Offshoring, immigration, and the domestic labor market

Advances in transportation and communication have led to an increasingly integrated global economy. While the benefits of globalization are often stressed, workers are worried about how offshoring and immigration affect their local labor markets. My research examines whether these fears are justified. Specifically, I examine how offshoring and immigration affect wages, firm location decisions, and educational attainment.;In "Offshoring, Immigration, and the Native Wage Distribution," I compare and contrast the impact of offshoring and immigration on native wages. Offshoring and immigration are similar in that both increase the effective labor force available to domestic firms and thus can put downward pressure on native wages. They differ in that only offshoring generates direct cost savings, or a productivity effect, which can increase native wages. The empirical results support the predictions of the model and provide the first empirical evidence of the productivity effect.;In "Do Firms Respond to Immigration?" I examine whether firms respond to immigration by adjusting the location of their production activities. Consistent with the predictions of the model, the results indicate that low skilled immigration decreases and high skilled immigration increases the relocation of production activities at both the extensive and intensive margins.;Finally, in "Globalization and Investment in Human Capital," we examine whether American workers respond to globalization by increasing their investment in human capital. The results indicate that both offshoring and immigration increase enrollment at community colleges, particularly among older students. We conclude that workers in the U.S. are responding to offshoring and immigration by acquiring the skills necessary to compete in a global economy.