Trade, Migration and Integration – Evidence and Policy Implications
Hatzigeorgiou, A. & Lodefalk, M. (2015). Trade, Migration and Integration – Evidence and Policy Implications. The World Economy, 38(12), 2013-2048. DOI: 10.1111/twec.12236
Hatzigeorgiou, A. & Lodefalk, M. (2015). Trade, Migration and Integration – Evidence and Policy Implications. The World Economy, 38(12), 2013-2048. DOI: 10.1111/twec.12236
This paper takes as its point of departure the unique position recently adopted by Swedish policymakers emphasising migration as a tool to increase trade. We attempt to empirically scrutinise this position. Our results demonstrate that migrants stimulate exports, especially along the extensive product margin of trade and for differentiated products, but have no significant impact on imports. This finding suggests that for small open economies where numerous immigrants are refugees, the strategy of using migration to facilitate trade may only be effective with respect to exports. This paper also contributes to the literature on trade and migration by exploiting data on gender and age, which allow us to draw inferences on the underlying impact channels. We adopt an instrumental variable approach to address the endogeneity issue due to potential reverse causality. The pattern of results is consistent with the hypothesis that migration primarily reduces fixed trade costs resulting from information and trust friction across migrant host and source countries. Importantly, the results imply that policymakers may be able to promote trade by improving immigrants’ labour market integration instead of simply being restricted to promoting more liberal immigration policies, which is generally more controversial.
2023
Ratio Working Paper Series.
This paper documents novel facts on within-occupation task and skill changes over the past two decades in Germany. In a second step, it reveals a distinct relationship between occupational work content and exposure to artificial intelligence (AI) and automation (robots). Workers in occupations with high AI exposure perform different activities and face different skill requirements compared to workers in occupations exposed to robots. In a third step, the study uses individual labour market biographies to investigate the impact on wages between 2010 and 2017. Results indicate a wage growth premium in occupations more exposed to AI, contrasting with a wage growth discount in occupations exposed to robots. Finally, the study further explores the dynamic influence of AI exposure on individual wages over time, uncovering positive associations with wages, with nuanced variations across occupational groups.
2023
Ratio Working Paper Series.
We unbox developments in artificial intelligence (AI) to estimate how exposure to these developments affect firm-level labour demand, using detailed register data from Denmark, Portugal, and Sweden over two decades. Based on data on AI capabilities and occupational work content, we develop and validate a time-variant measure for occupational exposure to AI across subdomains of AI, including language modelling. According to our model, white collar occupations are most exposed to AI, and especially white collar work that entails relatively little social interaction. We illustrate its usefulness by applying it to near-universal data on firms and individuals from Sweden, Denmark, and Portugal, and estimating firm labour demand regressions. We find a positive (negative) association between AI exposure and labour demand for high-skilled white (blue) collar work. Overall, there is an up-skilling effect, with the share of white-collar to blue collar workers increasing with AI exposure. Exposure to AI within the subdomains of image and language are positively (negatively) linked to demand for high-skilled white collar (blue collar) work, whereas other AI-areas are heterogeneously linked to groups of workers.
2023
Journal of International Economics, 103831.
Information frictions make foreign trade risky. In particular, the risk of buyer default deters firms from selling abroad. To address this issue, many countries offer export credit guarantees to provide insurance to exporters. In this paper, we investigate the causal effects of guarantees by exploiting a quasi-natural experiment in Sweden and rich register data on guarantees, firms and trade. Estimates from a fuzzy regression discontinuity design show large positive effects on the probability of exporting and the value of exports to the destination for which the guarantees are issued. These results are robust to an alternative approach using a difference-in-differences matching estimator. Further findings suggest that guarantees impact firms heterogeneously and play an important role in resolving buyer default risk and easing liquidity constraints. Larger impacts are observed in non-OECD countries, on smaller, liquidity constrained exporters and for firms selling products that face a relatively high cost of buyer default.