Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/310924 
Year of Publication: 
2025
Series/Report no.: 
GLO Discussion Paper No. 1562
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
This study examines whether trade competition from low-wage countries (LWCs) can influence immigration patterns in an advanced economy. We focus on Italy between 2003 and 2013, a period characterized by rising market pressure from China and Eastern Europe. Using census data on sectoral employment, administrative records on immigrants by nationality, and disaggregated bilateral trade data, we investigate whether heightened import competition acted as a pull factor for migrant workers at the local labor market level. To identify the exogenous component of these trade shocks, we adopt a shift-share instrumental variable strategy, while disaggregating immigrant data by nationality allows us to control in detail for the role of local networks and for bilateral push and pull factors. Our findings indicate that trade competition from LWCs significantly increased local immigrant shares. We hypothesize, and provide indirect evidence, that firms under competitive pressure tried to cut labor costs by relying on a more flexible, lower-paid workforce, primarily composed of foreign workers.
Subjects: 
Import competition
International migration
Trade shocks
Italy
JEL: 
F14
F16
F22
J61
Document Type: 
Working Paper

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