The productivity impact of short-term labor mobility across industries

Abstract

The restrictions on labor mobility imposed in the COVID-19 pandemic heighten the need to review in detail the role of mobility in improving productivity and fostering economic growth. In this study, we carry out a comprehensive analysis of business visits (BVs) understood as a productivity-enhancing intrapreneurial strategy, using the most extensive set of data available, covering 33 sectors and 14 countries during the period 1998–2013. Our database merges unique information on expenditures on BVs by sector, country, and year, sourced from the US National Business Travel Association, with OECD and World Bank productivity data. We find that BVs raise labor productivity in a significant way, but short-term labor mobility exhibits decreasing returns, being more crucial in those firms, sectors, and countries characterized by less mobility and by lower productivity performances.