Offshoring, Automation, Low-Skilled Immigration, and Labor Market Polarization

A-Tier
Journal: American Economic Journal: Macroeconomics
Year: 2022
Volume: 14
Issue: 1
Pages: 355-89

Authors (2)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that the observed polarization of employment toward the high- and low-skill occupations disappears when only native workers are considered. Instead, low-skilled immigration explains employment growth at the low tail of the skill distribution. Moreover, while employment rose, wages remained subdued in low-skill occupations. A data-disciplined structural model accounts for this evidence: Offshoring and automation negatively affect middle-skill occupations but enhance employment and wages for the high-skilled. Low-skill employment is sheltered from offshoring and automation, as it consists of manual, non-tradable services. However, low-skilled immigration depresses low-skill wages and encourages native workers to move into skilled occupations through training.

Technical Details

RePEc Handle
repec:aea:aejmac:v:14:y:2022:i:1:p:355-89
Journal Field
Macro
Author Count
2
Added to Database
2026-01-25