Article Giovanni Peri

Needed but not wanted
Giovanni Peri cited in The Economist

The Economist, October 1, 2016

STOKE-ON-TRENT in northern England is home to the world’s second-oldest professional football club, Stoke City FC. Founded in 1863, it enjoyed its heyday in the mid-1970s, when the club came close to winning the top division. The playing style was described by its manager, Tony Waddington, as “the working man’s ballet”. These days the flair is often provided by players from far afield. More than half the first-team squad comes from outside Britain, mostly from other parts of Europe. But that is about as far as Europhilia in Stoke goes. In June’s referendum on Britain’s European Union membership, the city voted strongly for Brexit.

Until quite recently the academic literature treated migrants as substitutes for native workers. But what if they were complements; if low-skilled migrants helped to boost the productivity of low-skilled natives? Gianmarco Ottaviano, of the University of Bologna, and Giovanni Peri, of the University of California, Davis, find that for workers with at least a high-school qualification, the wage effects of low-skill immigration are positive if you drop the assumption that workers of the same age and education are perfect substitutes and that workers of one skill level, say cooks, do not affect the productivity of workers at other skill levels, say waiters or restaurant managers.

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