Working Paper: NBER ID: w23935
Authors: Gaetano Basso; Giovanni Peri; Ahmed Rahman
Abstract: Recent technological changes have been characterized as “routine-substituting,” reducing demand for routine tasks but increasing it for analytical and service tasks. Little is known about how these changes have impacted immigration, or task specialization between immigrants and natives. In this paper we show that such technological progress has been an important determinant of immigration, attracting immigrants who increasingly specialize in manual-service occupations. We also suggest that open- ness to immigration attenuated job and wage polarization for natives resulting from technological changes. We explain these facts with a model of technological progress and endogenous immigration. Simulations show that unskilled immigration attenuates the drop in routine employment proceeding from technological change, enhances skill-upgrading for natives, and raises economy-wide productivity and welfare.
Keywords: computerization; immigration; labor market; job polarization; technological change
JEL Codes: J15; J24; O15; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Without influx of low-skilled immigrants (J69) | more pronounced routine job losses among natives (J63) |
| Technological progress, particularly the adoption of personal computers (O33) | decline in routine-intensive jobs (J29) |
| Technological progress, particularly the adoption of personal computers (O33) | increase in demand for analytical and manual service jobs (J29) |
| Higher computerization (L63) | significant increase in low-skilled immigration (K37) |
| Influx of low-skilled immigrants (F66) | complementary effect on native employment (J68) |
| Presence of immigrants in manual service jobs (J69) | maintain demand for routine positions (J23) |
| Immigrant labor (J82) | stabilizing the labor market (J48) |