Scandinavian Working Papers in Economics
Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics
No 13/2024: Worker Power, Immigrant Sorting, and Firm Dynamics
Mikko Silliman () and Alexander Willén ()
Additional contact information
Mikko Silliman: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Alexander Willén: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Abstract: This paper examines how worker power shapes the allocation of immigrants across firms, and the subsequent consequences of such sorting on firm performance and the careers of incumbent workers. Our analysis highlights several key results. First, unions push immigrants to enter less unionized, lower-paying, and lower-quality firms. Second, the less unionized firms are able to utilize the access to cheaper immigrant labor to scale up production, thereby outcompeting the more unionized firms and capturing market share. Third, incumbent workers in less unionized firms benefit by shifting into management positions and capturing some of the firm’s increased rents. Fourth, despite benefiting incumbent workers in less unionized firms, these workers are more likely to become union members themselves in response to greater contact with new immigrants. Broadly, our results cut across nearly all sectors, but are heightened in labor intensive firms, and muted in competitive markets.
Keywords: Immigration; Worker Power; Unions; Firms
Language: English
78 pages, July 5, 2024
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