O¤shoring, Immigration, and the Native Wage Distribution

This paper presents a simple model that examines the impact of o¤shoring and im-migration on wages and tests these predictions using U.S. state-industry-year panel data. According to the model, the productivity e¤ect causes o¤shoring to have a more positive impact on low-skilled wages than immigration, but this gap decreases with the workers skill level. The empirical results con\u85rm both of these predictions and thus present direct evidence of the productivity e¤ect. Furthermore, the results provide important insight into how speci\u85c components of o¤shoring and immigration a¤ect the wages of particular types of native workers