Skilled Immigration, Task Allocation and the Innovation of Firms

View the recording of the seminar here

Speaker: Gianluca Orefice, Professor, Economics, University of Paris-Dauphine

Abstract:

This seminar analyses the impact of skilled migrants on the innovation (patenting) activity of French firms, and investigates the underlying mechanism. We present district-level and firm-level estimates and address endogeneity using a modified version of the shift-share instrument. Skilled migrants increase the number of patents at both the district and firm level. Large, high-productivity and capital-intensive firms benefit the most, in terms of innovation activity, from skilled immigrant workers. Importantly, we provide evidence that one channel through which the effect works is task specialization. The arrival of skilled immigrants pushes French skilled workers towards language-intensive, managerial tasks while foreign skilled workers specialize in technical, research-oriented tasks. Through this channel, greater innovation is the result of productivity gains from specialization.