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Task Specialization, Immigration, and Wages

  • Giovanni Peri

    ()

    (UC Davis and NBER)

  • Chad Sparber

    ()

    (Colgate University)

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 are perfectly substitutable in production. In a simple model exploiting comparative advantage, however, we show that if less-educated foreign and native-born workers specialize in performing different tasks, immigration will cause natives to reallocate their task supply, thereby reducing downward wage pressure. We merge occupational task-intensity data from the O*NET and DOT datasets with individual Census data across US states from 1960-2000 to demonstrate that foreign-born workers specialize in occupations that require manual and physical labor skills while natives pursue jobs more intensive in communication and language tasks. Immigration induces natives to specialize accordingly. Simulations show that this increased specialization might explain why economic analyses commonly find only modest wage and employment consequences of immigration for less-educated native-born workers across U.S. states. This is especially true in states with large immigration flows.

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Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 0802.

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Date of creation: Mar 2008
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Handle: RePEc:crm:wpaper:0802
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