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This paper estimates the impact of migration on productivity by estimating production functions for British firms. We find that much of the apparent higher productivity of migrants is the result of sorting across areas, industries, and firms. If we include firm fixed effects, the estimated productivity advantage of migrants over locals is not significantly different from zero. One possible interpretation of our results is that migrants and locals with similar skills are equally productive; there is nothing distinctive about migrants. However, since productivity estimates are imprecise after controlling for firm fixed effects, we also can’t reject the hypothesis that migrants and locals differ in their productivity.
