract: 
This paper combines two of the most central features of modern labor markets —immigrants and unions —to examine the role of worker power in shaping immigrant sorting across firms, and how that subsequently influences the performance of firms and the careers of incumbent workers. First, unions push immigrants to enter lower-paying and lower-quality firms with weaker union representation. Second, these firms with weaker union representation are able to use the cheaper immigrant labor to scale up production, thereby out-competing firms with stronger union representation and capturing market share. Third, incumbent workers in firms with weaker union representation benefit by shifting into management positions and capturing some of the firm’s increased rents. Fourth, despite benefiting incumbent workers in firms with weaker union representation, these workers are more likely to become union members themselves in response to greater contact with new immigrants. Broadly, our results cut across nearly all sectors but are considerably more muted in competitive markets.
Subjects: 
immigration
worker power
unions
firms
JEL: 
J20
J30
J50
J60
Document Type: 
Working Paper
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