Computerization and Immigration: Theory and Evidence from the United States
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.
We want to thank Matteo Bugamelli, Francesca Carta, Federico Cingano, Francesco D'Amuri, Andrea Linarello, Francesca Mazzolari, Chad Sparber, Shyam Gouri Suresh, Eliana Viviano and numerous participants at seminars at the Bank of Italy, CIRET-Università La Sapienza (Roma), ZEW (Mannheim), Lehigh University, Barnard College, the AIEL 2017 Conference, the Macroeconomics for Liberal Arts Colleges workshop at Davidson College, and the Society for Labor Economists meetings in Toronto, for their insightful comments. The views expressed in the paper are those of the authors only and do not reflect the opinion of the Bank of Italy nor those of the National Bureau of Economic Research. We did not receive any funding for this project.
Gaetano Basso & Giovanni Peri & Ahmed S. Rahman, 2020. "Computerization and immigration: Theory and evidence from the United States," Canadian Journal of Economics/Revue canadienne d'économique, vol 53(4), pages 1457-1494. citation courtesy of