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Worker Power, Immigrant Sorting, and Firm Dynamics

Author

Listed:
  • Mikko Silliman
  • Alexander Willén
  • Alexander L.P. Willén
Abstract
This paper combines two of the most central features of modern labor markets —immigrants and unions —to examine the role of worker power in shaping immigrant sorting across firms, and how that subsequently influences the performance of firms and the careers of incumbent workers. First, unions push immigrants to enter lower-paying and lower-quality firms with weaker union representation. Second, these firms with weaker union representation are able to use the cheaper immigrant labor to scale up production, thereby out-competing firms with stronger union representation and capturing market share. Third, incumbent workers in firms with weaker union representation benefit by shifting into management positions and capturing some of the firm’s increased rents. Fourth, despite benefiting incumbent workers in firms with weaker union representation, 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 considerably more muted in competitive markets.

Suggested Citation

  • Mikko Silliman & Alexander Willén & Alexander L.P. Willén, 2024. "Worker Power, Immigrant Sorting, and Firm Dynamics," CESifo Working Paper Series 11281, CESifo.
    • Handle: RePEc:ces:ceswps:_11281
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    References listed on IDEAS

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    More about this item

    Keywords

    immigration; worker power; unions; firms;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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