Task Specialization, Immigration, and Wages

Innovation and Economic Growth

Article Snapshot

Author(s)

Giovanni Peri and Chad Sparber

Source

American Economic Journal: Applied Economics, Vol. 1:3, pp. 135-169, 2009

Summary

Analyzes the effect of immigrants in promoting efficient job-specialization among less educated workers.

Policy Relevance

Allowing less-educated immigrants in the country for employment reasons will fill the demand for manual jobs for which native supply is low. This may generate upgrading of native jobs, larger demand for their skills and positive wage effects.

Main Points

  • If less educated foreign and native-born workers specialize in different production tasks, because of different abilities, immigration will cause natives to reallocate their task supply, thereby reducing downward wage pressure.
     
  • U.S. Census 1960-2000 data demonstrates that less-educated foreign-born workers specialize in occupations intensive in manual/physical labor skills, while natives pursue jobs more intensive in communication/language tasks. This mechanism can explain why economic analyses commonly find only very small wage consequences of immigration for less educated native-born workers.
     
  • The “upgrading” of natives towards more communication-intensive tasks as a consequence of immigration enhances overall workforce productivity.

 

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