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Immigrants and Natives in General Equilibrium Trade Models

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Author Info
Daniel Trefler

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Abstract

This paper makes three observations about international trade and immigration. (i)" Borjas has argued that immigration may yield a net social benefit even though it hurts those less-skilled workers who directly compete with immigrants. I show that this closed-economy" argument unravels when imbedded in the Ricardian or Heckscher-Ohlin models of international" trade. (ii) Following Wood and Feenstra-Hanson, I argue that within an industry those goods" produced abroad use more unskilled labor than those goods produced in the United States. How" much more depends on whether the good is produced in a developed or developing country. " After transparently incorporating this into a new factor content study I find that changes in U.S." trade patterns almost certainly battered wages of those at the very bottom of the skill ladder. (iii)" Despite globalization pressures, I find little evidence of earnings convergence for a sample of 75" countries over the 1963-92 period. This holds true even after controlling for education and workers' industry of affiliation.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6209.

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Date of creation: Oct 1997
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Handle: RePEc:nbr:nberwo:6209

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F1 - International Economics - - Trade
F2 - International Economics - - International Factor Movements and International Business

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-87, December. [Downloadable!] (restricted)
  2. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-68, November. [Downloadable!] (restricted)
  3. Mayer, Wolfgang, 1974. "Short-Run and Long-Run Equilibrium for a Small Open Economy," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 955-67, Sept./Oct. [Downloadable!] (restricted)
  4. George J. Borjas & Valerie A. Ramey, 1993. "Foreign Competition, Market Power and Wage Inequality: Theory and Evidence," NBER Working Papers 4556, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Razin, A. & Sadka, E., 1992. "International Migration and International Trade," Papers 11-92, Tel Aviv - the Sackler Institute of Economic Studies.
    Other versions:
  6. Goldin, Claudia & Katz, Lawrence F, 1996. "Technology, Skill, and the Wage Structure: Insights from the Past," American Economic Review, American Economic Association, vol. 86(2), pages 252-57, May. [Downloadable!] (restricted)
  7. Daniel Trefler & Susan Chun Zhu, 2005. "The Structure of Factor Content Predictions," NBER Working Papers 11221, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec.. [Downloadable!] (restricted)
  9. Robert C. Feenstra & Gordon H. Hanson, 1996. "Globalization, Outsourcing, and Wage Inequality," NBER Working Papers 5424, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Murphy, Kevin M & Welch, Finis, 1993. "Inequality and Relative Wages," American Economic Review, American Economic Association, vol. 83(2), pages 104-09, May. [Downloadable!] (restricted)
  11. James A. Brander & Barbara J. Spencer, 1981. "Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry," Canadian Journal of Economics, Canadian Economics Association, vol. 14(3), pages 371-89, August. [Downloadable!] (restricted)
    Other versions:
  12. Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994-1), pages 1-84. [Downloadable!]
  13. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-39, December. [Downloadable!] (restricted)
    Other versions:
  15. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February. [Downloadable!] (restricted)
  16. Robert J. Barro & Jong-Wha Lee, 1993. "International Comparisons of Educational Attainment," NBER Working Papers 4349, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  17. Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May. [Downloadable!] (restricted)
  18. Borjas, George J, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring. [Downloadable!] (restricted)
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  19. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992. "On the Labor Market Effects of Immigration and Trade," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 213-244 National Bureau of Economic Research, Inc. [Downloadable!]
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  20. Helpman, Elhanan, 1984. "Increasing returns, imperfect markets, and trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 7, pages 325-365 Elsevier. [Downloadable!] (restricted)
  21. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December. [Downloadable!] (restricted)
  22. Leamer, Edward E, 1993. "Factor-Supply Differences as a," American Economic Review, American Economic Association, vol. 83(2), pages 436-39, May. [Downloadable!] (restricted)
  23. Edward E. Leamer, 1992. "Wage Effects of A U.S. - Mexican Free Trade Agreement," NBER Working Papers 3991, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  24. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
  25. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  26. Revenga, Ana L, 1992. "Exporting Jobs? The Impact of Import Competition on Employment and Wages in U.S. Manufacturing," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 255-84, February. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Herbert Brücker, 2003. "Die Arbeitsmarkteffekte der Ost-West-Migration: theoretische Überlegungen, Simulationen und empirische Befunde," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(4), pages 579-593.
  2. Istvan Konya, 2001. "Optimal Immigration, Assimilation and Trade," Boston College Working Papers in Economics 507, Boston College Department of Economics. [Downloadable!]
  3. Tito Boeri & Herbert Brücker, 2005. "Migration, Co-ordination Failures and EU Enlargement: Paper Presented at the 41st Economic Policy Panel in Luxembourg, 15/16 April 2005," Discussion Papers of DIW Berlin 481, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  4. Anna Maria Mayda, 2004. "Who is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," Development Working Papers 187, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
    Other versions:
  5. Mayda, Anna Maria, 2007. "Why Are People More Pro-trade Than Pro-migration?," CEPR Discussion Papers 6351, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Tito Boeri & Herbert Brücker, 2005. "Migration, Co-ordination Failures and EU Enlargement," IZA Discussion Papers 1600, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Anna Maria Mayda, 2005. "International Migration: A Panel Data Analysis of Economic and Non-Economic Determinants," IZA Discussion Papers 1590, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Francesco Magris & Giuseppe Russo, 2005. "Selective immigration policies, human capital accumulation and migration duration in infinite horizon," PSE Working Papers 2005-26, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
  9. Harry P. Bowen & Jennifer Pedussel wu, 2004. "Does IT matter where immigrants work? Traded goods, non-traded goods, and sector specific employment," Vlerick Leuven Gent Management School Working Paper Series 2004-14, Vlerick Leuven Gent Management School. [Downloadable!]
  10. Wang-Sheng Lee, 2007. "Immigration and Wages: An Open Economy Model," Melbourne Institute Working Paper Series wp2007n07, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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