The Effect of Intra African Immigration on Productivity in Africa
African Economic Research Consortium
Contrary to popular belief, many Africans who migrate stays in Africa. In a context of low trade openness between African countries and high differences in the prices of goods and factors, intra-African immigration could theoretically play an important role. This paper aims to study the impact of intra-African immigration on labour productivity in Africa, as well as its macroeconomic and sectoral components. Empirically, I rely on a panel of 187 countries, including 53 African countries, over the period 1990‒2019, and a gravity-based 2SLS approach to deal with endogeneity. The results show that intra-African immigration has a positive, significant, and robust impact on labour productivity in Africa. This impact is greater than the effect of immigration in a global sample, and essentially passes through the improvement in total factor productivity and capital efficiency. While immigration tends to deteriorate capital productivity in the world sample, intra-African immigration improves capital productivity in Africa. Furthermore, the results reveal that the service sector is the one that benefits from the positive effect of intra-African immigration in Africa.