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Immigration, Offshoring, and American Jobs

In: Firms and Workers in a Globalized World Larger Markets, Tougher Competition

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  • GIANMARCO I. P. OTTAVIANO
  • GIOVANNI PERI
  • GREG C. WRIGHT

Abstract

The relocation of jobs abroad by multinationals and the increased labor market competition due to immigrant workers are often credited with the demise of many manufacturing jobs once held by American citizens. While it is certainly true that manufacturing production and employment, as a percentage of the total economy, have declined over recent decades in the United States, measuring the impact of those two aspects of globalization on jobs has been difficult. This is due to the possible presence of two opposing effects. On the one hand, there is a direct “displacement effect”: offshoring some production processes or hiring immigrants to perform them directly reduces the demand for native workers. On the other hand, there is an indirect “productivity effect”: the cost savings associated with employing immigrant and offshore labor increases the efficiency of the production process, thus raising the demand for native workers—if not in the same tasks that are offshored or given to immigrant workers, then certainly in tasks that are complementary to them…

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  • Gianmarco I. P. Ottaviano & Giovanni Peri & Greg C. Wright, 2021. "Immigration, Offshoring, and American Jobs," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 10, pages 291-326, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789811233395_0010
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    More about this item

    Keywords

    Allocative Efficiency; Immigration; Inequality; Innovation; International Competition; International Trade; Macroeconomic Effects of Globalization; New Economic Geography; New Trade Theory; Offshoring; Regional Decline; Regional Growth; Territories; Waves of Globalization; Winners and Losers from Globalization; Borders; Creative Destruction; Cultural Diversity; Economic Geography; Economic Growth; Firm Heterogeneity; Firms and Workers; Globalization;
    All these keywords.

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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