Journal Article

Immigration, Skill Mix, and Capital Skill Complementarity

Ethan Lewis

in The Quarterly Journal of Economics

Published on behalf of President and Fellows of Harvard University

Volume 126, issue 2, pages 1029-1069
Published in print May 2011 | ISSN: 0033-5533
Published online May 2011 | e-ISSN: 1531-4650 | DOI: https://dx.doi.org/10.1093/qje/qjr011
Immigration, Skill Mix, and Capital Skill Complementarity

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  • Technological Change; Research and Development
  • International Trade
  • Demand and Supply of Labour

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Over the past thirty years, U.S. manufacturing plants invested heavily in automation machinery. This paper shows these investments substituted for the least-skilled workers and complemented middle-skilled workers at equipment and fabricated metal plants. Specifically, it exploits the fact that some metropolitan areas experienced faster growth in the relative supply of less-skilled labor in the 1980s and 1990s due to an immigration wave and the tendency of immigrants to regionally cluster. Plants in these areas adopted significantly less machinery per unit output, despite having similar adoption plans initially. The results imply that fixed rental rates for automation machinery reduce the effect that immigration has on less-skilled relative wages.

Keywords: J20; O30; F10

Journal Article.  14090 words.  Illustrated.

Subjects: Technological Change; Research and Development ; International Trade ; Demand and Supply of Labour

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