Technology, trade, and adjustment to immigration in Israel

Neil Gandal, Gordon H. Hanson, Matthew J. Slaughter

Research output: Contribution to journalArticlepeer-review

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.

Original languageEnglish
Pages (from-to)403-428
Number of pages26
JournalEuropean Economic Review
Volume48
Issue number2
DOIs
StatePublished - Apr 2004

Keywords

  • Immigration
  • Rybczynski theorem
  • Skill-biased technological change

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