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Immigration and the skill premium

Author

Listed:
  • Alessia Lo Turco

    (UNIVPM - Polytechnic University of Marche [Ancona, Italy] / Università Politecnica delle Marche [Ancona, Italia])

  • Daniela Maggioni

    (Unicatt - Università cattolica del Sacro Cuore [Milano])

  • Federico Trionfetti

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

Data on EU economies show no correlation between low-skilled immigration and the skill premium. We rationalise this evidence in a model where firms face search and screening costs. Low-skilled immigration diminishes the relative benefit of screening skilled workers, leading to a decline in their relative ability within the firm and an undetermined impact on the skill premium. On region-sector and firm level data from 2008 to 2013, we find that low-skilled immigration in Italian regions has reduced skill intensity without affecting the skill premium. Using proxies for workers' ability and screening activity, we provide supporting evidence for the theorised mechanisms.

Suggested Citation

  • Alessia Lo Turco & Daniela Maggioni & Federico Trionfetti, 2024. "Immigration and the skill premium," Working Papers hal-04556685, HAL.
    • Handle: RePEc:hal:wpaper:hal-04556685
    Note: View the original document on HAL open archive server: https://hal.science/hal-04556685
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