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Technology, trade, and adjustment to immigration in Israel |
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| Authors: | Neil Gandal Gordon H Hanson Matthew J Slaughter |
| Affiliation: | a Department of Public Policy, Tel Aviv University, Tel Aviv 69978, Israel b Center for Economic Policy Research, 90-98 Goswell Road, London, ECIV 7RR, UK c Graduate School of International Relations and Pacific Studies, University of California, San Diego, 9500 Gilman Drive, La Jolla, CA 92093, USA d National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138, USA e Tuck School of Business, Dartmouth College, Hanover, NH 03755, USA |
| Abstract: | In the early 1990s Israel experienced a surge of immigration from the former Soviet Union. Russian immigrants had high relative education levels. There is little evidence that the immigration shock put downward pressure on Israeli wages. We examine two mechanisms through which Israel may have absorbed labor-supply changes related to the Russian immigration: Global changes in production technology and national changes in output mix. Global changes in production techniques, which appear consistent with skill-biased technical change, were sufficient to more than offset Israel's change in relative factor supplies. Changes in output mix did not help Israel absorb changes in relative factor supplies. |
| Keywords: | F16 F22 J31 J61 |
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