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Immigration, Offshoring, and American Jobs

In: The Economics of International Migration

Listed author(s):
  • GIANMARCO I. P. OTTAVIANO
  • GIOVANNI PERI
  • GREG C. WRIGHT

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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This chapter was published in:
  • Giovanni Peri, 2016. "The Economics of International Migration," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 9781, March.
  • This item is provided by World Scientific Publishing Co. Pte. Ltd. in its series World Scientific Book Chapters with number 9789814719902_0004.
    Handle: RePEc:wsi:wschap:9789814719902_0004
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