Abstract

The aging economies facing secular labor shortage are bound to respond by admitting foreign labor or by adopting labor-saving technology. This paper proposes that inflows of regional foreign labor guides the penetration of automation. I develop a dynamic spatial framework, in which tasks are optimally allocated across robots, and domestic or foreign labor. Then, I semi-parametrically recover cross-factor substitution schedules from a series of commuting zone-level elasticities of economic outcomes with respect to immigration, which are estimated using a 1940 ethnic settlement pattern. The model predicts that immigrationճ impact on wages during 1980-2015 could be reversed by including effects from immigration-induced adjustments of automation. I find that low-skilled immigration alone reduces routine occupation native wages, but raises the wages in the long run by retarding the adoption of automation, resulting in enhanced domestic welfare. Finally, I find that a universal basic income policy targeted to U. S. citizens will boost dependence on automation and foreign labor by upshifting routine occupation native wages.

Committee Chair

George-Levi Gayle

Committee Members

Gaetano Antinolfi, Francisco Buera, Alexander Monge-Naranjo, Yongseok Shin,

Degree

Doctor of Philosophy (PhD)

Author's Department

Economics

Author's School

Graduate School of Arts and Sciences

Document Type

Dissertation

Date of Award

Spring 5-15-2020

Language

English (en)

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Available for download on Wednesday, May 15, 2120

Included in

Economics Commons

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