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Task Specialization, Comparative Advantages, and the Effects of Immigration on Wages

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  • Giovanni Peri
  • Chad Sparber

Abstract

Many workers with low levels of educational attainment immigrated to the United States in recent decades. Large inflows of less-educated immigrants would reduce wages paid to comparably-educated native-born workers if the two groups compete for similar jobs. In a simple model exploiting comparative advantage, however, we show that if less-educated foreign and native-born workers specialize in performing complementary tasks, immigration will cause natives to reallocate their task supply, thereby reducing downward wage pressure. Using individual data on the task intensity of occupations across US states from 1960-2000, we then demonstrate that foreign-born workers specialize in occupations that require manual tasks such as cleaning, cooking, and building. Immigration causes natives -- who have a better understanding of local networks, rules, customs, and language -- to pursue jobs requiring interactive tasks such as coordinating, organizing, and communicating. Simulations show that this increased specialization mitigated negative wage consequences of immigration for less-educated native-born workers, especially in states with large immigration flows.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13389.

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Date of creation: Sep 2007
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Publication status: published as Giovanni Peri & Chad Sparber, 2009. "Task Specialization, Immigration, and Wages," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 135-69, July.
Handle: RePEc:nbr:nberwo:13389

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Cited by:
  1. Felicia Ionescu, 2009. "The Federal Student Loan Program: Quantitative Implications for College Enrollment and Default Rates," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 205-231, January.
  2. Francesco D'Amuri & Gianmarco I.P. Ottaviano & Giovanni Peri, 2008. "The Labor Market Impact of Immigration in Western Germany in the 1990's," NBER Working Papers 13851, National Bureau of Economic Research, Inc.
  3. Rienzo, Cinzia, 2008. "Residual Wage Inequality and Immigration in the UK and the US," MPRA Paper 30279, University Library of Munich, Germany, revised Mar 2011.
  4. Ethan G. Lewis, 2011. "Immigrant-Native Substitutability: The Role of Language Ability," NBER Working Papers 17609, National Bureau of Economic Research, Inc.
  5. Ortega, J. & Verdugo, G., 2011. "Immigration and the Occupational Choice of Natives: a Factor Proportions Approach," Working papers 335, Banque de France.
  6. Giulietti, Corrado, 2009. "Immigration and displacement across local labour markets," Discussion Paper Series In Economics And Econometrics 0917, Economics Division, School of Social Sciences, University of Southampton.
  7. Barba Navaretti, Giorgio & Bertola, Giuseppe & Sembenelli, Alessandro, 2008. "Offshoring and Immigrant Employment: Firm-level Theory and Evidence," CEPR Discussion Papers 6743, C.E.P.R. Discussion Papers.
  8. Giovanni Peri & Chad Sparber, 2009. "Task Specialization, Immigration, and Wages," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 135-69, July.
  9. Maude Toussaint-Comeau, 2007. "The impact of Mexican immigrants on U.S. wage structure," Working Paper Series WP-07-24, Federal Reserve Bank of Chicago.
  10. repec:ese:iserwp:2008-17 is not listed on IDEAS

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