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Olney on Immigration & Outsourcing

By Lawrence Solum

William W. Olney (University of Colorado at Boulder) has posted Does Immigration Substitute for Offshoring? on SSRN. Here is the abstract:

Research generally focuses on how immigration affects native workers, while the impact of immigration on domestic firms is often overlooked. This paper addresses this important omission by examining whether firms respond to immigration by adjusting the location of their production activities. Consistent with the predictions of the model, the results suggest that low skilled immigration decreases offshoring while high skilled immigration increases offshoring. This suggests that a policy that restricts immigration will have important implications for the organizational structure of domestic firms. Furthermore, these results explain why the impact of immigration on the wages of native workers is often found to be quite small.

Full post as published by Legal Theory Blog on March 25, 2009 (boomark / email).