Computerization and Immigration: Theory and Evidence from the United States

71 Pages Posted: 16 Oct 2017

See all articles by Gaetano Basso

Gaetano Basso

Bank of Italy; Fondazione Rodolfo Debenedetti

Giovanni Peri

University of California, Davis - Department of Economics

Ahmed Rahman

United States Naval Academy

Date Written: October 2017

Abstract

Recent technological changes have been characterized as “routine-substituting,” reducing demand for routine tasks but increasing it for analytical and service tasks. Little is known about how these changes have impacted immigration, or task specialization between immigrants and natives. In this paper we show that such technological progress has been an important determinant of immigration, attracting immigrants who increasingly specialize in manual-service occupations. We also suggest that open- ness to immigration attenuated job and wage polarization for natives resulting from technological changes. We explain these facts with a model of technological progress and endogenous immigration. Simulations show that unskilled immigration attenuates the drop in routine employment proceeding from technological change, enhances skill-upgrading for natives, and raises economy-wide productivity and welfare.

Suggested Citation

Basso, Gaetano and Peri, Giovanni and Rahman, Ahmed, Computerization and Immigration: Theory and Evidence from the United States (October 2017). NBER Working Paper No. w23935. Available at SSRN: https://ssrn.com/abstract=3053736

Gaetano Basso (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Fondazione Rodolfo Debenedetti ( email )

Via Roentgen 1,
Room 5.C1-11
Milan, Milano 20136
Italy

Giovanni Peri

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)

Ahmed Rahman

United States Naval Academy ( email )

121 Blake Road
Annapolis, MD 21402
United States

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