Immigration, offshoring and American jobs

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Author: Ottaviano, Gianmarco I. P.; Peri, Giovanni; Wright, Greg C.

Abstract:

How do offshoring and immigration affect the employment of native workers? What kinds of jobs suffer, or benefit, most from the competition created by offshore and immigrant workers? In contrast to the existing literature that has mostly looked at the effects of offshoring and immigration separately, we argue that one can gain useful insights by jointly investigating the interactions among native, immigrant and offshore workers. We develop our argument in three steps. First, we present some new facts on 58 US manufacturing industries from 2000 to 2007. Second, we build on Grossman and Rossi-Hansberg (2008) to design a model of task assignment among heterogeneous native, immigrant and offshore workers that fits those facts. Third, we use the model to draw systematic predictions about the effects of immigration and offshoring on native workers and we test these predictions on the data. We find that, within the manufacturing sector, immigrants do not compete much with natives, as these two groups of workers are relatively specialized in tasks at opposite ends of the skill intensity spectrum. Offshore workers, on the other hand, seem to be specialized in tasks of intermediate skill intensity. We also find that offshoring has no effect on native employment in the aggregate, while the effect of immigration on native employment is positive. This hints at the presence of a ‘productivity effect’ whereby offshoring and immigration improve industry efficiency, thereby creating new jobs.

Published abstract reprinted by permission of the copyright owner.

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How do offshoring and immigration affect the employment of native workers? What kinds of jobs suffer, or benefit, most from the competition created by offshore and immigrant workers? In contrast to the existing literature that has mostly looked at the effects of offshoring and immigration separately, we argue that one can gain useful insights by jointly investigating the interactions among native, immigrant and offshore workers. We develop our argument in three steps. First, we present some new facts on 58 US manufacturing industries from 2000 to 2007. Second, we build on Grossman and ...  [+] Show more

Subjects: Migration; Employment; Skills and knowledge; Outcomes; Research

Keywords: Immigration; Employment pattern; Employment status; Skilled worker; Skilled migration; Comparative analysis; Work organisation; Job skill; Labour utilisation

Geographic subjects: United States; North America

Published: London, England: Centre for Economic Performance, London School of Economics, 2012

Physical description: 57 p.

Access item:
http://cep.lse.ac.uk/_new/publications/abstract.asp?index=4065

Series:
Discussion paper (London School of Economics and Political Science. Centre for Economic Performance); no. 1147

ISSN: 2042-2695

Resource type: Discussion paper

Call Number:
TD/TNC 108.1222



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