Immigrants Can Unlock Productivity Growth

5/16/2017 - Professor of Economics Giovanni Peri at Bloomberg View.

Immigration has been making economies demonstrably more productive ever since there have been accurate output statistics. It's not a straightforward effect, however: The immigrants need to be well-suited to the needs of the receiving country's labor market.

More recently, in the years between 1990 and 2010, an influx of techies on H-1B visas has been found to increase productivity in the cities where they arrived. 

One of the authors of the H-1B paper, Giovanni Peri, a University of California, Davis scholar who is originally from Italy, has done a lot of research on immigration's economic effect, including its implications for productivity. Working with datasets from different countries and types of firms, he has shown that adding immigrants to the workforce pushes locals into more communication-oriented jobs, which smooths business processes and helps increase productivity. It also helps companies to expand geographically, using the immigrants' knowledge of their home countries; the export growth also results in higher productivity. 

Read the full story at Bloomberg View.