Rebound in Immigration Comes to Economy’s Aid
https://www.wsj.com/economy/jobs/rebound-in-immigration-comes-to-economys-aid-60769edb
Rise in foreign-born labor force boosts worker supply, eases wage pressure and aids Federal Reserve’s goal of ‘soft landing’
https://www.wsj.com/economy/jobs/rebound-in-immigration-comes-to-economys-aid-60769edb
Rise in foreign-born labor force boosts worker supply, eases wage pressure and aids Federal Reserve’s goal of ‘soft landing’
The Effect of Low‐Skilled Immigration on U.S. Prices: Evidence from CPI Data by Patricia Cortes
https://doi.org/10.1086/589756
https://doi.org/10.1086/589756
Abstract
I exploit the large variation across U.S. cities and through time in the relative size of the low‐skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services. Using an instrumental variables strategy, I find that, at current immigration levels, a 10 percent increase in the share of low‐skilled immigrants in the labor force decreases the price of immigrant‐intensive services, such as housekeeping and gardening, by 2 percent. Wage equations suggest that lower wages are a likely channel through which these effects take place. However, wage effects are significantly larger for low‐skilled immigrants than for low‐skilled natives, implying that the two are imperfect substitutes.
I exploit the large variation across U.S. cities and through time in the relative size of the low‐skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services. Using an instrumental variables strategy, I find that, at current immigration levels, a 10 percent increase in the share of low‐skilled immigrants in the labor force decreases the price of immigrant‐intensive services, such as housekeeping and gardening, by 2 percent. Wage equations suggest that lower wages are a likely channel through which these effects take place. However, wage effects are significantly larger for low‐skilled immigrants than for low‐skilled natives, implying that the two are imperfect substitutes.
Automation and Low-Skill Labor by Katja Mann and Dario Pozzoli
Abstract
Changes in the supply of low-skill labor may affect robot adoption by firms. We test this hypothesis by exploiting an exogenous increase in the local labor supply induced by a large influx of immigrants into Danish municipalities. Using the Danish employer-employee matched dataset over the period 1995-2019, we show in a shift-share regression that a larger share of migrants in a municipality leads to fewer imports of robots at the firm-level. We rationalize this finding in a simple model of robot adoption in which robots and lowskill workers are substitutes. As many advanced economies are facing labor shortages, this paper sheds light on the future of robotization.
Abstract
Changes in the supply of low-skill labor may affect robot adoption by firms. We test this hypothesis by exploiting an exogenous increase in the local labor supply induced by a large influx of immigrants into Danish municipalities. Using the Danish employer-employee matched dataset over the period 1995-2019, we show in a shift-share regression that a larger share of migrants in a municipality leads to fewer imports of robots at the firm-level. We rationalize this finding in a simple model of robot adoption in which robots and lowskill workers are substitutes. As many advanced economies are facing labor shortages, this paper sheds light on the future of robotization.
Stop seeing immigration as a get-rich-quick scheme
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