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

52 Pages Posted: 14 Sep 2007 Last revised: 3 Aug 2010

See all articles by Chad Sparber

Chad Sparber

Colgate University - Economics Department

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: September 2007

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.

Suggested Citation

Sparber, Chad and Peri, Giovanni, Task Specialization, Comparative Advantages, and the Effects of Immigration on Wages (September 2007). NBER Working Paper No. w13389. Available at SSRN: https://ssrn.com/abstract=1014337

Chad Sparber

Colgate University - Economics Department ( email )

13 Oak Drive
Hamilton, NY 13346
United States

Giovanni Peri (Contact Author)

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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