Are Immigrants Complements or Substitutes? Evidence from the Audit Industry

Daniel Aobdia (), Anup Srivastava () and Erqiu Wang ()
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Daniel Aobdia: Kellogg School of Management, Northwestern University, Evanston, Illinois 60208
Anup Srivastava: Tuck School of Business, Dartmouth University, Hanover, New Hampshire 03755
Erqiu Wang: Independent author, Atlanta, Georgia 30308

Management Science, 2018, vol. 64, issue 5, 1997-2012

Abstract: Extensive debate exists among policy makers and economists about the employment of highly skilled immigrants in the United States. It remains unclear whether these immigrants perform complementary tasks in addition to their substitutive role relative to native graduates. Empirical studies examining these questions in a focused setting are scarce, principally because of the nonavailability of data. We examine these questions using the audit industry as a setting because of the availability of client, city, and office characteristic data at each audit office. This setting also allows us to answer whether immigration can address the growing human capital constraint in the audit industry. We find evidence of a complementary role of highly skilled immigrants. In addition, our results indicate a reputational spillover of client restatements at the audit office level to the labor markets. Our findings have immigration and education policy implications.

Keywords: high-skilled immigration; human capital; auditing; restatements; reputation (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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