This paper develops a model of comparative advantage in labor markets in which workers with heterogeneous skills choose the occupations that best use those skills. Application to immigration suggests that the occupational differences between U.S. natives and immigrants arise from human capital differences. This principle makes it possible to estimate the human capital endowments of immigrants along five dimensions, including cognitive ability and physical skills, which are difficult to measure directly. Counterfactual simulations describe the distributional implications of immigration for native wages.
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)