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Offshoring, Immigration, and the Native Wage Distribution

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Abstract

This paper presents a simple model that examines the impact of offshoring and immigration on wages and tests these predictions using U.S. state-industry-year panel data. According to the model, the productivity effect causes offshoring to have a more positive impact on low-skilled wages than immigration, but this gap decreases with the workers' skill level. The empirical results confirm both of these predictions and thus present direct evidence of the productivity effect. Furthermore, the results provide important insight into how specific components of offshoring and immigration affect the wages of particular types of native workers.

Suggested Citation

  • William W. Olney, 2008. "Offshoring, Immigration, and the Native Wage Distribution," Department of Economics Working Papers 2010-10, Department of Economics, Williams College, revised Apr 2012.
  • Handle: RePEc:wil:wileco:2010-10
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    File URL: http://web.williams.edu/Economics/wp/OlneyOffshoringImmigratioAndWages.pdf
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    References listed on IDEAS

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    1. JunJie Wu, 2000. "Slippage Effects of the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 979-992.
    2. Joseph C. Cooper & C. Tim Osborn, 1998. "The Effect of Rental Rates on the Extension of Conservation Reserve Program Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 184-194.
    3. Michael J. Roberts & Ruben N. Lubowski, 2007. "Enduring Impacts of Land Retirement Policies: Evidence from the Conservation Reserve Program," Land Economics, University of Wisconsin Press, vol. 83(4), pages 516-538.
    4. Silvia Secchi & Bruce A. Babcock, 2007. "Impact of High Crop Prices on Environmental Quality: A Case of Iowa and the Conservation Reserve Program," Center for Agricultural and Rural Development (CARD) Publications 07-wp447, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    Cited by:

    1. Gianmarco I. P. Ottaviano & Giovanni Peri & Greg C. Wright, 2016. "Immigration, Offshoring, and American Jobs," World Scientific Book Chapters,in: The Economics of International Migration, chapter 4, pages 117-151 World Scientific Publishing Co. Pte. Ltd..
    2. Vallizadeh E. & Muysken J. & Ziesemer T.H.W., 2015. "Offshoring of medium-skill jobs, polarization, and productivity effect: Implications for wages and low-skill unemployment," MERIT Working Papers 004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2016. "Offshoring medium-skill tasks, low-skill unemployment and the skill-wage structure," MERIT Working Papers 070, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Nicholas Sly & Lindsay Oldenski & Brian Kovak, 2017. "The Labor Market Effects of Offshoring by U.S. Multinational Firms: Evidence from Changes in Global Tax Policies," 2017 Meeting Papers 535, Society for Economic Dynamics.
    5. Peter J. Montiel & Luis Servén, 2008. "Real Exchange Rates, Saving and Growth: Is there a Link?," Department of Economics Working Papers 2010-18, Department of Economics, Williams College.

    More about this item

    Keywords

    Offshoring; Outsourcing; Immigration; Productivity effect; Wages;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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