In nearly every country that hosts foreign-born citizens, immigration emerges as a lightning rod for controversy. The economic realities of immigration, however, are far more complex than the negative sound bites suggest. Far from being a burden, as critics claim , immigrants play pivotal roles in driving innovation, enhancing productivity and fostering economic growth in their adopted countries.
They also elevate their adopted and origin countries’ standings in global value chains, contributing to economic resilience. We are economists who study global trade and migration, and our recent work reveals that immigrants contribute far more to the economic fabric of nations than previously understood. By facilitating what’s known as “trade in value added,” or TiVA, immigrants play a crucial role in helping countries specialize their production, move up the value chain and significantly enhance trade sophistication.
Moving up the value chain means progressing from producing basic, low-value goods to more complex, higher-value products. This shift involves improving skills, technology and production techniques, allowing a country to capture more economic value and develop advanced industries. So, what exactly is trade in value added, and why is it important? In today’s global economy, products are rarely made entirely in one country.
Instead, different stages of production occur across multiple nations. TiVA measures each country’s contribution to a final product, provi.
