Task Specialization, Comparative Advantages, and the Effects of Immigration on Wages

Giovanni Peri and Chad Sparber

No 13389, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many workers with low levels of educational attainment immigrated to the United States in recent decades. Large inflows of less-educated immigrants would reduce wages paid to comparably-educated native-born workers if the two groups compete for similar jobs. In a simple model exploiting comparative advantage, however, we show that if less-educated foreign and native-born workers specialize in performing complementary tasks, immigration will cause natives to reallocate their task supply, thereby reducing downward wage pressure. Using individual data on the task intensity of occupations across US states from 1960-2000, we then demonstrate that foreign-born workers specialize in occupations that require manual tasks such as cleaning, cooking, and building. Immigration causes natives -- who have a better understanding of local networks, rules, customs, and language -- to pursue jobs requiring interactive tasks such as coordinating, organizing, and communicating. Simulations show that this increased specialization mitigated negative wage consequences of immigration for less-educated native-born workers, especially in states with large immigration flows.

JEL-codes: F22 J31 J61 R13 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-lab and nep-mig
Note: ITI LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published as Giovanni Peri & Chad Sparber, 2009. "Task Specialization, Immigration, and Wages," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 135-69, July.

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