Immigration, Endogenous Technology Adoption and Wages

A. Ray Chaudhuri, Manish Pandey

    Research output: Working paperDiscussion paperOther research output

    337 Downloads (Pure)

    Abstract

    We document that immigration to U.S. states has increased the mass of workers at the lower range of the skill distribution. We use this change in skill distribution of workers to analyze the effect of immigration on wages. Our model allows firms to endogenously respond to the immigration-induced changes in skill distribution in terms of their decisions (i) to enter different industries which require the use of different technologies; (ii) to choose across
    technologies that differ in their skill-intensity; and (iii) to employ workers of different skill levels. Allowing these mechanisms to interact, we find that, in line with much of the related empirical literature, immigration has a small effect on average real wages of low skilled workers for U.S. states. We further show that immigration increases the wage inequality between workers of different skill levels in all states, and that the effect of immigration on wages and wage inequality varies systematically with the volume of immigration across states.
    Original languageEnglish
    Place of PublicationTilburg
    PublisherDepartment of Economics
    Number of pages59
    Volume2015-008
    Publication statusPublished - 27 Jan 2015

    Publication series

    NameCentER Discussion Paper
    Volume2015-008

    Fingerprint

    Wages
    Technology adoption
    Immigration
    Workers
    U.S. States
    Wage inequality
    Industry
    Real wages
    Skilled workers

    Keywords

    • Immigration
    • technology adaptation
    • wages

    Cite this

    Ray Chaudhuri, A., & Pandey, M. (2015). Immigration, Endogenous Technology Adoption and Wages. (CentER Discussion Paper; Vol. 2015-008). Tilburg: Department of Economics.
    Ray Chaudhuri, A. ; Pandey, Manish. / Immigration, Endogenous Technology Adoption and Wages. Tilburg : Department of Economics, 2015. (CentER Discussion Paper).
    @techreport{d785f42dcd6147449ec7907df4a32886,
    title = "Immigration, Endogenous Technology Adoption and Wages",
    abstract = "We document that immigration to U.S. states has increased the mass of workers at the lower range of the skill distribution. We use this change in skill distribution of workers to analyze the effect of immigration on wages. Our model allows firms to endogenously respond to the immigration-induced changes in skill distribution in terms of their decisions (i) to enter different industries which require the use of different technologies; (ii) to choose acrosstechnologies that differ in their skill-intensity; and (iii) to employ workers of different skill levels. Allowing these mechanisms to interact, we find that, in line with much of the related empirical literature, immigration has a small effect on average real wages of low skilled workers for U.S. states. We further show that immigration increases the wage inequality between workers of different skill levels in all states, and that the effect of immigration on wages and wage inequality varies systematically with the volume of immigration across states.",
    keywords = "Immigration, technology adaptation, wages",
    author = "{Ray Chaudhuri}, A. and Manish Pandey",
    year = "2015",
    month = "1",
    day = "27",
    language = "English",
    volume = "2015-008",
    series = "CentER Discussion Paper",
    publisher = "Department of Economics",
    type = "WorkingPaper",
    institution = "Department of Economics",

    }

    Ray Chaudhuri, A & Pandey, M 2015 'Immigration, Endogenous Technology Adoption and Wages' CentER Discussion Paper, vol. 2015-008, Department of Economics, Tilburg.

    Immigration, Endogenous Technology Adoption and Wages. / Ray Chaudhuri, A.; Pandey, Manish.

    Tilburg : Department of Economics, 2015. (CentER Discussion Paper; Vol. 2015-008).

    Research output: Working paperDiscussion paperOther research output

    TY - UNPB

    T1 - Immigration, Endogenous Technology Adoption and Wages

    AU - Ray Chaudhuri, A.

    AU - Pandey, Manish

    PY - 2015/1/27

    Y1 - 2015/1/27

    N2 - We document that immigration to U.S. states has increased the mass of workers at the lower range of the skill distribution. We use this change in skill distribution of workers to analyze the effect of immigration on wages. Our model allows firms to endogenously respond to the immigration-induced changes in skill distribution in terms of their decisions (i) to enter different industries which require the use of different technologies; (ii) to choose acrosstechnologies that differ in their skill-intensity; and (iii) to employ workers of different skill levels. Allowing these mechanisms to interact, we find that, in line with much of the related empirical literature, immigration has a small effect on average real wages of low skilled workers for U.S. states. We further show that immigration increases the wage inequality between workers of different skill levels in all states, and that the effect of immigration on wages and wage inequality varies systematically with the volume of immigration across states.

    AB - We document that immigration to U.S. states has increased the mass of workers at the lower range of the skill distribution. We use this change in skill distribution of workers to analyze the effect of immigration on wages. Our model allows firms to endogenously respond to the immigration-induced changes in skill distribution in terms of their decisions (i) to enter different industries which require the use of different technologies; (ii) to choose acrosstechnologies that differ in their skill-intensity; and (iii) to employ workers of different skill levels. Allowing these mechanisms to interact, we find that, in line with much of the related empirical literature, immigration has a small effect on average real wages of low skilled workers for U.S. states. We further show that immigration increases the wage inequality between workers of different skill levels in all states, and that the effect of immigration on wages and wage inequality varies systematically with the volume of immigration across states.

    KW - Immigration

    KW - technology adaptation

    KW - wages

    M3 - Discussion paper

    VL - 2015-008

    T3 - CentER Discussion Paper

    BT - Immigration, Endogenous Technology Adoption and Wages

    PB - Department of Economics

    CY - Tilburg

    ER -

    Ray Chaudhuri A, Pandey M. Immigration, Endogenous Technology Adoption and Wages. Tilburg: Department of Economics. 2015 Jan 27. (CentER Discussion Paper).