The following article has appeared in the latest edition of the American Economic Review (one of the best academic journals in Economics). Very briefly, and with the aid of a diagram, please explain the article’s main finding using the theory on immigration that we learnt in Chapter 4 (Labor Market Equilibrium). “The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland   By Andreas Beerli, Jan Ruffner, Michael Siegenthaler, and 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-borderworkers 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.”

The following article has appeared in the latest edition of the American Economic Review (one of the best academic journals in Economics). Very briefly, and with the aid of a diagram, please explain the article’s main finding using the theory on immigration that we learnt in Chapter 4 (Labor Market Equilibrium).

“The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland

By Andreas Beerli, Jan Ruffner, Michael Siegenthaler, and 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-borderworkers 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.”