1 Ayer Rajah Avenue
Institutional Affiliation: INSEAD
NBER Working Papers and Publications
|April 2017||Tradability and the Labor-Market Impact of Immigration: Theory and Evidence from the U.S.|
with Ariel Burstein, Gordon Hanson, Jonathan Vogel: w23330
In this paper, we show that labor-market adjustment to immigration differs across tradable and nontradable occupations. Theoretically, we derive a simple condition under which the arrival of foreign-born labor crowds native-born workers out of (or into) immigrant-intensive jobs, thus lowering (or raising) relative wages in these occupations, and explain why this process differs within tradable versus within nontradable activities. Using data for U.S. commuting zones over the period 1980 to 2012, we find that consistent with our theory a local influx of immigrants crowds out employment of native-born workers in more relative to less immigrant-intensive nontradable jobs, but has no such effect within tradable occupations. Further analysis of occupation labor payments is consistent with adjus...