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GTAP Resources: Resource Display

GTAP Resource #6169

"The Impact of Immigration on Skills, Innovation and Wages: Education Matters more than where People come from"
by Das, Gouranga, Sugata Marjit and Mausumi Kar

With the ensuing immigration reform in the US, the paper shows that targeted skilled immigration into the R&D sector that helps low-skilled labor is conducive for controlling inequality and raising wage. Skilled talent-led innovation could have spillover benefits for the unskilled sector while immigration into the production sector will always reduce wage, aggravating wage inequality. In essence, we infer: (i) if R&D inputs contributes only to skilled sector, wage inequality increases in general; (ii) for wage gap to decrease, R&D sector must produce inputs that goes into unskilled manufacturing sector; (iii) even with two types of specific R&D inputs entering into the skilled and unskilled sectors separately, unskilled labor is not always benefited by high skilled
migrants into R&D-sector. Rather, it depends on the importance of migrants’ skill in R&D activities and intensity of inputs. Empirical verification using a VAR model in the context of the USA confirms the conjectures, and the empirical results substantiate our policy-guided hypothesis that skilled immigration facilitates innovation with favorable impact on reducing wage-gap. Inclusive immigration policy requires inter-sectoral diffusion of ideas embedded in talented immigrants targeted for innovation.

Resource Details (Export Citation) GTAP Keywords
Category: Other CGE Application
Status: Published
By/In: Journal of Policy Modelling
Date: 2020
Version: 1
Created: Das, G. (6/12/2020)
Updated: Batta, G. (6/12/2020)
Visits: 924
- Demographics
- Economic development
- Labor market issues
- Migration
- Technological change
- Other data bases and data issues

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