Real Estate & Planning Research Seminar by Prof Max Nathan, University College London. Title: Migration, diversity, and firm performance

Abstract:

We look at the effects of migrant workers and migrant diversity on firm performance, using a novel worker-firm dataset – leveraging over 800,000 online worker profiles – to identify impacts and mechanisms. In theory, migrant workers can boost firms’ innovation and/or productivity through improving human capital, improved task specialisation, or via diverse teams’ role in ideas generation/scrutiny. Conversely, workplace frictions could damage performance. In practice, evidence on migration-productivity effects is mixed, with effect sizes varying considerably across countries, industries and worker types.

Two major challenges here are the lack of employer-employee datasets in many countries, and limitations in coverage / dimensionality in those that do exist. Data from online platforms and the web may help meet these challenges. We combine individual education and career histories from the Diffbot knowledge graph with the UK company register, alongside financial data from Orbis Historical, 2007-2023 and extensive validation. We focus on larger UK firms across a range of sectors, and define migrants through lowest observed countries of education. We use panel fixed effects, placebo tests and GMM/IV settings to get closer to identification.

We find a positive but non-significant link from firms’ overall migrant share to productivity measures. Since this does not rule out an effect, we use our granular worker-level data to explore potential migrant-productivity channels in more detail. We find that migrant worker specialisation into technical roles is linked to higher firm innovation, and that migrant workers carry distinctive, and more complex, skills than natives in the same jobs.

Bio:

Max Nathan is Professor of Economic Geography at CASA, University College London, an associate in the CEP Urban Programme and a Research Fellow at IZA. He is an economic geographer with a background in public policy. His work looks at urban economic development, especially innovation systems and clusters; immigration and diversity; and public policy for cities. Before academia Max worked in think tanks, consultancy and central government. He co-founded the Centre for Cities think tank in 2004, and the What Works Centre for Local Economic Growth in 2013, where he was a Deputy Director until 2021.