the effect of immigration along the distribution of wages this paper analyses the effect immigration has on wages of native workers unlike most previous work we estimate wage effects along the distribution of wages we derive a flexible empirical strategy that does not rely on pre allocating immigrants to particular skill groups in our empirical analysis we demonstrate that immigrants downgrade considerably upon arrival as for the effects on native wages we find that immigration depresses wages below the 20th percentile of the wage distribution but leads to slight wage increases in the upper part of the wage distribution the overall wage effect of immigration is slightly positive the positive wage effects we find are although modest too large to be explained by an immigration surplus we suggest alternative explanations based on the idea that immigrants are paid less than the value of what they contribute to production generating therefore a surplus and we assess the magnitude of these effects

structural change in an open economy we study the importance of international trade in structural change our framework has both productivity and trade cost shocks and allows for non unitary income and substitution elasticities we calibrate our model to investigate south korea s structural change between 1971 and 2005 we nd that the shock processes propagated through the model s two main transmission mechanisms non homothetic preferences and the open economy explain virtually all of the evolution of agriculture and services labor shares and the rising part of the hump shape in manufacturing counterfactual exercises show that the role of the open economy is quantitatively important for explaining south korea s structural change

urban biased policies and rising income inequality in china since the start of economic reforms in 1978 china has experienced the largest increase in income inequality of all countries for which comparable data are available according to the world bank 1997 china s gini coefficient increased from 28 2 in 1981 to 38 8 in 1995 based on official survey data another study that used internationally standard definitions for incomes estimated china s gini ratio at 38 2 in 1988 and 45 2 in 1995 a level that already surpassed many developing economies in asia azizur khan and carl riskin 1998 are these income inequality changes the consequence of institutional reforms that replaced egalitarian rewards with work incentives employment contracts and labor mobility this paper uses household survey data collected by china s state statistical bureau ssb to investigate the sources and causes of this rising inequality by analyzing gini ratios and generalized entropy measures i decompose the overall inequality into three sectoral components i inequality within rural areas ii inequality within urban areas and iii sectoral disparity the data indicate that increases in rural urban income differentials have been the driving factor behind the rising overall inequality in china i argue that urbanbiased policies and institutions including labor mobility restrictions welfare systems and financial policies of inflation subsidies and investment credits to the urban sector are responsible for the long term rural urban divide and the recent increases in disparity

the role of trade in structural transformation abstract low agriculture productivity is considered a key obstacle to economic development for many countries international trade in agricultural goods can help overcome this barrier and facilitate structural transformation because it allows countries to import part of their food needs this article quantifies the role of trade in this context through the examples of south korea during the last 50 years and great britain in the 19th century to do the analysis i calibrate and simulate a two sector neoclassical growth model to match the data and perform the policy experiments i find that agricultural imports played a crucial role in the early transformation of great britain while in south korea trade also had a positive impact on its structural transformation but it could have played a much larger role if the country had not introduced agricultural protection policies

an introduction to the economics of immigration in oecd countries the share of the foreign born in oecd countries is increasing and this article summarizes economics research on the effects of immigration in those nations four broad topics are addressed labor market issues fiscal questions the political economy of immigration and productivity international trade extreme concerns about deleterious labour market and fiscal impacts following from new immigrants are not found to be warranted however it is also clear that government policies and practices regarding the selection and integration of new migrants affect labour market fiscal and social cultural outcomes policies that are well informed well crafted and well executed beneficially improve population welfare

the enduring impact of the american dust bowl short and long run adjustments to environmental catastrophe the 1930 s american dust bowl was an environmental catastrophe that greatly eroded sections of the plains analyzing new data collected to identify low medium and high erosion counties the dust bowl is estimated to have immediately substantially and persistently reduced agricultural land values and revenues during the depression and through at least the 1950 s there was limited reallocation of farmland from activities that became relatively less productive agricultural adjustments such as reallocating land from crops to livestock recovered only 14 to 28 of the initial agricultural cost the economy adjusted predominately through migration rather than through capital inows and increased industry

review on the costs and benefits of renewable energy power subsidy in china abstract nowadays renewable energy plays a vital role in the sustainable development of a society in china renewable energy power has developed rapidly since the implementation of renewable energy act through a series of specific incentive measures especially subsidy policies china s renewable energy power has made great achievements both in technology and application based on the state of the art of renewable energy power this paper comprehensively analyzed the costs and benefits of renewable energy power subsidy in china the analysis results show the cost of renewable energy power subsidy was 0 248 cny kwh between 2006 and april 2011 which was distributed among different renewable energy power types including wind power biomass power and solar pv power or categories including electricity price accessing grid projects and public independent renewable energy power system on the other hand the renewable energy power subsidy also brings benefits to different aspects of the society specifically the environmental benefit amounted to 17 88 billion cny and the benefits of guaranteeing energy security advancing technology innovation and promoting economic development were also noteworthy

tipping and the dynamics of segregation schelling dynamic models of segregation journal of mathematical sociology 1 1971 143 186 showed that extreme segregation can arise from social interactions in white preferences once the minority share in a neighborhood exceeds a tipping point all the whites leave we use regression discontinuity methods and census tract data from 1970 through 2000 to test for discontinuities in the dynamics of neighborhood racial composition we find strong evidence that white population flows exhibit tipping like behavior in most cities with a distribution of tipping points ranging from 5 to 20 minority share tipping is prevalent both in the suburbs and near existing minority enclaves in contrast to white population flows there is little evidence of nonlinearities in rents or housing prices around the tipping point tipping points are higher in cities where whites have more tolerant racial attitudes

the role of the structural transformation in aggregate productivity we investigate the role of sectoral differences in labor productivity in explaining the process of structural transformation the secular reallocation of labor across sectors and the time path of aggregate productivity across countries using a simple model of the structural transformation that is calibrated to the growth experience of the united states we measure sectoral labor productivity differences across countries productivity differences between rich and poor countries are large in agriculture and services and smaller in manufacturing moreover over time productivity gaps have been substantially reduced in agriculture and industry but not nearly as much in services in the model these sectoral productivity patterns generate implications that are broadly consistent with the cross country evidence on the structural transformation aggregate productivity paths and relative prices we show that productivity catch up in industry explains about 50 percent of the gains in aggregate productivity across countries while low relative productivity in services and the lack of catch up explains all the experiences of slowdown stagnation and decline observed across countries

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

attenuation bias in measuring the wage impact of immigration although economic theory predicts an inverse relation between relative wages and immigration induced supply shifts it has been difficult to document such effects the weak evidence may be partly due to sampling error in a commonly used measure of the supply shift the immigrant share of the workforce after controlling for permanent factors that determine wages in specific labor markets little variation remains in the immigrant share we find significant sampling error in this measure of supply shifts in canadian and u s census data correcting for the resulting attenuation bias can substantially increase existing estimates of the wage impact of immigration

the depressing effect of agricultural institutions on the prewar japanese economy why didn t the japanese miracle take place before world war ii the culprit we identify is a barrier that kept prewar agricultural employment constant using a standard neoclassical two sector growth model we show that the barrier induced sectoral distortion and an ensuring lack of capital accumulation account well for the depressed output level without the barrier japan s prewar gnp per worker would have been at least about a half of that of the united states not about a third as in the data the labor barrier existed because we argue the prewar patriarchy forced the son designated as heir to stay in agriculture

this job is getting old measuring changes in job opportunities using occupational age structure high and low wage occupations are expanding rapidly relative to middle wage occupations in both the u s and the e u we study the reallocation of workers from middle skill occupations towards the tails of the occupational skill distribution by analyzing changes in age structure within and across occupations because occupations typically expand by hiring young workers and contract by curtailing such hiring we posit that growing occupations will get younger while shrinking occupations will get old after verifying this proposition we apply this observation to local labor markets in the u s to test whether markets that were specialized in middle skilled occupations in 1980 saw a differential movement of both older and younger workers into occupations at the tails of the skill distribution over the subsequent 25 years consistent with aggregate trends employment in initially middle skill intensive labor markets hollowed out between 1980 and 2005 employment losses among non college workers in the middle of the occupational skill distribution were almost entirely countered by employment growth in lower tail occupations for college workers employment losses at the middle were offset in roughly equal measures by gains in the upper and lower tails of the occupational skill distribution but gains at the upper tail were almost entirely limited to young college workers consequently older college workers are increasingly found in lower skill lower paying occupations this abstract was borrowed from another version of this item

the effect of migration on wages evidence from a natural experiment the objective of this paper is to employ the hurricane katrina evacuation into houston tx as a natural experiment to estimate the effect of large scale in migration on regional earnings given the characteristics of the evacuees their influx would have caused the supply of applicants for lower skilled jobs to increase proportionately more than for higher skilled jobs we utilize a differences in differences in differences methodology in which we compare differences in average earnings in the low skill non traded goods industries to the corresponding differences in the set of high skill industries in the houston and dallas fort worth msas before and after the katrina induced migration unlike previous studies we include a measure of the post storm increase in demand for local goods and services on the demand for labor we find evidence that the relative average payroll in the low skill non tradable goods industries in houston decreased by 7 when compared to the relative change for the same group of industries in dallas our findings also suggest that failure to account for demand side influences following the migration results in significant under estimation of wage effects due to the shift in labor supply

timing is everything short run population impacts of immigration in us cities abstract we provide the first analysis of the short run causal impact of immigrant inflows on native populations at the local labor market level using published statistics from the american community surveys of 2000 2010 we examine how immigrant inflow shocks to a metropolitan area affect native populations we find that immigrant inflows are associated with increases in local native populations on an annual basis but that these ols estimates are generally upward biased our iv results are purged of this bias but we still find that an additional immigrant increases the low skill native population by 0 4 0 7 in the concurrent period to explain this result we show that immigrant inflows lead to declines in outflows of low skill natives from affected msas this is most pronounced in msas from which relocation is arguably more costly which may disproportionately affect the low skilled we find short run responses among high skill natives that are consistent with displacement the decline in high skilled native populations is driven by high skilled immigrant inflows and high skilled outflows increase from affected msas we show that these short run changes are obscured in specifications using longer run population changes and conclude that the short run impact of immigrants on native populations differs markedly from their longer run impact

the alaskan labor market during the pipeline era built between 1974 and 1977 the trans alaska pipeline was the largest privately financed construction project in world history the alaskan labor market during the pipeline era provides an ideal opportunity to view labor market responses to a large anticipated and temporary shock to labor demand the paper presents several theoretical models of market responses to temporary demand shocks and then assesses the ability of each model to explain the alaskan data among the findings are that alaskan wages were very flexible labor supply was quite elastic on both the intensive hours per worker and extensive number of workers margins and even a major short run demand shock need not have a long run impact

immigration and wage dynamics evidence from the mexican peso crisis how does the us labor market absorb low skilled immigration i address this question using the 1995 mexican peso crisis an exogenous push factor that raised mexican migration to the us in the short run high immigration states see their low skilled labor force increase and native low skilled wages decrease with an implied local labor demand elasticity of 7 internal relocation dissipates this shock spatially in the long run the only lasting consequences are for low skilled natives who entered the labor force in high immigration years a simple quantitative many region model allows me to obtain the counterfactual local wage evolution absent the immigration shock

the effect of low skilled immigration on u s prices evidence from cpi data i exploit the large variation across u s cities and through time in the relative size of the low skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services using an instrumental variables strategy i find that at current immigration levels a 10 percent increase in the share of low skilled immigrants in the labor force decreases the price of immigrant intensive services such as housekeeping and gardening by 2 percent wage equations suggest that lower wages are a likely channel through which these effects take place however wage effects are significantly larger for low skilled immigrants than for low skilled natives implying that the two are imperfect substitutes

the geography of trade and technology shocks in the united states abstract this paper explores the geographic overlap of trade and technology shocks across local labor markets in the united states regional exposure to technological change as measured by specialization in routine task intensive production and clerical occupations is largely uncorrelated with regional exposure to trade competition from china while the impacts of technology are dispersed throughout the united states the impacts of trade tend to be more geographically concentrated owing in part to the spatial agglomeration of labor intensive manufacturing our findings highlight the feasibility of separately identifying the impacts of recent changes in trade and technology on us regional economies

income maximization and the selection and sorting of international migrants abstract two prominent features of international labor movements are that the more educated are more likely to emigrate positive selection and more educated migrants are more likely to settle in destination countries with high rewards to skill positive sorting using data on emigrant stocks by schooling level and source country in oecd destinations we find that a simple model of income maximization can account for both phenomena results on selection show that migrants for a source destination pair are more educated relative to non migrants the larger is the absolute skill related difference in earnings between the destination country and the source results on sorting indicate that the relative stock of more educated migrants in a destination is increasing in the absolute earnings difference between high and low skilled workers we use our framework to compare alternative specifications of international migration estimate the magnitude of migration costs by source destination pair and assess the contribution of wage differences to how migrants sort themselves across destination countries

searching for the effect of immigration on the labor market we compare two approaches to analyzing the effects of immigration on the labor market and find that the estimated effect of immigration on u s native labor outcomes depends critically on the empirical experiment used area analyses contrast the level or change in immigration by area with the level or change in the outcomes of non immigrant workers factor proportions analyses treat immigrants as a source of increased national supply of workers of the relevant skill the different effects of immigration on native outcomes in the area and factor proportions methodologies appear to result from the diluting effect of native migration flows across regions and failure to take adequate account of other regional labor market conditions in area comparisons excerpt

renewable generation across italian regions spillover effects and effectiveness of european regional fund abstract this paper investigates on the determinant factors that drive the italian regions toward a sustainable development path and evaluates the effectiveness of european regional development incentives in promoting investments in renewable energy sources res starting from the consideration that there are spillover effects between similar regions first we identify the factors that capture these similarities then we use them to evaluate their relevance in determining the success of the investments in res an econometric analysis based on the use of spatial panel specification model is implemented to support the hypotheses two important results emerge from the study the first is the identification of regional determinants of res production that are driven by the similarities between regions and that can be interpreted as guidelines in the policy choices in support of investments the second is the lack of effectiveness of the incentives in support of res results indicate that the capacity of some regional governments to direct the funds allocated by the central government or european commission towards efficient production of renewable energy is likely limited and these incentives have been undone

shift share designs theory and inference we study inference in shift share regression designs such as when a regional outcome is regressed on a weighted average of sectoral shocks using regional sector shares as weights we conduct a placebo exercise in which we estimate the effect of a shift share regressor constructed with randomly generated sectoral shocks on actual labor market outcomes across u s commuting zones tests based on commonly used standard errors with 5 nominal significance level reject the null of no effect in up to 55 of the placebo samples we use a stylized economic model to show that this overrejection problem arises because regression residuals are correlated across regions with similar sectoral shares independent of their geographic location we derive novel inference methods that are valid under arbitrary cross regional correlation in the regression residuals we show using popular applications of shift share designs that our methods may lead to substantially wider confidence intervals in practice

structural change in an interdependent world a global view of manufacturing decline this paper presents a simple model of the world economy in which productivity gains in manufacturing are responsible for the global trend of manufacturing decline and yet in a cross section of countries faster productivity gains in manufacturing do not necessarily imply faster declines in manufacturing in doing so it aims to draw attention to the common pitfall of using the cross country evidence to test a closed economy model and argues for a global perspective in order to understand cross country patterns of structural change one needs a world economy model in which the interdependence across countries is explicitly spelled out jel f43 o11 o14 o19

measuring the labor market impacts of hurricane katrina migration evidence from houston texas hurricane katrina made landfall on the us gulf coast as a category three storm on the morning of august 29 2005 with winds reach ing speeds of 130 miles per hour and storm surges as high as 27 feet katrina caused unprec edented damage along the coasts of alabama mississippi and louisiana unofficial estimates suggest that 100 000 to 150 000 evacuees moved to the houston texas metropolitan area repre senting a 3 to 4 percent increase in the population adrian campo flores 2005 some anecdotal evidence suggests that many evacuees expect to stay in the houston metro area indefinitely 2 katrina disproportionately affected minorities and the disadvantaged thomas gabe et al 2005 find that the evacuees who were most acutely affected by the storm were significantly more likely to be black poor and unemployed and were significantly less educated compared to other evacuees and compared to the nation on average in this paper i examine the effect of the migration of katrina evacuees on the houston metropolitan area labor market using current population survey cps data from september 2000 to august 2006 to quantify the effect of hurricane katrina migration i compare wages and employment before and after the storm among nonevacuees residing in houston or native houstonians and in other metro areas that were not directly or indirectly affected by the storm in addition i allow the effects to vary by gender education and race and ethnicity the existing studies of the effect of immigra tion on the labor market outcomes among native born workers provide a good point of comparison for this analysis see rachel m friedberg and jennifer hunt 1995 and david card 2005 for reviews of this literature in a study similar to this one adriana kugler and mutlu yuksel 2006 find negative employment effects among low educated native workers and positive wage effects among highly educated workers in the us border states after hurricane mitch struck central america in october 1998 more gener ally there are numerous studies that examine the impact of an unexpected increase in the local labor supply due to immigration including papers by card 1990 hunt 1995 william carrington and pedro de lima 1996 and friedberg 2001 collectively these studies find small and insig nificant effects of immigration on local labor market outcomes for native workers other studies estimate the effect of immi gration on local labor markets using varia tion across receiving areas and across time in the immigrant share of the labor force and these studies produce conflicting results card 2001 2005 finds that local labor market out comes for unskilled natives are only marginally affected by immigration while george j borjas 2006 shows that the wage effect of immigra tion increases when the labor market is defined at the national level instead of at the local level since workers are more likely to migrate between localities than between countries in response to increased labor market competition due to immigration however gianmarco i p ottaviano and giovanni perri 2006 argue that by ignoring capital mobility and by assuming that immigrant and native workers are perfect substitutes in the labor market borjas overstates the size of the effect industrial relations section firestone library prince ton university princeton nj 08544 e mail mfifer princeton edu i am grateful to henry f rber elizabeth fussell alan krueger michael rothschild jesse rothstein and cecilia rouse for their guidance and leandro carvalho jason deparle matthew ericson jane fortson and participants at the princeton university graduate labor lunch and public finance working group and at the tulane university disaster and migration conference for helpful comments and suggestions i am responsible for the contents and for all remaining errors 1 jason de parle katrina s tide carries many to hope ful shores new york times april 23 2006 2 susan saulny putting down new roots on more solid ground new york times september 7 2005 simon romero shelters grow empty as apartments open up new york times september 8 2005

are college graduates more responsive to distant labor market opportunities abstract are highly educated workers better at locating in areas with high labor demand to answer this question i use three decades of u s census data to estimate a mcfadden style model of residential location choice i test for education differentials in the likelihood that young workers reside in states experiencing positive labor demand shocks at the time these workers entered the labor market i find effects of changes in state labor demand on college graduate location choice that are several times greater than for high school graduates nevertheless medium run wage effects of entry labor market conditions for college graduates equal or exceed those of less educated workers

natural disasters and the effect of trade on income a new panel iv approach natural disasters affect bilateral trade we use this fact to generalize the instrumental variables strategy of frankel and romer 1999 to a panel setup this allows revisiting an old question does openness cause per capita gdp we work with a modified gravity framework in which we interact foreign natural disasters with geography predicting the exogenous component of bilateral trade flows and aggregating over trade partners we obtain a time varying instrument for multilateral openness of a country controlling for constant determinants of income history geography by means of fixed effects we find a robust positive effect of trade on income averaging 0 74 the estimated elasticity is substantially smaller than the one obtained in the cross section poor or non oecd countries feature a larger elasticity

the economic effects of a citywide minimum wage this paper presents the first study of the economic effects of a citywide minimum wage san francisco s adoption of an indexed minimum wage set at 8 50 in 2004 and 9 14 by 2007 compared to earli

revisiting the minimum wage employment debate throwing out the baby with the bathwater we revisit the minimum wage employment debate which is as old as the department of labor in particular we assess new studies claiming that the standard panel data approach used in much of the new minimum wage research is flawed because it fails to account for spatial heterogeneity these new studies use research designs intended to control for this heterogeneity and conclude that minimum wages in the united states have not reduced employment we explore the ability of these research designs to isolate reliable identifying information and test the untested assumptions in this new research about the construction of better control groups our evidence points to serious problems with these research designs we conclude that the evidence still shows that minimum wages pose a tradeoff of higher wages for some against job losses for others and that policymakers need to bear this tradeoff in mind when making decisions about increasing the minimum wage

assessing inherent model bias an application to native displacement in response to immigration abstract there is a long standing debate among academics about the effect of immigration on native internal migration decisions if immigrants displace natives this may indicate a direct cost of immigration in the form of decreased employment opportunity for native workers moreover displacement would also imply that cross region analyses of wage effects systematically underestimate the consequences of immigration the widespread use of such area studies for the us and other countries makes it especially important to know whether a native internal response to immigration truly occurs this paper introduces a microsimulation methodology to test for inherent bias in regression models that have been used in the literature we show that some specifications have built biases into their models thereby casting doubt on the validity of their results we then provide a brief empirical analysis with a panel of observed us state by skill data together our evidence argues against the existence of native displacement this implies that cross region analyses of immigration s effect on wages are still informative

immigration and inequality immigration is often viewed as a proximate cause of the rising wage gap between highand low skilled workers nevertheless there is controversy over the appropriate theoretical and empirical framework for measuring the presumed effect and over the precise magnitudes involved this paper offers an overview and synthesis of existing knowledge on the relationship between immigration and inequality focusing on evidence from cross city comparisons in the u s while some researchers have claimed that a cross city research design is inherently flawed i argue that the evidence from cross city comparisons is remarkably consistent with recent findings based on aggregate time series data in particular cross city and aggregate time series comparisons provide support for three key conclusions 1 workers with below high school education are perfect substitutes for those with a high school education 2 high school equivalent and college equivalent workers are imperfect substitutes with an elasticity of substitution on the order of 2 3 within education groups immigrants and natives are imperfect substitutes together these results imply that the average impacts of recent immigrant inflows on the relative wages of u s natives are small the effects on overall wage inequality including natives and immigrants are larger reflecting the concentration of immigrants in the tails of the skill distribution and higher residual inequality among immigrants than natives even so immigration accounts for a small share 5 of the increase in u s wage inequality between 1980 and 2000

opportunities and challenges for renewable energy policy in china renewable energy is the inevitable choice for sustainable economic growth for the harmonious coexistence of human and environment as well as for the sustainable development government support is the key and initial power for developing renewable energy in this article an overall review has been conducted on renewable energy development policy including laws and regulations economic encouragement technical research and development industrialized support and government model projects etc in china on this basis a systematic analysis has been conducted on the disadvantages of renewable energy development policy on the point of long term effective system for renewable energy development a series of policy advice has been offered such as strengthening the policy coordination enhancing regional policy innovation echoing with clean development mechanism implementing process management constructing market investment and financing system it is expected that the above advices could be helpful to ever improvement of renewable energy development policy c 2007 elsevier ltd all rights reserved