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Computerization and immigration: Theory and evidence from the United States

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  • Gaetano Basso
  • Giovanni Peri
  • Ahmed S. Rahman

Abstract

Recent technological changes have been characterized as “routine‐substituting” because they reduce demand for routine tasks and increase demand for analytical and service tasks. Little is known about how these changes have impacted immigration, or task specialization between immigrants and native‐born individuals. In this paper, we show that such technological progress has attracted immigrants who increasingly specialize in manual‐service occupations. We also suggest that openness to immigration attenuated the job and wage polarization faced by native‐born from technological changes. We explain these facts with a model of technological progress and endogenous immigration. Simulations show that unskilled immigration attenuates the drop in routine employment proceeding from technological change, enhances skill upgrading for native‐born and raises economy‐wide productivity and welfare. Informatisation et immigration aux États‐Unis : théorie et observations. Les mutations technologiques récentes se caractérisent par un remplacement des emplois les plus répétitifs. En effet, tandis que la demande en matière de tâches routinières diminue, celle ayant trait aux services et aux travaux analytiques augmente. On sait peu de choses sur la façon dont ces transformations ont une incidence sur l’immigration ou sur la spécialisation des tâches entre immigrants et populations locales. Dans cet article, nous montrons qu’un tel progrès technologique attire des immigrants de plus en plus spécialisés dans les services manuels. Nous montrons également que l’ouverture à l’immigration a permis d’atténuer la polarisation en matière d’emploi et de salaire que les populations locales subissent face à de tels changements. Nous expliquons ces phénomènes grâce à un modèle mêlant progrès technologique et immigration endogène. Les simulations montrent que l’immigration non qualifiée atténue la baisse en matière d’emploi répétitif engendrée par le progrès technologique, améliore le perfectionnement des compétences des locaux et augmente la productivité de tous les secteurs économiques ainsi que le bien‐être.

Suggested Citation

  • Gaetano Basso & Giovanni Peri & Ahmed S. Rahman, 2020. "Computerization and immigration: Theory and evidence from the United States," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1457-1494, November.
  • Handle: RePEc:wly:canjec:v:53:y:2020:i:4:p:1457-1494
    DOI: 10.1111/caje.12472
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    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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