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Offshoring, Immigration, and the Native Wage Distribution

While workers in developed countries have become increasingly concerned about the impact that offshoring and immigration have on their wages, the available evidence remains mixed. This paper presents a simple model that examines the impact 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 o€shoring and immigration affect the wages of particular types of native workers.

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File URL: http://web.williams.edu/Economics/wp/OlneyOffshoringImmigratioAndWages.pdf
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Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2010-10.

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Length: 46 pages
Date of creation: Jul 2008
Date of revision: Feb 2011
Publication status: Forthcoming in Canadian Journal of Economics
Handle: RePEc:wil:wileco:2010-10
Contact details of provider: Postal: Williamstown, MA 01267
Phone: 413 597 2476
Fax: 413 597 4045
Web page: http://econ.williams.edu
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  1. 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.
  2. Cooper, Joseph C. & Osborn, Tim, 1998. "The effect of rental rates on the extension of Conservation Reserve Program contracts," MPRA Paper 24781, University Library of Munich, Germany.
  3. 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.
  4. 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.
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