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Emigration and Firm Productivity: Evidence from the Sequential Opening of EU Labour Markets

Author

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  • Giesing, Yvonne
  • Laurentsyeva, Nadzeya
Abstract
This paper establishes a causal link between the emigration of skilled workers and firm performance. We exploit time, country, and industry differences in the opening of EU labour markets from 2004 to 2014 as a source of exogenous variation in the emigration rates from new EU member states. Using firm-level panel data from ten East European countries, we show that the outflow of skilled workers reduces firm total factor productivity and increases personnel costs. One explanation for this effect is the increased job turnover, which lowers firm-specific human capital. We find that the most productive firms adapt more easily to emigration as they are better able to retain and train their workers.

Suggested Citation

  • Giesing, Yvonne & Laurentsyeva, Nadzeya, 2016. "Emigration and Firm Productivity: Evidence from the Sequential Opening of EU Labour Markets," VfS Annual Conference 2016 (Augsburg): Demographic Change 145850, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc16:145850
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    References listed on IDEAS

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    Cited by:

    1. Gancho Ganchev & Mariya Paskaleva, 2019. "The Relationship between Workforce Migration and the Basic Macroeconomic Variables of the Countries from Central Eastern Europe with a Focus on Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 45-69.

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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