Productivity and Knowledge Transfer: Evidence from Prisoner Employment

Speaker: Dr Claudio Labanca

Affiliation: Monash University

Location: Level 6 Boardroom (629), Colin Clark Building (#39), St Lucia Campus

Zoom: https://uqz.zoom.us/j/82603079317

Abstract: Worker mobility can facilitate the transmission of knowledge and ultimately increase productivity. Yet isolating such productivity effects is challenging because of worker sorting, labor market adjustments, and assimilation processes. We exploit quasi-experimental variation arising from the temporary employment of Italian prisoners of war in agricultural production in Australia during World War II to isolate the effects of worker mobility on productivity. We find that this inflow of workers increased agricultural output in the short run and generated productivity gains that persisted after the workers’ departure. Examining mechanisms, we show that the employment of foreign workers led to greater mechanization and to a shift toward crops better suited to local conditions in areas that received workers from Italian provinces where such technologies and crops were more common. Our findings point to the transfer of origin-specific know-how as a key channel through which worker mobility generates lasting productivity gains in the host economy.