The Impact of Immigration and Local Workforce Characteristics on Innovation
Economic impacts of immigration working paper series
Acknowledgements
David C Maré
Motu Economic and Public Policy Research
Dave.Mare@motu.org.nz
Richard Fabling
Reserve Bank of New Zealand
Richard.Fabling@rbnz.govt.nz
Steven Stillman
Motu Economic and Public Policy Research
Stillman@motu.org.nz
We are grateful to the Department of Labour and Ministry of Economic Development for funding and logistical support and to Jacques Poot and Rob Hodgson for comments on earlier drafts. This work has been funded as part of the Department of Labour’s Economic Impacts of Immigration research programme.
Disclaimer: This research was undertaken while Richard Fabling was on secondment to Statistics New Zealand and David Maré and Steven Stillman were with Motu Economic and Public Policy Research. Access to the data used in this study was provided by Statistics New Zealand in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Act are allowed to see data about a particular business or organisation. The results of this work have been confidentialised to protect individual businesses from identification. The opinions, findings, recommendations and conclusions expressed in this report are those of the authors. Statistics New Zealand, the Reserve Bank of New Zealand, and Motu take no responsibility for any omissions or errors in the information contained here. The results are based in part on tax data supplied by Inland Revenue to Statistics New Zealand under the Tax Administration Act 1994. This tax data must be used only for statistical purposes, and no individual information is published or disclosed in any other form, or provided back to Inland Revenue for administrative or regulatory purposes. Any person who had access to the unit-record data has certified that they have been shown, have read and have understood section 81 of the Tax Administration Act 1994, which relates to privacy and confidentiality. Any discussion of data limitations or weaknesses is not related to the data’s ability to support Inland Revenue's core operational requirements. Any table or other material in this report may be reproduced and published without further licence, provided that it does not purport to be published under government authority and that acknowledgement is made of this source.
ISBN 978-0-478-36063-9
November 2010
© 2010 Motu Economic and Public Policy Research Trust and the authors. Short extracts, not exceeding two paragraphs, may be quoted provided clear attribution is given. Motu Working Papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review or editorial treatment
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Abstract
We combine firm-level microdata on innovation with area-level workforce characteristics to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes and test for the relationship for selected subgroups of firms. We find a positive relationship between local workforce characteristics and average innovation outcomes in labour market areas, but this is accounted for by variation in firm characteristics such as firm size, industry, and research and development expenditure. After controlling for these influences, we find no systematic evidence of an independent link between local workforce characteristics and innovation outcomes.
JEL classification: O31, R3
Keywords: innovation; immigration; local labour market
