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Immigration, Offshoring and American Jobs

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  • Ottaviano, Gianmarco Ireo Paolo
  • Peri, Giovanni
  • Wright, Greg C.

Abstract

How many "American jobs" have U.S.-born workers lost due to immigration and offshoring? Or, alternatively, is it possible that immigration and offshoring, by promoting cost-savings and enhanced efficiency in firms, have spurred the creation of jobs for U.S. natives? We consider a multi-sector version of the Grossman and Rossi-Hansberg (2008) model with a continuum of tasks in each sector and we augment it to include immigrants with heterogeneous productivity in tasks. We use this model to jointly analyze the impact of a reduction in the costs of offshoring and of the costs of immigrating to the U.S. The model predicts that while cheaper offshoring reduces the share of natives among less skilled workers, cheaper immigration does not, but rather reduces the share of offshored jobs instead. Moreover, since both phenomena have a positive "cost-savings" effect they may leave unaffected, or even increase, total native employment of less skilled workers. Our model also predicts that offshoring will push natives toward jobs that are more intensive in communication-interactive skills and away from those that are manual and routine intensive. We test the predictions of the model on data for 58 U.S. manufacturing industries over the period 2000-2007 and find evidence in favor of a positive productivity effect such that immigration has a positive net effect on native employment while offshoring has no effect on it. We also find some evidence that offshoring has pushed natives toward more communication-intensive tasks while it has pushed immigrants away from them.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8078.

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Date of creation: Oct 2010
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Handle: RePEc:cpr:ceprdp:8078

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Keywords: employment; immigrants; offshoring; production tasks;

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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. How Immigration Reduces Offshoring
    by Ariel Goldring in Free Market Mojo on 2010-11-06 12:00:47
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Michael J. Boehm, 2013. "Has job polarization squeezed the middle class? Evidence from the allocation of talents," LSE Research Online Documents on Economics 51554, London School of Economics and Political Science, LSE Library.
  2. Nikolaj Malchow-Møller & Jakob Roland Munch & Claus Aastrup Seidelin & Jan Rose Skaksen, 2013. "Immigrant Workers and Farm Performance: Evidence from Matched Employer-Employee Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(4), pages 819-841.
  3. Cosimo BEVERELLI & Gianluca OREFICE & Nadia ROCHA, 2011. "Offshoring and migration in a world with policy spillovers," Departmental Working Papers 2011-25, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  4. Mitaritonna, Cristina & Orefice, Gianluca & Peri, Giovanni, 2014. "Immigrants and Firms' Productivity: Evidence from France," IZA Discussion Papers 8063, Institute for the Study of Labor (IZA).
  5. Geishecker, Ingo & Riedl, Maximilian & Frijters, Paul, 2012. "Offshoring and job loss fears: An econometric analysis of individual perceptions," Labour Economics, Elsevier, vol. 19(5), pages 738-747.
  6. Ejaz Ghani & William R. Kerr & Christopher T. Stanton, 2012. "Diasporas and Outsourcing: Evidence from oDesk and India," NBER Working Papers 18474, National Bureau of Economic Research, Inc.
  7. Wright, Greg C., 2014. "Revisiting the employment impact of offshoring," European Economic Review, Elsevier, vol. 66(C), pages 63-83.
  8. Michael J. Boehm, 2013. "Has Job Polarization Squeezed the Middle Class? Evidence from the Allocation of Talents," CEP Discussion Papers dp1215, Centre for Economic Performance, LSE.
  9. Benedikt Heid & Mario Larch, 2011. "Migration, Trade and Unemployment," Ifo Working Paper Series Ifo Working Paper No. 115, Ifo Institute for Economic Research at the University of Munich.
  10. David Hummels & Rasmus Jørgensen & Jakob R. Munch & Chong Xiang, 2011. "The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data," NBER Working Papers 17496, National Bureau of Economic Research, Inc.
  11. Colantone, Italo & Crinò, Rosario, 2014. "New imported inputs, new domestic products," Journal of International Economics, Elsevier, vol. 92(1), pages 147-165.
  12. Gianmarco Ottaviano & Giovanni Peri, 2013. "New Frontiers Of Immigration Research: Cities And Firms," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 1-7, 02.
  13. Hugo Rojas-Romagosa, 2011. "Wage inequality in trade-in-tasks models," CPB Discussion Paper 196, CPB Netherlands Bureau for Economic Policy Analysis.
  14. E. Podrecca & G. Rossini, 2012. "Wages and international factors’ mobility," Working Papers wp826, Dipartimento Scienze Economiche, Universita' di Bologna.

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