Event Detail

Soviet Industrialization and American Skilled Labor: Transfer of Technologies and Productivity

Presented by:
Andrei Markevich
University of Helsinki

Friday, September 13, 2024
12:00 pm-1:15 pm
Taylor-Hibbard Seminar Room (Rm103)

While recent work demonstrates that high-skilled immigrants can promote knowledge and technology transfer little is known about the factors that foster successful transfers of technologies. We address this question in the context of Soviet Industrialization during the interwar period. In the early 1930s, the government of Soviet Karelia, a border region to Finland, initiated a recruitment policy of high-skilled foreign labor targeting American workers with Finnish background. Eight thousand American Finns, recruited mostly from the timber industry migrated to the Soviet Union. We link novel individual-level data on settlement and employment of these immigrants with firm-level panel data on the output and inputs of plants in (exposed) Soviet Karelia and the adjacent North (control) region to explore the effect of American skilled labor on Soviet Industrialization. We leverage our two-way fixed effects design with geographical settlement restrictions imposed by the Soviet secret police as a source of exogenous variation of location of settlement. We find that Soviet wood and pulp firms in the settlements receiving American Finns doubled TFP after their arrival. Given the small number of American Finns in an average firm and the magnitude of effect we find, the successful transfer of technologies is the likely explanation. The effect is more pronounced in the areas with higher pre-treatment literacy rates and higher pre-treatment shares of Soviet Finns among the local population, implying that the education and language skills of the receivers are crucial for the adaptation of technologies brought by immigrants.