Migration and foreign trade: Further results

In this note, we use the production-theory approach to immigration in an open-economy setting to investigate the role of nonresident workers in Swiss aggregate production. Unlike earlier work in this area, exports are explicitly taken into account. Indeed, a statistical test for global separability between inputs and outputs reveals that exports and products intended for domestic use cannot be aggregated. Our results show that immigration tends to stimulate imports and to shift the output mix towards nontraded goods, thereby impacting negatively on the trade account.