International Trade and Labor Market Integration of Immigrants

We examine whether international trade improves labour market integration of immigrants in Sweden. Immigrants participate substantially less than natives the market. However, trading with a foreign country is expected to increase demand for from that country. By hiring immigrants, firm may access knowledge and networks needed overcome information frictions trade. Using granular longitudinal matched employer–employee data an instrumental variable approach, we estimate causal effects firm’s bilateral on employment wages find positive, yet heterogeneous, effect immigrant but no wages.