Technology, Trade, and Adjustment to Immigration in Israel

Neil Gandal, Gordon Hanson and Matthew J. Slaughter

No 7962, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the early 1990s Israel experienced a large and concentrated surge of immigration from the former Soviet Union. Most Russian immigrants had high education levels relative to the average Israeli. Despite the size and skill mix of the immigration shock, existing research has found little evidence that it put downward pressure on Israeli wages. In this paper we examine two open-economy mechanisms through which Israel may have absorbed changes in labor supplies related to the Russian immigration inflow: the adoption of global changes in production technology, and national changes in the mix of traded goods produced. Our main finding is that global changes in production techniques, which appear consistent with skill-biased technical change, were sufficient to more than offset Israel's change in relative factor supplies due to the Russian influx and other events. We also find that changes in output mix (in either traded or nontraded industries) did not help Israel absorb changes in relative factor supplies.

JEL-codes: F16 F22 (search for similar items in EconPapers)
Date: 2000-10
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published as Gandal, Neil & Hanson, Gordon H. & Slaughter, M.J.Matthew J., 2004. "Technology, trade, and adjustment to immigration in Israel," European Economic Review, Elsevier, vol. 48(2), pages 403-428, April.

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Journal Article: Technology, trade, and adjustment to immigration in Israel (2004)
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