[Journal:] IZA Journal of Migration [ISSN:] 2193-9039 [Publisher:] Springer [Place:] Heidelberg [Volume:] 2 [Year:] 2013 [Pages:] 1-31
This paper exploits the episode provided by the mass migration from the former Soviet Union to Israel in the 1990s to study the effect high skill immigration on productivity. Using a unique data set on manufacturing firms, I investigate directly whether firms and industries with a higher concentration of immigrants experienced increases in productivity. The analysis finds no correlation between immigrant concentration and productivity at the firm level in cross-sectional and pooled regressions. First-differences estimates reveal, if anything, a negative correlation between the change in output per worker and the change in the immigrant share. The immigrant share was strongly negatively correlated with productivity in low-tech industries. In high-technology industries, the results point to a positive relationship, hinting at complementarities between technology and the skilled immigrant workforce.