Do Firms Respond to Immigration?

Research generally focuses on how immigration a€ects native workers, while the impact of immigration on domestic .rms is often overlooked. This paper addresses this important omission by examining whether .rms respond to immigration by adjusting the location of their production activities. The results indicate that .rms respond to immigration at the extensive margin by increasing the number of establish- ments and at the intensive margin by increasing the size of existing establishments. This is an important .nding because .rm mobility can explain the insigni.cant im- pact of immigration on wages found using regional data but the negative impact found using national level data. Additional evidence indicates that these results are not driven by immigrants simply consuming more goods and services.immigration, firm structure, establishment births & deaths

Offshoring, Immigration, and the Native Wage Distribution

While workers in developed countries have become increasingly concerned about the impact that offshoring and immigration have on their wages, the available evidence remains mixed. This paper presents a simple model that examines the impact offshoring and immigration on wages and tests these predictions using U.S. state-industry-year panel data. According to the model, the productivity effect causes offshoring to have a more positive impact on low-skilled wages than immigration, but this gap decreases with the workers. skill level. The empirical results confirm both of these predictions and thus present direct evidence of the productivity effect. Furthermore, the results provide important insight into how specific components of o€shoring and immigration affect the wages of particular types of native workers.offshoring, outsourcing, immigration, productivity effect, native wages

Remittances and the Wage Impact of Immigration

This paper is the first to examine the impact of immigrant remittances on the wages of native workers in the host country. The model shows that the effect of immigration on wages depends on the ratio of an immigration-induced change in the consumer base relative to an immigration-induced change in the workforce. Remittances provide a unique way of identifying changes in this ratio since they reduce the consumer base but not the workforce. The model is then tested using an unusual data set that follows the same individuals over time and has detailed information on remittances. Consistent with the prediction of the model, the results indicate that remittances depress the wages of native workers, especially those in non-traded industries.Remittances; Immigration; Wages

Globalization and Investment in Human Capital

Workers are becoming increasingly concerned about the impact that globaliza- tion has on their domestic labor market. While existing research typically focuses on the effects on labor market outcomes such as wages and employment, we examine whether American workers respond to globalization by increasing their investment in human capital. Specifically, we measure the extent to which offshoring and immigra- tion affect enrollment at institutions of higher education. The results indicate that both offshoring and immigration increase enrollment at community colleges, particu- larly among older students. We conclude that workers in the U.S. are responding to offshoring and immigration by acquiring the skills necessary to compete in a global economy.globalization, higher education, enrollment, offshoring, immigration

A Race to the Bottom? Employment Protection and Foreign Direct Investment

A common critique of globalization is that it leads to a race to the bottom. This hypothesis assumes that multinationals invest in countries with lower regulatory standards and that countries competitively undercut each other's standards in response. This paper finds empirical evidence of both propositions. First, a reduction in employment protection rules leads to an increase in foreign direct investment (FDI). Not surprisingly, changes in employment protection legislation have a larger impact on the relatively mobile types of FDI. Second, there is evidence that countries are competitively undercutting each other's labor market standards.foreign direct investment; employment protection; race to the bottom

A race to the bottom? Employment protection and foreign direct investment

Abstract A common critique of globalization is that it leads to a race to the bottom. Specifically, it is assumed that multinationals invest in countries with lower regulatory standards and that countries competitively undercut each other's standards in response. This paper tests this hypothesis and finds empirical support for both propositions. First, a reduction in employment protection rules leads to an increase in foreign direct investment (FDI)

Globalization and Executive Compensation

This paper identifies globalization as a factor behind the rapid increase in executive compensation and inequality over the last few decades. Employing comprehensive data on top executives at major U.S. companies, we show that compensation is higher at more global firms. We find that pay responds not only to firm size and technology but also to exports conditional on other firm characteristics. Export shocks that are not related to the executive’s talent and actions also increase executive compensation, indicating that globalization is influencing compensation through pay-for-non-performance. Furthermore, this effect is asymmetric, with executive compensation increasing due to positive export shocks but not decreasing due to negative shocks. Finally, export shocks primarily affect discretionary forms of compensation of more powerful executives at firms with poor corporate governance, as one would expect if globalization has enhanced rent-capture opportunities. Overall, these results indicate that globalization has played a more central role in the rapid growth of executive compensation and U.S. inequality than previously thought, and that both higher returns to top talent and rent-capture are important parts of this story