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Low-technology industries and the skill composition of immigration

Published online by Cambridge University Press:  30 July 2014

Ludovic Rheault
Ludovic Rheault*
Affiliation:
Department of Political Science, University of California, USA E-mail: ludovic.rheault@ucr.edu
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Abstract

This paper examines the relationship between the industry mix and policy decisions regarding the skill composition of immigration. I start with the premise that low- and high-technology industries are unequally affected by changes in the intensity of factors of production, and develop conflicting preferences over immigration policies. To avoid the negative reactions that would ensue from the depletion of regional industries, governments have incentives to adjust the skill composition of immigration in order to maintain the existing regional industry mix. I test the implications of this argument using data on Canadian provinces between 2001 and 2010, and a research design based on the two-stage least squares methodology. Overall, the empirical results are consistent with the theory: provinces relying intensively upon low-technology industries are likely to receive higher proportions of low-skilled immigrants. A consequence is that immigration policies may sustain existing technological gaps between regions and temper down the growth of high-technology sectors.

Keywords

high-technology sectorsimmigration policiesindustry mixRybczynski theoremskill composition of immigration
Type
Research Article
Information
Journal of Public Policy , Volume 35 , Issue 3 , December 2015 , pp. 387 - 420
Copyright
Copyright © Cambridge University Press, 2014 

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