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International trade and labour market integration of immigrants

Lodefalk, Magnus LU ; Sjöholm, Fredrik LU and Tang, Aili (2022) In World Economy 45(6). p.1650-1689
Abstract

We examine whether international trade improves labour market integration of immigrants in Sweden. Immigrants participate substantially less than natives in the labour market. However, trading with a foreign country is expected to increase the demand for immigrants from that country. By hiring immigrants, a firm may access foreign knowledge and networks needed to overcome information frictions in trade. Using granular longitudinal matched employer–employee data and an instrumental variable approach, we estimate the causal effects of a firm’s bilateral trade on employment and wages of immigrants from that country. We find a positive, yet heterogeneous, effect of trade on immigrant employment but no effect on immigrant wages.

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author
; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
employment, export, immigrants, import, wages
in
World Economy
volume
45
issue
6
pages
1650 - 1689
publisher
Wiley-Blackwell
external identifiers
  • scopus:85124478724
ISSN
0378-5920
DOI
10.1111/twec.13240
language
English
LU publication?
yes
id
1dfc216b-9477-4dcf-8ced-670ac28222fc
date added to LUP
2022-04-13 12:32:53
date last changed
2022-06-30 16:53:21
@article{1dfc216b-9477-4dcf-8ced-670ac28222fc,
  abstract     = {{<p>We examine whether international trade improves labour market integration of immigrants in Sweden. Immigrants participate substantially less than natives in the labour market. However, trading with a foreign country is expected to increase the demand for immigrants from that country. By hiring immigrants, a firm may access foreign knowledge and networks needed to overcome information frictions in trade. Using granular longitudinal matched employer–employee data and an instrumental variable approach, we estimate the causal effects of a firm’s bilateral trade on employment and wages of immigrants from that country. We find a positive, yet heterogeneous, effect of trade on immigrant employment but no effect on immigrant wages.</p>}},
  author       = {{Lodefalk, Magnus and Sjöholm, Fredrik and Tang, Aili}},
  issn         = {{0378-5920}},
  keywords     = {{employment; export; immigrants; import; wages}},
  language     = {{eng}},
  number       = {{6}},
  pages        = {{1650--1689}},
  publisher    = {{Wiley-Blackwell}},
  series       = {{World Economy}},
  title        = {{International trade and labour market integration of immigrants}},
  url          = {{http://dx.doi.org/10.1111/twec.13240}},
  doi          = {{10.1111/twec.13240}},
  volume       = {{45}},
  year         = {{2022}},
}