sona kalantaryan - which migrants are needed for growth and innovation

Sona Kalantaryan, Migration Policy Centre, EUI, Florence

Forum on Migration, Citizenship and Demography, Conference on Demography

Migration Policy Centre, EUIFriday 5th, February 2016

Which migrants are needed for growth and innovation?

08/02/2016 MPC - www.migrationpolicycentre.eu 1

Challenges: Europe is facing are

• Global Recession• Global CompetitionAging of the population

� Composition: share of elderly (65/20-64) 28%, on the (75/20-74) 13% and share of young.

� Aging of the skills: � Size: EU population is declining 9% every ten years without

migration, with the same migration by 4%.

The role of innovation: Finding a positive effect of immigration on innovation seems the last resort to introduce more open migration policies.



Source: Global Creativity Index 2015 by the Martin Prosperity Institute

Global Creativity Index 2015


Source: Global Creativity Index 2015 by the Martin Prosperity Institute


Defining innovation

“Innovation is the implementation of a newor significantlyimproved product (good or service) or process, a newmarketingmethod or a neworganizational method in business practices,workplace organization or external relations.” (OSLOManual,OCDE 2005, page 12)

The most popular indicators of innovation are

�The number of Patent applicationsInnovative capacity of a country

�Total Factor ProductivityTechnical progress in its broadest sense

Reference Literature � Migrants: migration per se can have positive effects on the

productivity growth of destination countries (Ortega and Peri2014).

� Skilled migrants: Positive effect for skilled migration on innovative outcomes in some European countries (Gagliardi, 2011; Bosetti, Cattaneo and Verdolini, 2015).

� Diversity: (Mostly) Positive effect (innovative performances of firms, regions and countries) (Alesina, Harnoss and Rapoport, 2013; Ozgen, Nijkamp and Poot, 2012).

!! Regional vs Sectorial approach !!


What do we miss?

� Innovation has importantsectoral specificities that might be nottaken into account.

� Is there anage dividend for innovation? Is it different fordifferent employment categories?

In knowledge intensive sectors inventors are younger. Decline ofhuman capital over the life cycle (e.g. Levin, Stephan 1991, Lissoniet al. 2010).Age dividend. Investment in additional accumulation of humancapital (Jones, 2010; Frosch, 2011)

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Human resources and innovation: Total Factor Productivity and foreign human capital (Fassio, Kalantaryan and Venturini, 2015)

Objective of the study: Assessing the relationship between human capital components of foreign labor force (size, level of education, age diversity of countries of origin) and innovation at industrial level.

� Alternative approach: Allows to control for the role of migrants workers and diversity by country of origin at the production level vs. territorial level.

Three largest countries (Germany, France and UK) for 15 years each (1994-2008), 31 sectorsData: LFS, Microcesus and Klems (TFP)(Heterogeneity in terms of industrial structure, age, skill and migration policy)


Results� Overall migrants are relevant inall sector;� Foreign workers’ effect on the TFP isnot uniform in different sectors -

=> sector-based analysis is more accurate and provides a deeperunderstanding of the phenomena that can drive a more accuratemigration policy.

� highly-educated migrants show a larger positive effect in the high-techsectors;

� middle- and low-educated ones are more relevant in manufacturing.� On average the share of migrants on total employment is not higher than

10% in the three countries considered,� An increase from10% to 11% (which amounts to a 10% increase of the

share of migrants) would lead TFP to increase by 2% in manufacturingand services and about 3% in high tech sectors (where the effect isstronger).

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Results: Age �Manufacturing and high-tech sectors: the average age of migrants and its squared term are significant and respectively negative and positive. => positive effect of young age on innovation.

�High-tech sectors: effect is negative for migrants (young educated migrants contribute more to the increase of TFP), while it is positive for natives=> job-experience’s different role among the two types of workers.

�Services sectors: the average age of migrants is positive and significant, while its square term is negative. => experience on the job is more important and thus older migrants contribute more to TFP growth.


Results � The diversity of countries of origin contributes to innovation only

in the services sectors => the complementarity between sectorsrather than the contribution of different national skills.

Important! Diversity should not guide the migration policy whichinstead should be linked to the specific demand for labour of thefirms and not to pursue a generic search for highly skilled migrants.

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The Percentage of the highly educated among the foreign- and native-born of working age for selected European countries

Age 15-64 years old, 2013

Source: Source: OECD, International Migration Outlook (2014), author’s elaborations.

0

5

10

15

20

25

30

35

40

45

50

Foreign-born

Native-born


Overqualification of among the foreign- and native-born for selected European countries

Age 15-64 in 2009-2010

Source: OECD, Settling In: OECD Indicators of Immigrant Integration 2012 - OECD 2012. author’s elaborations.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Foreign-born

Native-born


Immigrants and native-born relative mismatch across host countries

Mariya Aleksynska, Ahmed Tritah, Economics of Education Review, Volume 36, 2013.

Conclusion/Recommendations � Migration policy should not beone fit all on the contrary it

has tosector specific and demand driven;

� Supply side driven policies create brain waste and havedifferent motivations;

� Quota system which favours specific national human capital isnot efficient;

� More efforts should be directed to guarantee propermechanisms enablingcross border transfer of skills;

� Enhance the innovative potential through allowing thehighskilled to remain after they graduate.



Thank You

sona kalantaryan - which migrants are needed for growth and innovation

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