Immigrant Employment in Intermediate Sectors Enhances Downstream Export Performance
A sector’s export performance depends not only on the immigrant labour it employs directly, but also on immigrant workers employed in upstream sectors.
By Amandine Aubry, Anthony Edo
PostA substantial body of research has shown that export-oriented sectors with a high intensity of immigrant labour tend to perform better. By reducing transaction and communication costs with countries of origin, immigration fosters exports of goods to those countries. Immigrants, particularly the highly skilled, also bring a set of knowledge and competencies that complement those of other workers, thereby strengthening firms’ productivity and supporting their export activity.
A study by CEPII, focusing on the United States over the period 2003–2017, shows that an additional channel affects the performance of exporting sectors: an increase in immigrant employment in upstream industries leads to higher exports in downstream sectors. This effect partly stems from improvements in productive efficiency, which lower the cost of upstream inputs. Focusing on the 20 largest intermediate sectors in the United States in 2017, ranked by sales value, immigrants are found to be particularly well represented in agricultural crops (wheat, maize), electronics (components, printed circuit boards), and R&D activities (laboratories, product design). Exporting sectors that rely on these industries therefore benefit from the presence of immigrants employed in them and from the associated productivity gains.
For further analysis, see Sectoral Linkages and the Impact of Immigration on Export Performance.
A study by CEPII, focusing on the United States over the period 2003–2017, shows that an additional channel affects the performance of exporting sectors: an increase in immigrant employment in upstream industries leads to higher exports in downstream sectors. This effect partly stems from improvements in productive efficiency, which lower the cost of upstream inputs. Focusing on the 20 largest intermediate sectors in the United States in 2017, ranked by sales value, immigrants are found to be particularly well represented in agricultural crops (wheat, maize), electronics (components, printed circuit boards), and R&D activities (laboratories, product design). Exporting sectors that rely on these industries therefore benefit from the presence of immigrants employed in them and from the associated productivity gains.
For further analysis, see Sectoral Linkages and the Impact of Immigration on Export Performance.
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