Transcript Diapositiva 1

MIGRATION AND PRODUCTIVITY. LESSONS FROM THE
UK-SPAIN EXPERIENCES
M. KANGASNIEMI (NIESR)
M.MAS (IVIE & U. VALENCIA)
K. ROBINSON (NIESR)
L. SERRANO (IVIE & U. VALENCIA)
Brussels, March 16th 2007
This project is funded by the European Commission, Research Directorate General
as part of the 6th Framework Programme, Priority 8, “Policy Support and
Anticipating Scientific and Technological Needs”
[1]
Objectives
• To analyze the impact of migration on productivity growth,
• Comparing two complementary experiences:
• Spain: with a very recent presence of migrants
• UK: traditional recipient of migration flows *
• From three perspectives:
• Impact on GDP per capita. Alternative Scenarios
• Growth Accounting
• Econometric estimates
* The UK data on migrants are based on the Labour Force Survey micro data, access was provided by the UK Data
Archive whose assistance is gratefully acknowledged.
[2]
MIGRATION AND PRODUCTIVITY
BASIC FACTS
[3]
MIGRATION AND PRODUCTIVITY. BASIC FACTS
Graph 1. Percentage of migrants in total
employment. Spain & UK
14%
12%
10%
8%
6%
4%
2%
[4]
UK
Spain
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
0%
MIGRATION AND PRODUCTIVITY. BASIC FACTS
Graph 2a. Working Age Population/Total
SPAIN
Table 2b. Working Age Population/Total. UK
95,00%
95.00%
90,00%
90.00%
85,00%
85.00%
75.00%
75,00%
70.00%
70,00%
Nationals
[5]
Migrants
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
80,00%
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
80.00%
Nationals
Migrants
MIGRATION AND PRODUCTIVITY. BASIC FACTS
Graph 3b. Activity Rates. UK
Graph 3a. Activity Rates. Spain
Nationals
[6]
Migrants
Nationals
Migrants
06
05
20
04
20
03
20
02
20
01
20
00
20
99
20
98
19
97
19
96
19
95
19
94
19
93
19
92 993 994 995 996 997 998 999 000 001 002 003 004 005 006
9
1 1 1 1 1 1 1 1 2 2 2 2 2 2 2
19
50,00
45,00
40,00
19
70,00
65,00
60,00
55,00
92
80,00
75,00
70,00
65,00
60,00
55,00
50,00
45,00
40,00
80,00
75,00
MIGRATION AND PRODUCTIVITY. BASIC FACTS
Graph 4a. Unemployment rates (%). Spain
[7]
Migrants
Nationals
Migrants
06
05
20
04
20
03
20
02
20
01
20
00
20
99
20
98
19
97
19
96
19
95
19
94
19
19
92
19
19
06
20
20
20
20
20
20
20
19
19
19
19
19
19
19
19
Nationals
05
0,00
04
0,00
03
5,00
02
5,00
01
10,00
00
10,00
99
15,00
98
15,00
97
20,00
96
20,00
95
25,00
94
25,00
93
30,00
92
30,00
93
Graph 4b. Unemployment Rates (%). UK
MIGRATION AND PRODUCTIVITY. BASIC FACTS
Graph 5b. Share of HIGH skill workers on total.
UK
Graph 5a. Share of HIGH skill workers on total.
SPAIN
40.00%
40,00%
35.00%
35,00%
30.00%
30,00%
25.00%
25,00%
20.00%
20,00%
15.00%
15,00%
10.00%
10,00%
5.00%
5,00%
0.00%
0,00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Nationals
[8]
Migrants
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Nationals
Migrants
MIGRATION AND PRODUCTIVITY
GDP PER CAPITA DECOMPOSITION:
ALTERNATIVE SCENARIOS
[9]
GDP PER CAPITA DECOMPOSITION
Equation (1)
Y
WAP AP
L




N
N WAP AP
GDPpc
age
activity
employment
demography
Y = Real GDP
N = Total Population
WAP = Working Age Population
AP = Active Population
L = Employement
[ 10 ]
Y
L
productivity
GDP PER CAPITA DECOMPOSITION
Graph 6a. Contributions to GDP per capita
growth. ACTUAL SPAIN
6,00%
4,00%
2,00%
0,00%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
-2,00%
-4,00%
-6,00%
Age
Activity Rate
Employment
Productivity
Graph 6b. Contributions to GDP per capita growth
ACTUAL UK
6,00%
4,00%
2,00%
0,00%
-2,00%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
-4,00%
-6,00%
Age
[ 11 ]
Activity Rate
Employment
Productivity
GDP PER CAPITA DECOMPOSITION
• SPAIN, THREE SCENARIOS ACCORDING TO DEMOGRAPHY
(INCLUDING LABOR MARKET) VARIABLES:
1. ACTUAL
2. VIRTUAL I: NO MIGRANTS (Substitute in (1) all the
demography variables by the ones corresponding to Spanish
nationals)
3. VIRTUAL II: UKneization (Substitute in (1) all the demography
variables by the ones corresponding to UK aggregate
(migrant+nationals) population)
[ 12 ]
SCENARIOS 1 & 2. ACTUAL AND VIRTUAL I (NO
MIGRANTS)
Graph 7a. Contributions to GDP per capita
growth. VIRTUAL SPAIN I. NO MIGRANTS
Graph 7b. ACTUAL-VIRTUAL I SPAIN
0,80%
6,00%
0,60%
4,00%
0,40%
2,00%
0,20%
0,00%
-2,00%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
0,00%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
-4,00%
-0,20%
-6,00%
-0,40%
Age Activity Rate Employment
[ 13 ]
Age Activity Rate Employment
SCENARIOS 1 & 3. ACTUAL AND VIRTUAL II (UKneization)
Graph 8a. Contributions to GDP per capita
growth. VIRTUAL SPAIN II. UKneization
6,00%
2,00%
4,00%
1,50%
2,00%
1,00%
0,00%
0,50%
-2,00% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
0,00%
-0,50%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
-4,00%
-6,00%
-1,00%
Age Activity Rate Employment
[ 14 ]
Graph 8b. ACTUAL - VIRTUAL II SPAIN
Age Activity Rate Employment
GDP pc (demography induced)
UNDER 3 SCENARIOS
Graph 9. GDP pc growth (demography induced) under
3 Scenarios. SPAIN
140
130
120
110
100
90
80
Actual
[ 15 ]
Virtual I (No Migrants)
Virtual II (Ukneization)
MIGRANTS AND PRODUCTIVITY
GROWTH ACCOUNTING
[ 16 ]
GROWTH ACCOUNTING
  ln  HEMPTOT    ln  HEMPNAT 


Quantity effect
 WMIG   WMIG  

 
 
W
W
 HEMPMIG 
 TOT t  TOT t 1 
 ln 

2
HEMP
TOT 

 WNAT   WNAT  

 
 
W
W
 HEMPNAT 
 TOT t  TOT t 1 

 ln 

2
 HEMPTOT 
WMIG  wMIG  HEMPMIG
WNAT  wNAT  HEMPNAT
___________________
WTOT  WMIG  WNAT
[ 17 ]
Quality effect
GROWTH ACCOUNTING
Table 1a.'GROWTH ACCOUNTING. TOTAL ECONOMY
SPAIN
1996-2000
2000-2004
1996-2004
GVA growth
VAConH
VAConKIT
VAConKNIT
VAConLC
TFP Euklems
4.286
2.498
0.554
1.407
0.304
-0.478
2.888
1.547
0.286
1.447
0.382
-0.774
3.587
2.023
0.420
1.427
0.343
-0.626
VAConHmigrants
VAConLCmigrants
NEW TFP
Total Migrant Contribution to GVA growth
0.278
-0.048
-0.708
0.230
1.056
-0.177
-1.653
0.879
0.667
-0.113
-1.180
0.554
Labour productivity growth
Migrants contribution (Quantity effect)
Migrants contribution (Quality effect)
Migrants total contribution to LP growth
0.370
-0.157
-0.048
-0.205
0.433
-0.623
-0.177
-0.800
0.401
-0.390
-0.113
-0.503
[ 18 ]
GROWTH ACCOUNTING
Table 1b.'GROWTH ACCOUNTING. TOTAL ECONOMY
UK
1987-1996
1996-2000
2000-2004
1996-2004
GVA growth
VAConH
VAConKIT
VAConKNIT
VAConLC
TFP Euklems
2.482
0.140
0.570
0.708
0.142
0.922
2.775
0.664
0.981
0.800
0.439
-0.108
2.302
0.659
0.679
0.582
0.460
-0.078
2.519
0.636
0.804
0.696
0.449
-0.065
VAConHmigrants
VAConLCmigrants
NEW TFP
Total Migrant Contribution to GVA growth
0.013
0.002
0.907
0.015
0.157
0.021
-0.286
0.178
0.289
0.040
-0.407
0.329
0.222
0.030
-0.318
0.252
Labour productivity growth
Migrants contribution (Quantity effect)
Migrants contribution (Quality effect)
Migrants total contribution to LP growth
2.157
-0.005
0.002
-0.004
1.814
-0.070
0.021
-0.049
1.373
-0.118
0.040
-0.078
1.611
-0.094
0.030
-0.063
[ 19 ]
GROWTH ACCOUNTING:
SECTORAL DISAGGREGATION
[ 20 ]
Sectoral Disaggregation
Table 2. Share of migrants in total employment by sectors. 2004
(%)
Total
1 Agriculture
2 Forestry
B FISHING
10 Mining of coal and lignite; extraction of peat
11 Extraction of crude petroleum and natural gas and service
12 Mining of uranium and thorium ores
13 Mining of metal ores
14 Other mining and quarrying
15 Food products and beverages
16 Tobacco products
17 Textiles
18 Wearing Apparel, Dressing And Dying Of Fur
19 Leather, leather products and footwear
20 WOOD AND PRODUCTS OF WOOD AND CORK
21 Pulp, paper and paper products
22 Printing, publishing and reproduction
221 Publishing
22x Printing and reproduction
23 Coke, refined petroleum products and nuclear fuel
24.Chemicals and chemical
244 Pharmaceuticals
24x Chemicals excluding pharmaceuticals
25 Rubber and plastics products
26 OTHER NON-METALLIC MINERAL PRODUCTS
27 Basic metals
28 Fabricated metal products
29 MACHINERY, NEC
30 Office, accounting and computing machinery
31. Electrical machinery and apparatus, nec
313 Insulated wire
31x Other electrical machinery and apparatus nec
32 Radio, television and communication equipment
321 Electronic valves and tubes
322 Telecommunication equipment
323 Radio and television receivers
33 Medical, precision and optical instruments
331t3 Scientific instruments
334t5 Other instruments
34 Motor vehicles, trailers and semi-trailers
35 Other transport equipment
351 Building and repairing of ships and boats
353 Aircraft and spacecraft
35x Railroad equipment and transport equipment nec
36 Manufacturing nec
37 Recycling
[ 21 ]
UK
SPAIN
9,84%
3,35%
3,24%
9,23%
13,54%
13,48%
3,75%
3,44%
13,21%
8,52%
17,72%
3,33%
11,69%
9,43%
9,59%
21,06%
11,83%
2,86%
7,78%
10,68%
4,09%
6,70%
0,00%
10,39%
9,00%
5,57%
6,11%
3,23%
5,71%
7,86%
10,29%
8,50%
7,89%
7,93%
8,53%
8,42%
11,56%
6,73%
7,26%
2,08%
3,06%
6,04%
9,87%
2,59%
8,41%
3,05%
2,02%
3,46%
4,23%
6,89%
4,94%
12,85%
10,47%
11,81%
1,62%
4,58%
7,80%
7,39%
4,44%
5,00%
8,60%
6,52%
1,68%
2,75%
6,19%
7,56%
13,19%
Sectoral Disaggregation
Table 2 (Cont.) Share of migrants in total employment by sectors. 2004
(%)
UK
SPAIN
E ELECTRICITY, GAS AND WATER SUPPLY
1,79%
40x Electricity supply
3,20%
402 Gas supply
6,09%
41 WATER SUPPLY
4,99%
F CONSTRUCTION
5,93%
50 Sale, maintenance and repair of motor vehicles and motorc
5,51%
51 Wholesale trade and commission trade, except of motor veh
9,81%
52 Retail trade, except of motor vehicles and motorcycles; r
8,40%
H HOTELS AND RESTAURANTS
18,32%
60 Inland transport
12,59%
61 Water transport
9,11%
62 Air transport
17,60%
63 Supporting and auxiliary transport activities; activities
10,43%
64 POST AND TELECOMMUNICATIONS
9,23%
65 Financial intermediation, except insurance and pension fu
12,08%
66 Insurance and pension funding, except compulsory social s
8,87%
67 Activities related to financial intermediation
8,27%
70x Other real estate activities
9,36%
71 Renting of machinery and equipment
6,30%
72 Computer and related activities
14,69%
73 Research and development
14,53%
74 Other business activities
741t4 Legal, technical and advertising
10,98%
745t8 Other business activities, nec
14,86%
L PUBLIC ADMIN AND DEFENCE; COMPULSORY SOCIAL SECURITY
7,12%
M EDUCATION
9,08%
N HEALTH AND SOCIAL WORK
11,88%
90 Sewage and refuse disposal, sanitation and similar activi
3,52%
91 Activities of membership organizations nec
10,89%
92 Recreational, cultural and sporting activities
921t2 Media activities
13,01%
923t7 Other recreational activites
8,27%
93 Other service activities
8,01%
P PRIVATE HOUSEHOLDS WITH EMPLOYED PERSONS
18,35%
Q EXTRA-TERRITORIAL ORGANIZATIONS AND BODIES
69,15%
0,37%
15,89%
4,44%
7,56%
5,17%
18,18%
4,85%
1,35%
7,91%
7,94%
7,20%
2,12%
0,93%
9,75%
9,13%
8,24%
6,78%
5,00%
8,08%
0,46%
4,00%
3,44%
4,71%
6,01%
9,48%
7,82%
42,83%
54,66%
Note: Marked with colors when shares are higher than 10%. Spain: yellow; UK: pink; both: green
[ 22 ]
GROWTH ACCOUNTING. SECTORAL DISAGGREGATION
Table 3. Growth Accounting by selected sectors. 1996-2004
Contribution to Output growth
[ 23 ]
SPAIN
UK
Agriculture
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
0.116
0.748
-0.123
0.625
0.248
0.024
0.005
0.028
Manufacturing
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
2.450
0.470
-0.080
0.391
0.324
0.158
0.022
0.180
Construction
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
6.004
1.490
-0.237
1.253
2.410
0.190
0.026
0.215
Trade
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
3.169
0.404
-0.069
0.335
3.593
0.191
0.025
0.216
Hotels and restaurants
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
3.032
1.484
-0.237
1.247
3.442
0.467
0.060
0.527
GROWTH ACCOUNTING. SECTORAL DISAGGREGATION
Table 3 (Cont.). Growth Accounting by selected sectors. 1996-2004
Contribution to Output growth
[ 24 ]
SPAIN
UK
Transport and storage and communication
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
4.938
0.341
-0.058
0.283
5.930
0.369
0.047
0.416
Finance, insurance, real estate and business services
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
4.478
0.340
-0.058
0.282
3.583
0.269
0.038
0.306
Community, social and personal services
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
3.395
0.778
-0.132
0.646
1.708
0.214
0.028
0.242
Private households with employed persons
Output growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to output growth
2.845
6.099
-0.826
5.273
_
_
_
_
GROWTH ACCOUNTING. SECTORAL DISAGGREGATION
Table 4. Growth Accounting by selected sectors. 1996-2004
Contribution to Labour Productivity growth
[ 25 ]
SPAIN
UK
Agriculture
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
0.677
-0.900
-0.123
-1.022
3.806
-0.012
0.005
-0.007
Manufacturing
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
0.999
-0.254
-0.080
-0.334
2.841
-0.037
0.022
-0.015
Construction
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
-2.195
-0.529
-0.237
-0.766
1.466
0.007
0.026
0.033
Trade
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
-0.014
-0.195
-0.069
-0.264
3.033
-0.080
0.025
-0.055
Hotels and restaurants
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
-1.635
-0.525
-0.237
-0.762
1.148
-0.136
0.060
-0.076
GROWTH ACCOUNTING. SECTORAL DISAGGREGATION
Table 4 (Cont.). Growth Accounting by selected sectors. 1996-2004
Contribution to Labour Productivity growth
[ 26 ]
SPAIN
UK
Transport and storage and communication
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
2.013
-0.331
-0.058
-0.389
5.140
-0.107
0.047
-0.059
Finance, insurance, real estate and business services
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
-0.019
-0.434
-0.058
-0.491
0.518
-0.263
0.038
-0.226
Community, social and personal services
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
0.884
-0.180
-0.132
-0.312
-0.140
-0.028
0.028
-0.001
Private households with employed persons
Labour productivity growth
'Migrants contribution (Quantity effect)
'Migrants contribution (Quality effect)
Migrants total contribution to LP growth
-0.598
0.000
-0.826
-0.826
_
_
_
_
Preliminary econometric analysis
[ 27 ]
Preliminary econometric analysis
• Standard Cobb-Douglas production fct
• First difference and fixed effects estimations with year dummies (no
levels available for all variables)
• Different specifications for migrant/native labour input: 1) number of
hours (share*total hours), 2) quality adjusted by the overall labour
quality 3) quality adjusted by separate indices for migrants and nonmigrants (for UK only) 4) migrant share as a separate regressor in
standard prod fct
• Data on migrant shares by industry and characteristics available for
UK 1993 onwards and Spain 2000 onwards
• Estimations for all observations and three industry groups (1) nonservices, (2) retail, transport and communication and (3) other
services
• Separately: regressions of tfp growth on changes in migrant share
and migrant labour input
[ 28 ]
Some results
• Migrant share alone generally not significant as an explanatory
variable in production function but migrants as a separate input are
usually significant
• Migrants may be a selected group but using a separate quality
adjustment for them makes minimal difference for coefficient
estimates: but panel is short and differences between industries
don’t count
• Are migrants more productive than natives in the UK and less
productive than natives in Spain?
• There are considerable differences between industries: how to
control this without splitting the sample?
• Changes in migrant share do not explain contemporaneous tfp
growth
[ 29 ]
Results
[ 30 ]
Extensions to the econometric work
• Using levels rather than indices to capture variation across
industries
• Better control of heterogeneity across industries and dynamic error
structures
• Experimenting with different ways of taking into account the
characteristics of migrants/non-migrants: different skill indices,
ethnic diversity, “old” vs. “new” migrants
• Testing for interaction effects: are migrants complements or
substitutes for capital and skilled/unskilled native labour
• Studying endogeneity of migrant share: do industries with declining
or improving productivity hire migrants, is production technology
adopted related to migrant share?
[ 31 ]
Conclusions
•
•
•
•
•
The characteristics of the migrant population, as well as
its evolution over time and sectoral distribution are
different between the two countries.
GDP per capita growth has been driven by productivity
growth in UK while for Spain the engine of growth has
been demography.
In both countries total migrant contribution to GDP
growth has been positive, while the effect on labor
productivity has been negative.
In both countries, migrants quantity effect has been
positive on output growth and negative on labor
productivity.
In Spain, migrants quality effect has been negative, both
on output growth and on labor productivity, while for the
UK it has been positive.
[ 32 ]
•
•
•
[ 33 ]
Total migrants contribution to output growth is higher in
Spain than in the UK with the exception of Transport &
Storage & Communication and Finance & Insurance
On the contrary, total migrant contribution to productivity
growth is negative in almost all sectors and always
higher in Spain than in the UK.
Preliminary econometric results seem to support the
suggestion that in the UK migrants are more productive
than natives and in Spain vice versa. More work is
needed to refine the econometric estimates.