Editing Openai/69640cff-e5e0-8003-a8d1-a78b118ca18b (section)

==== If immigration meaningfully raises UK productivity (TFP, within-firm efficiency, agglomeration effects), that can dominate the small wage triangle. ====

The UK evidence is not perfectly settled, but leans toward “not negative on average”:
* Ottaviano, Peri & Wright (NBER, 2015; later published) find that immigrants increase productivity in UK service-producing firms, reduce country-specific offshoring (consistent with task reallocation), and increase exports (lowering bilateral trade costs).
* Nam & Portes (IZA DP, 2023) find (at region-sector level, 2014–2019) evidence of a positive association between the non‑EU share of employment and productivity (with estimates implying “extra” non‑EU workforce shares associated with sizeable productivity differences), while EU shares show weaker/negative but typically insignificant patterns. They emphasize sensitivity to specification and caution about causality.
* Hall & Manning (CEP DP, 2024) estimate production functions for British firms and argue that much of the apparent higher productivity of migrants reflects sorting across areas/industries/firms, with smaller differences once firm fixed effects are used.

How does this relate specifically to “low-skilled” immigration?

There are two competing stories (both plausible; evidence mixed):
# Complementarity/task specialization: low-skilled immigrants allow natives (including less-educated natives) to move toward tasks with higher returns (communication/complex tasks), raising productivity and mitigating wage pressure.
# Capital-deepening / automation incentives: abundant low-skilled labour might reduce incentives to adopt labour-saving technology and training, lowering productivity growth.

The UK literature doesn’t deliver a clean “productivity loss from low-skilled migration” result; if anything, the commissioned and firm-level strands more often find positive or ambiguous effects with substantial uncertainty.