Working Paper: NBER ID: w25302
Authors: Andreas Beerli; Jan Ruffner; Michael Siegenthaler; Giovanni Peri
Abstract: We study a reform that granted European cross-border workers free access to the Swiss labor market and had a stronger effect on regions close to the border. The greater availability of cross-border workers increased foreign employment substantially. Although many cross-border workers were highly educated, wages of highly educated natives increased. The reason is a simultaneous increase in labor demand: the reform increased the size, productivity, and innovation performance of skill-intensive incumbent firms and attracted new firms, creating opportunities for natives to pursue managerial jobs. These effects are mainly driven by firms that reported skill shortages before the reform.
Keywords: immigration; labor market; cross-border workers; Switzerland
JEL Codes: F22; J22; J24; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| immigration reform (K37) | foreign employment (F22) |
| foreign employment (F22) | labor demand (J23) |
| labor demand (J23) | wages for highly educated native workers (J39) |
| immigration reform (K37) | productivity and innovation of firms (O31) |
| productivity and innovation of firms (O31) | wages for highly educated native workers (J39) |
| skill shortages before reform (J24) | productivity gains (O49) |
| productivity gains (O49) | expansion and increased hiring of skilled workers (J23) |
| influx of CBW (H56) | managerial opportunities for natives (F23) |
| managerial opportunities for natives (F23) | positive wage effects for highly educated natives (J69) |
| influx of CBW (H56) | average employment levels of Swiss natives (J69) |