Skill, Innovation and Wage Inequality: Can Immigrants be the Trump Card?

Arbeitspapier

With the ensuing immigration reform in the US, the paper shows that targeted skilled immigration into the R&D sector that helps low-skilled labor is conducive for controlling inequality and raising wage. Skilled talent-led innovation could have spillover benefits for the unskilled sector while immigration into the production sector will always reduce wage, aggravating wage inequality. In essence, we infer: (i) if R&D inputs contributes only to skilled sector, wage inequality increases in general; (ii) for wage gap to decrease, R&D sector must produce inputs that goes into unskilled manufacturing sector; (iii) even with two types of specific R&D inputs entering into the skilled and unskilled sectors separately, unskilled labor is not always benefited by high skilled migrants into R&D-sector. Rather, it depends on the importance of migrants’ skill in R&D activities and intensity of inputs. Inclusive immigration policy requires inter-sectoral diffusion of ideas embedded in talented immigrants targeted for innovation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7082

Classification and Topics

• Classification: Wirtschaft ; International Migration ; Wage Level and Structure; Wage Differentials ; Economic Development: Human Resources; Human Development; Income Distribution; Migration
• Subject: HIB ; immigration ; innovation ; wage gap ; skill ; R&D ; policy ; RAISE Act

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Das, Gouranga Gopal ; Marjit, Sugata
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/180344
• Last update: 10.03.2025, 11:44 AM CET