Full Citation
Title: Immigration, Occupations, and Local Labor Markets: Theory and Evidence from the U.S.
Citation Type: Miscellaneous
Publication Year: 2016
ISBN:
ISSN:
DOI:
NSFID:
PMCID:
PMID:
Abstract: In this paper, we show that labor-market adjustment to immigration differs across tradable and nontradable occupations. Theoretically, we derive a simple condition under which the arrival of foreign-born labor crowds native-born workers out of (or into) immigrant-intensive jobs, thus lowering (or raising) relative wages in these occupations, and explain why this process differs within tradable versus within nontradable activities. Using data for U.S. commuting zones over the period 1980 to 2012, we find that consistent with our theory a local influx of immigrants crowds out employment of native-born workers in more relative to less immigrant-intensive nontradable jobs, but has no such effect within tradable occupations. Further analysis of occupation wage bills is consistent with adjustment to immigration within tradables occurring more through changes in output (versus changes in prices) when compared to adjustment within nontradables, thus confirming the theoretical mechanism behind differential crowding out between the two sets of jobs. We then build on these insights to construct a quantitative framework to evaluate the consequences of counterfactual changes in U.S. immigration. Reducing inflows from Latin America, which tends to send low-skilled immigrants to specific U.S. regions, raises local wages for native-born workers in more relative to less-exposed nontradable occupations by much more than for similarly differentially exposed tradable jobs. By contrast, increasing the inflow of high-skilled immigrants, who are not . . .
Url: https://economicdynamics.org/meetpapers/2017/paper_79.pdf
User Submitted?: No
Authors: Burstein, Ariel; Hanson, Gordon; Tian, Lin; Vogel, Jonathan
Publisher: UCLA
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Migration and Immigration, Other
Countries: