Technology, Trade, and Adjustment to Immigration in Israel

44 Pages Posted: 11 Oct 2000 Last revised: 14 Sep 2001

See all articles by Neil Gandal

Neil Gandal

Berglas School of Economics, Tel Aviv University; Centre for Economic Policy Research (CEPR)

Gordon H. Hanson

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS); National Bureau of Economic Research (NBER)

Matthew J. Slaughter

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

Date Written: October 2000

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.

Suggested Citation

Gandal, Neil and Hanson, Gordon H. and Slaughter, Matthew J., Technology, Trade, and Adjustment to Immigration in Israel (October 2000). NBER Working Paper No. w7962. Available at SSRN: https://ssrn.com/abstract=245581

Neil Gandal (Contact Author)

Berglas School of Economics, Tel Aviv University ( email )

Tel Aviv University
Tel Aviv 69978
Israel
+972 3 640 9907 (Phone)
+972 3 640 9908 (Fax)

HOME PAGE: http://www.neilgandal.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Gordon H. Hanson

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matthew J. Slaughter

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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