Migration, Production Structure and Exports Some New Evidence from Italy

In this paper we study the e↵ect of migration in a two-sector model where production is performed with one freely mobile factor and sector-specific CES composites of two labor services ‐ simple and complex tasks. Tasks’ supply is provided by migrants and natives; they di↵er in terms of productivity in performing the di↵erent tasks. The model shows that an inflow of migrants has an e↵ect on the production structure in favor of the sector that needs more intensively simple tasks, like manufacturing, in the spirit of the Rybczynski e↵ect. In this version of the model the owners of the freely mobile factor gains from immigration in real and nominal terms. We take advantage of a detailed data set of migrants’ work permits at the provincial level (NUTS3) in Italy to assess the e↵ect of migrants’ inflows on the production and export structure of the Italian provinces in 1995-2008. By assuming that the service sector is relatively more intensive in complex rather than simple tasks with respect to the manufacturing sector, our theoretical model is confirmed by the data. Provinces that receive more migrants happen to show an increase in the manufacturing-to-services ratio in value-added terms. The same pattern is confirmed in the export structure. Nationality