Skill, Innovation and Wage Inequality: Can Immigrants be the Trump Card?
Gouranga Das and
No 7082, CESifo Working Paper Series from CESifo Group Munich
With the ensuing immigration reform in the US, the paper shows that targeted skilled immigration into the R&D sector that helps low-skilled labor is conducive for controlling inequality and raising wage. Skilled talent-led innovation could have spillover benefits for the unskilled sector while immigration into the production sector will always reduce wage, aggravating wage inequality. In essence, we infer: (i) if R&D inputs contributes only to skilled sector, wage inequality increases in general; (ii) for wage gap to decrease, R&D sector must produce inputs that goes into unskilled manufacturing sector; (iii) even with two types of specific R&D inputs entering into the skilled and unskilled sectors separately, unskilled labor is not always benefited by high skilled migrants into R&D-sector. Rather, it depends on the importance of migrants’ skill in R&D activities and intensity of inputs. Inclusive immigration policy requires inter-sectoral diffusion of ideas embedded in talented immigrants targeted for innovation.
Keywords: HIB; immigration; innovation; wage gap; skill; R&D; policy; RAISE Act (search for similar items in EconPapers)
JEL-codes: F22 J31 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino, nep-int, nep-lma, nep-mig and nep-ure
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Working Paper: Skill, innovation and wage inequality: Can immigrants be the trump card? (2018)
Working Paper: Skill, Innovation and Wage Inequality: Can Immigrants be the Trump Card? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7082
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