schooling inequality and language barriers abstract this article estimates the impact of language barriers on school achievement and the potential ameliorating role of bilingual education using large household data sets from poor rural communities in mexico we find that parental language failure to speak spanish represents an important barrier to the schooling of indigenous children we provide an empirical test suggesting that this largely reflects parental human capital related to culture language rather than unobserved wealth effects using double difference estimators with community fixed effects to address endogenous program placement we demonstrate that schools with bilingual education narrow the gap in the educational performance of children with monolingual mothers versus bilingual and nonindigenous mothers

the role of risk preferences in pay to bid auctions we analyze a new auction format in which bidders pay a fee each time they increase the auction price bidding fees are the primary source of revenue for the seller but produce the same expected revenue as standard auctions assuming risk neutral bidders if risk loving preferences are incorporated in the model expected revenue increases our model predicts a particular distribution of ending prices which we test against observed auction data the degree of fit depends on how unobserved parameters are chosen in particular a slight preference for risk has the biggest impact in explaining auction behavior suggesting that pay to bid auctions are a mild form of gambling this paper was accepted by peter wakker decision analysis

contracting with wealth constrained agents we examine how a project owner optimally selects a project operator and motivates him to deliver an essential noncontractible input e g effort when potential operators are privately informed about their limited wealth truthful revelation of wealth is induced by promising a higher probability of operation and if necessary a greater share of realized profit the larger the nonrefundable bond that a potential operator posts the project owner benefits when total wealth is widely dispersed among potential operators under plausible conditions limited knowledge of wealth is not constraining for the project owner

all pay war we study a model of conflicts and wars in which the outcome is uncertain not because of luck on the battlefield as in standard models but because countries lack information about their opponent in this model expected resource levels and production and military technologies are common knowledge but realized resource levels are private information each country decides how to allocate its resources to production and warfare the country with the stronger military wins and receives aggregate production in equilibrium both comparative and absolute advantages matter a larger resource share is allocated to warfare by the country with a comparative advantage in warfare at relatively low realized resource levels and by the country with an absolute disadvantage in warfare at relatively high realized resource levels from an ex ante perspective the country with a comparative advantage in warfare is more likely to win the war unless its military potential is much lower

language and the earnings of immigrants several studies most of them employing straightforward regression analysis have concluded that immigrants proficiency in the language of their adopted country is correlated with their productivity as measured by earnings two weaknesses of these studies are potential unobserved heterogeneity which could result in over estimated effects if overall ability is linked with language acquisition and potential measurement error in the language proficiency measures which would probably result in under estimation of language effects the present study which uses panel data for a 10 year period in germany yields evidence that the latter bias tends to be much larger than the former implying that language proficiency is far more important than suggested by the existing literature

nonparametric bounds on the returns to language skills this paper applies the theoretical literature on nonparametric bounds on treatment effects to the estimation of how limited english proficiency lep affects wages and employment opportunities for hispanic workers in the united states i analyse the identifying power of several weak assumptions on treatment response and selection and stress the interactions between lep and education occupation and immigration status i show that the combination of two weak but credible assumptions provides informative upper bounds on the returns to language skills for certain subgroups of the population adding age at arrival as a monotone instrumental variable also provides informative lower bounds copyright 2005 john wiley sons ltd

state english only policies and english language investments many states in the us have considered adopting english only legislation since the early 1980s this paper argues that this legislation has a variety of expected and unexpected outcomes using the 1980 and 1990 integrated public use microdata series ipums this study finds that asian immigrants in general and hispanic immigrants who arrived to the us prior to 1970 acquired more english fluency on average during the 1980s when residing in states that passed english only eo legislation compared to their similar peers the passage of such legislation also appears to have distorted residence decisions as well as the relative quality of immigrants between eo and non eo states

the economic integration of forced migrants evidence for post war germany the flight and expulsion of germans from eastern europe after world war ii constitutes one of the largest forced population movements in history we analyse the economic integration of these migrants and their offspring in west germany a quarter century after displacement first generation migrants still tend to fare worse economically displaced agricultural workers however exhibit higher incomes than comparable natives as displacement caused large scale transitions out of low paid agriculture differences in economic outcomes of second generation migrants resemble those of the first generation

using contests to allocate pollution rights in this paper we advocate a new initial allocation mechanism for a tradable pollution permit market we outline a permit allocation contest pac that distributes permits to firms based on their rank relative to other firms this ranking is achieved by ordering firms based on an observable external action where the external action is an activity or characteristic of the firm that is independent of their choice of emissions in the tradable permit market we argue that this mechanism has a number of benefits over auctioning and grandfathering using this mechanism efficiently distributes permits allows for the attainment of a secondary policy objective and has the potential to be more politically appealing than existing alternatives

returns to foreign languages of native workers in the european union most of the literature on returns to languages is concerned with immigrants the authors study which uses the european community household panel survey for the period 1994 2001 infers returns to non native languages by native workers in nine countries of the european union the study differs from other studies that deal with the same issue in three respects first instead of using a dummy for each language they use the ratio of the population not proficient in a given country s national language and compare the results with the more traditional approach using dummies second they correct for time independent measurement errors in self reporting and find that the resulting iv estimates are much larger than those obtained by ols they also suggest that there is little room for time persistent errors and heterogeneity and that therefore their estimates should suffer ostensibly little from unobserved ability biases finally they estimate iv quantile regressions to illustrate how returns to languages vary at different points of the distribution of earnings

the impact of language ability on employment and earnings of britain s ethnic communities the fourth national survey of ethnic minorities contains useful information about the language ability of britain s non whites as well as a wealth of comparative information for whites the paper attempts to establish how much of the lower unemployment and higher earnings enjoyed by whites is the result of a comparative advantage in language language is shown to contribute to a part of the non white disadvantage but after language effects are removed non whites males still have higher unemployment rates and lower earnings language disadvantage among non white females leads to higher inactivity rates rather than more unemployment

bid costs and endogenous bid caps we study contests where several privately informed agents bid for a price all bidders bear a cost of bidding that is an increasing function of their bids and moreover bids may be capped we show that regardless of the number of bidders if agents have linear or concave cost functions then setting a bid cap is not profitable for a designer who wishes to maximize the average bid on the other hand if agents have convex cost functions i e an increasing marginal cost then affectively capping the bids is profitable for a designer facing a sufficiently large number of bidders

two player asymmetric contests with ratio form contest success functions i examine players equilibrium effort levels in two player asymmetric contests with ratio form contest success functions i first characterize the nash equilibrium of the simultaneous move game i show that the equilibrium effort ratio is equal to the valuation ratio and that the prize dissipation ratios for the players are the same i also show that the prize dissipation ratio for each player is less than or equal to the minimum of the players probabilities of winning at the nash equilibrium and thus never exceeds a half then i examine how the equilibrium effort ratio the prize dissipation ratios and the players equilibrium effort levels respond when the players valuations for the prize or their abilities change jel d72 c72 i introduction a contest is a situation in which players compete with one another by expending irreversible effort to win a prize typical examples are various types of rent seeking contests competition among firms to win a monopoly rent secured under government protection or by a government procurement contract competition between domestic and foreign firms to obtain governmental trade policies favorable to them competition among firms to acquire a rent generated by rights of ownership to an import quota and competition among firms to capture rents created by governmental decisions to establish tariffs or other trade barriers other examples of contests include auctions patent races research and development r d competition among firms litigation competition for jobs among job candidates competition among candidates to win promotion to higher ranks election campaigns between political candidates and competition between local governments to invite business firms government institutions or government owned corporations into their districts naturally due to their prevalence and importance in economies such contests have been studied by many economists loury 1979 lee and wilde 1980 tullock 1980 rogerson 1982 rosen 1986 appelbaum and katz 1987 dixit 1987 hillman and riley 1989 hirshleifer 1989 ellingsen 1991 nitzan 1991 1994 krishna and morgan 1997 che and gale 1998 hurley and shogren 1998 and konrad 2000 to name a few in this vast literature on the theory of contests one of the main issues is how much effort do the players exert in pursuit of the prize indeed it is of great interest because the players effort levels determine the profitability of the players engaging in the contest and in some cases they are revenues collected by the contest organizer or bribes given to government officials furthermore they account for other important outcomes of the contest for example in a rent seeking contest efforts expended by the players are viewed as social costs due to rent seeking activities so that total effort level is a measure of economic efficiency in an r d contest effort levels expended by the players these are r d expenditures of the firms determine the expected date of invention this article also addresses the issue how much effort do the players exert in pursuit of the prize but it differs from previous research by dealing with contests with ratio form contest success functions 1 specifically the novelty of this article is to consider two player asymmetric contests in which each player s probability of winning is a function of the ratio of the two players effort levels two player contests with ratio form contest success functions or two player contests that can be best modeled with ratio form contest success functions are easily observed in the real world examples include various types of two player rent seeking contests litigation between a plaintiff and a defendant election campaigns between two parties or candidates and r d competition between two firms consider for example a rent seeking contest in which two firms potential monopolists compete with each other to win a government monopoly franchise contract

selection of entrepreneurs in the venture capital industry an asymptotic analysis we study a model of entrepreneurs who compete in an auction like setting for venture capital vc funding in a setting where limited capital dictates that the vc can only finance the best entrepreneurs with asymmetric information vcs can only assess entrepreneurs by the progress of development which in equilibrium reveals the quality of the new technology using an asymptotic analysis we prove that in attractive industries having a large number of entrepreneurs competing for vc funding could lead to underinvestment in technology by entrepreneurs as the effort exerted by losing entrepreneurs is wasted the study then proceeds to characterize the conditions under which a greater number of competing entrepreneurs is better the model also demonstrates that vcs could possibly increase their payoff by concentrating on a single industry in addition the study also provides some insights on the effects of multiple investments by vcs and the effects of competition among vcs on the same investments

assimilation patterns in cities abstract do ethnic minority individuals assimilate to the majority s norm or reject it by trading off higher productivity and wages with a greater social distance to their culture of origin we develop a model in which oppositional ethnic minority individuals reside in more segregated areas have worse outcomes in terms of income but are not necessarily worse off in terms of welfare than assimilated ethnic minority individuals who live in less segregated areas a policy that reduces transportation cost decreases rather than increases assimilation in cities when there are more productivity spillovers between the two groups ethnic minority individuals are more likely not to assimilate and to reject the majority s norm finally we show that ethnic minority individuals tend to assimilate more in bigger and more expensive cities

the earnings of male immigrants in england evidence from the quarterly lfs in this paper we estimate earnings functions for native born and foreign born white and non white males in the english labour market using data from the quarterly labour force survey our results highlight the importance of distinguishing between native born and foreign born males when investigating the labour market experience of ethnic minorities furthermore the earnings performance amongst white immigrants varies considerably

the influence of entrepreneur s personal characteristics on mses growth through innovation abstractresearch in the separate areas of innovation and growth has considerably intensified in recent years however little scholarly attention has been paid to the entrepreneurs personal characteristics that might explain the growth of micro and small enterprises mses through innovation this study examines the key entrepreneurs personal characteristics affecting micro and small enterprises mses upgrading defined here as substantial growth through innovation six major determining types of entrepreneurs characteristics were identified from the innovation and the growth literature education work experience gender motivations nationality and age the empirical results which are based on t tests of the differences between upgraders and non upgraders the linear probability model and the logit model all suggest that work experience and motivations are cornerstones in the likelihood that an mse will upgrade the policy implications of this study on promoting mses upgrading are also discussed

the effect of literacy on immigrant earnings we examine the impact of literacy on immigrant earnings and the sources of lower returns to education and experience among immigrants we find that the native born literacy distribution dominates that for immigrants however the two groups obtain similar returns to literacy skills contrary to discrimination based explanations for immigrant native born earnings differentials among the university educated literacy differences account for about two thirds of the earnings gap however low returns to foreign experience have a larger impact on this differential among the less educated literacy differences and differences in the returns to experience have similar effects on the earnings differential

language training language proficiency and earnings of immigrants in norway this paper uses a simple probit model to determine the impact of language training on the language proficiency of third world immigrant men in norway it also estimates the labour market returns to norwegian language proficiency the results show that immigrants who participate in language training programme are more likely to acquire speaking and reading proficiencies in norwegian language than those who do not contrary to expectation language proficiency has no significant effect on immigrants earnings a probable explanation may be that immigrants need norwegian language proficiency to get into jobs in the norwegian labour market once they are in employment their wages are not necessarily determined by their proficiency in norwegian consistent with the assimilation hypothesis earlier waves of immigrants have higher earnings than do more recent waves and part of the initial earnings deficit experienced by more recent immigrants can be attributed to language deficiency there was no evidence of s

defying the law of gravity the political economy of international migration bilateral flows of international migrants exhibit tremendous variance both across destination countries and over time to explain this variance studies of international migration tend to focus on economic determinants such as income differentials or on social conditions such as the presence of coethnics in certain destination countries the authors argue that migration is driven not solely by economic or social determinants rather the political environment across destinations plays a substantively large role in influencing bilateral migration flows they test the importance of the political environment citizenship rights and the prominence of right wing parties using data on migration flows from 178 origin countries into 18 destination countries over the period 1980 2006 they find even after controlling for a variety of economic social policy and international variables that variation in political environments across time and destination plays a key role in observed patterns of international migration

intermarriage and the economic assimilation of immigrants this article investigates the assimilation role of intermarriage between immigrants and natives intermarried immigrants earn significantly higher incomes than endogamously married immigrants even after we take account of human capital endowments and endogeneity of intermarriage the premium does not appear to be a reward for unobservable individual characteristics natives who intermarry do not receive this premium nor do immigrants who intermarry into another ethnic group the premium is mainly attributable to a faster speed of assimilation rather than any difference in labor market quality between intermarried and nonintermarried immigrants at the point of arrival

language and urban labor market segmentation theory and evidence abstract i propose a language theory of labor market segmentation people of different language origins form separate urban labor submarkets and can switch between submarkets two types of wage differentials emerge namely the within labor market wage gap and the within language group wage gap the average wage in each market and a worker s choice of the labor market depend on the population sizes of the relevant groups these implications are tested using the 2001 census of canada public use microdata a unique feature of these data is the reported work language which helps me to identify labor market segments the empirical evidence supports my theory

understanding the native immigrant wage gap using matched employer employee data evidence from germany in this article the author proposes a new method for measuring wage discrimination that builds on the methodology first developed by hellerstein and neumark 1999 the author s method has three m

optimal prize rationing strategy in all pay contests with incomplete information abstract a contest organizer e g a government regulatory agency is endowed with the capacity to provide unlimited homogeneous prizes e g medals that he can use to incentivize contestants to exert productive effort in an all pay auction with incomplete information each agent at most wins one prize we study the optimal number of prizes the organizer should grant in order to induce maximal expected total effort or expected highest effort from agents both are single peaked under mild regularity conditions when players abilities follow a family of beta distributions expected highest effort maximization requires a smaller set of prizes to be awarded for both goals the optimal number of prizes weakly increases when the pool of contestants expands or contestant quality improves

ethnic enclaves and immigrant labor market outcomes quasi experimental evidence i examine the effects of the ethnic enclave size on labor market outcomes of immigrants i account for ability sorting into enclaves by exploiting a danish spatial dispersal policy under which refugees were randomly dispersed across locations first i find strong evidence that refugees with unfavorable unobserved characteristics self select into ethnic enclaves second a relative standard deviation increase in the ethnic enclave size increases annual earnings by 18 on average irrespective of skill level third further findings are consistent with the explanation that ethnic networks disseminate job information which increases the job worker match quality and thereby the hourly wage rate

auctions in which losers set the price we study auctions of a single asset among symmetric bidders with affiliated values we show that the second price auction minimizes revenue among all efficient auction mechanisms in which only the winner pays and the price only depends on the losers bids in particular we show that the k th price auction generates higher revenue than the second price auction for all k 2 if rationing is allowed with shares of the asset rationed among the t highest bidders then the t 1 st price auction yields the lowest revenue among all auctions with rationing in which only the winners pay and the unit price only depends on the losers bids finally we compute bidding functions and revenue of the k th price auction with and without rationing for an illustrative example much used in the experimental literature to study first price second price and english auctions

willingness to pay for gains and losses in visibility and health two different willingness to pay responses are compared willingness to pay to avoid loss of air quality and willingness to pay to obtain gains in air quality contingent valuation data were used to estimate bid functions for these two types of responses for visibility and health comparison of the estimated models indicates that in addition to magnitude differences gains and losses for visibility and health are affected differently by health status risk perceptions and other risk related variables results for the loss measure are more reliable in terms of variability of response and econometric modeling

a symmetric two player all pay contest with correlated information we construct both monotonic and non monotonic symmetric bayesian nash equilibria for a two player all pay contest with binary types and correlated information structures we also employ a class of parametric distributions to illustrate our equilibrium construction explicitly and to derive some comparative statics results

the max min group contest weakest link group all pay auction we investigate a group all pay auction in which each group s effort is represented by the minimum among the effort levels exerted by the group members and the prize is a group specific public good we fully characterize the symmetric equilibria for two groups there are four types of equilibria the pure strategy equilibria in which all active players exert the same effort the semi pure strategy equilibria in which the players in a group play the same pure strategy whereas those in the other group play the same mixed strategy the nondegenerate mixed strategy equilibria with continuous support and the nondegenerate mixed strategy equilibria with discontinuous support we then analyze a general contest with n groups

the endogeneity between language and earnings international analyses this study is concerned with the determinants of dominant language fluency its effects on earnings and its endogeneity with earnings among immigrants dominant language fluency is hypothesized to

industrialization and bilingualism in india bilingualism is a distinct and important form of human capital in linguistically diverse countries when communication among workers increases productivity there can be economic incentives to learn a second language i study how the growth of industrial employment increased bilingualism in india between 1931 and 1961 during that period indian factories were linguistically mixed i exploit industrial clustering and sectoral demand growth for identification the effect on bilingualism was strongest in import competing districts and among local linguistic minorities bilingualism was mainly the result of learning rather than than migration or assimilation and was not a byproduct of becoming literate my results shed new light on human capital investment in developing economies and on the long run evolution of languages and cultures

a theory of exit in duopoly we develop a duopoly model in which exit occurs because of the existence of fixed costs or opportunity costs each firm enters the market knowing its own cost but not that of its opponent as times goes on each firm becomes increasingly pessimistic about the cost of its remaining rival the time of exit is the only strategic variable so that our model is a war of attrition in contrast to the classic war of attrition however we assume that with positive probability each firm s costs may be low enough that staying in forever is a dominant strategy thus our model unlike the classic one has a unique equilibrium

how not to raise money we show that standard winner pay auctions are inept fund raising mechanisms because of the positive externality bidders forgo if they top another s high bid revenues are suppressed as a result and remain finite even when bidders value a dollar donated the same as a dollar kept this problem does not occur in lotteries and all pay auctions where bidders pay irrespective of whether they win we introduce a general class of all pay auctions rank their revenues and illustrate how they dominate lotteries and winner pay formats the optimal fund raising mechanism is an all pay auction augmented with an entry fee and reserve price

native language spoken language translation and trade we construct new series for common native language and common spoken language for 195 countries which we use together with series for common official language and linguistic proximity in order to draw inferences about 1 the aggregate impact of all linguistic factors on bilateral trade 2 the separate role of ease of communication as distinct from ethnicity and trust and 3 the contribution of translation and interpreters to ease of communication the results show that the impact of linguistic factors all together is at least twice as great as the usual dummy variable for common language resting on official language would say in addition ease of communication plays a distinct role apart from ethnicity and trust and so far as ease of communication enters translation and interpreters are significant finally emigrants have much to do with the role of ethnicity and trust in linguistic influence

language fluency and earnings estimation with misclassified language indicators we use panel data to analyze the determinants of speaking fluency and wages of immigrants our model takes account of two problems that may bias ols estimates of the impact of speaking fluency on earnings first subjective variables on an ordinal discrete scale such as self reported language ability can suffer from misclassification errors the model decomposes misclassification errors into a time persistent and a time varying component second the model accounts for correlated unobserved heterogeneity in language and earnings equation the main finding is that these two generalizations of the standard model both lead to substantial changes in the estimated effect of speaking fluency on earnings

uniqueness and existence of equilibrium in auctions with a reserve price abstract we prove existence and uniqueness of equilibrium for a general class of two player bidding games we apply our results to the first price auction the combination of first and second price auctions the war of attrition the all pay auction as well as combinations of the latter two auction forms we also treat the first price auction without risk neutrality our results deal with the asymmetric affiliated common values environment in the case where signals are independent our results apply to all equilibria when signals are not independent our uniqueness results hold in the class of nondecreasing strategy equilibria journal of economic literature classification number d44

the sunk cost fallacy in penny auctions this article theoretically and empirically analyses behaviour in penny auctions a relatively new auction mechanism as in the us dollars or war of attrition players in penny auctions commit higher non refundable costs as the auction continues and only win if all other players stop bidding i first show that in any equilibria that does not end immediately players bid probabilistically such that the expected profit from every bid is zero then using two large data sets covering 166 000 auctions i calculate that average profit margins actually exceed 50 to explain this deviation i incorporate a sunk cost fallacy into the theoretical model to generate a set of predictions about hazard rates and player behaviour which i confirm empirically while players do slowly learn to correct this bias and there are few obvious barriers to competition activity in the market is rising and concentration remains relatively high

english proficiency and labor market performance evidence from the economics profession this article investigates whether the global spread of the english language provides an inherent advantage to native english speakers this question is studied within the context of the economics profession where the impact of being a native english speaker on future publishing success is examined english speakers may have an advantage because they are writing in their native language the quality of writing is a crucial determinant of publishing success and all the top economics journals are published in english using a ranking of the world s top 2 5 of economists this article confirms that native english speakers are ranked 100 spots higher better than similar non native english speakers a variety of extensions examine and dispel many other potential explanations jel a11 j44 f66

learn english not the local language ethnic russians in the baltic states this paper analyzes the return to dominant language fluency for ethnic russians in the baltic states we look at male workers using estonian labor force survey for years 2000 2010 and the 1998 wave of a panel of high school graduates of 1982 the results indicate that the ethnic russian men enjoy little income premium on their skills of the dominant language we identify positive returns only in the low end of the income distribution and in public administration sector surprisingly the returns to english fluency are far larger these outcomes point toward segregation and discrimination at the upper end hiring

rigging the lobbying process an application of the all pay auction textabstractin a world where a politician can explicitly auction off a prize to the high bidder the standard auction literature can be used to analyse political behavior the justice system however precludes politicians from explicitly selling the prize to the highest bidder thus politicians cannot let it become public knowledge that they are in the business of selling political favors an institution has emerged in political markets to overcome this constraint which are termed as lobbying lobbyists make implicit payments to the politician through campaign contributions if these up front payments were rebated to those failing to receive the prize it would be clear that the politician was selling favors this article has examined an interesting principle arising in all pay auctions this principle states that a politician wishing to maximize political rents may find it in his best interest to exclude certain lobbyists from participating in the lobbying process particularly lobbyists valuing most the political prize

asymmetric all pay auctions with interdependent valuations abstract i show that a unique equilibrium exists in an asymmetric two player all pay auction with a discrete signal structure correlated signals and interdependent valuations the proof is constructive and the construction can be implemented as a computer program and be used to derive comparative statics i also characterize the set of equilibria when a reserve price is introduced

literacy and labour market outcomes self assessment versus test score measures this paper looks at the determinants of literacy and the relation between literacy and labour market outcomes while focusing on comparisons of self assessment versus test score measures of literacy the test score measure performs considerably better than the self assessments when literacy is treated as an outcome variable in terms of the overall fit of the model and the specific coefficient estimates with the self assessments sometimes actually generating wrongly signed parameters the test score measure also performs much better as an explanatory variable in the employment models with the self assessment variable generating significant underestimates of the effects of literacy on the probability of being employed finally the test score is also superior in the income models although the self assessment measure is at least a reasonably good performer in this regard suggesting that the main results reported in much of the existing literature based on such measures should perhaps be taken as good re

sequential correlated equilibria in stopping games in many situations such as trade in stock exchanges agents have many opportunities to act within a short interval of time the agents in such situations can often coordinate their actions in advance but coordination during the game consumes too much time an equilibrium in such situations has to be sequential in order to handle mistakes made by players in this paper we present a new solution concept for infinite horizon dynamic games which is appropriate for such situations a sequential normal form correlated approximate equilibrium under additional assumptions we show that every such game admits this kind of equilibrium

human capital spillovers in families do parents learn from or lean on their children i model how children s acquisition of a given form of human capital incentivizes adults in their household to either learn from them if children can teach the skill to adults adults cost of learning falls or lean on them if children s human capital substitutes for that of adults in household production adults benefit from learning falls using variation in compliance with an english immersion mandate in california schools i find that english instruction improved immigrant children s english proficiency but discouraged adults living with them from acquiring the language whether family members learn or lean affects the externalities associated with education policies

all pay auctions with a buy price option all pay auctions this paper studies all pay auctions in which there is a buy price option for bidders to guarantee purchases at a seller specified price we analyze symmetric increasing bidding equilibria in the first and second price all pay auctions with the buy price option while the optimal buy price in the second price is higher than are those in the first price all pay auction both formats maintain the same expected profit with an endogenous entry process all pay auctions with the buy price can attract more consumers and ultimately reach a higher expected profit than does the uniform posted price selling mechanism jel d44 l11 l81

brain drain in developing countries an original data set on international migration by educational attainment for 1990 and 2000 is used to analyze the determinants of brain drain from developing countries the analysis starts with a simple decomposition of the brain drain in two multiplicative components the degree of openness of sending countries measured by the average emigration rate and the schooling gap measured by the education level of emigrants compared with natives regression models are used to identify the determinants of these components and explain cross country differences in the migration of skilled workers unsurprisingly the brain drain is strong in small countries that are close to major organization for economic co operation and development oecd regions that share colonial links with oecd countries and that send most of their migrants to countries with quality selective immigration programs interestingly the brain drain increases with political instability and the degree of fractionalization at origin and decreases with natives human capital

returns to foreign languages of native workers in the eu most papers on returns to languages are concerned with immigrants we use the european community household panel survey echp to infer returns on non native languages by non immigrants in nine countries of the european union we differ from the few other studies that deal with the same problem in three respects first we correct for time dependent measurement errors in self reporting as suggested by dustmann and van soest and find that the resulting iv estimates are much larger than those obtained by ols we also suggest that there is little room for time persistent errors and heterogeneity and that therefore our estimates should not suffer from the other usual biases secondly instead of using a dummy for each language we use the ratio of the population that is not proficient in a language in each country considered finally we estimate instrumental variable quantile regressions to illustrate how returns to languages vary at different points of the distribution of earnings

registered nurses and the value of bilingualism recent research indicates that markets do not value bilingual skills these results however are not robust across all labor markets and one notable counter instance is the market for registered

multi stage sequential all pay auctions abstract we study multi stage sequential all pay contests auctions where heterogeneous contestants are privately informed about a parameter ability that affects their cost of effort we characterize the perfect bayesian equilibrium of these contests and analyze the effect of the number of contestants and their types on the contestants expected highest effort

the war of attrition and the revelation of valuable information we provide a simple example demonstrating that the unconditional revelation information in a war of attrition with private budget constraints can decrease expected revenue our example suggests that information non revelation can counteract the adverse revenue impact of budget constraints and almost counterbalance their otherwise negative impact

equilibrium of affiliated value second price auctions with financially constrained bidders the two bidder case we study an affiliated value second price auction with two financially constrained bidders we prove the existence of a symmetric equilibrium under quite general conditions comparative static results are provided journal of economic literature classification number d44

the effect of naturalization on wage growth a panel study of young male immigrants for young male immigrants naturalization facilitates assimilation into the u s labor market following naturalization immigrants gain access to public sector white collar and union jobs and wage growth accelerates consistent with removal of employment barriers the faster wage growth of immigrants who naturalize might alternatively result from greater human capital investment prior to naturalization stemming from a long term commitment to u s labor markets but there is no evidence that wage growth accelerates or the distribution of jobs improves until citizenship is attained finally the gains from naturalization are greater for immigrants from less developed countries and persist when we control for unobserved productivity

education language and youth entrepreneurship in chad this study aims to assess the effect of education language arabic or french on the probability of being self employed in chad mainly we make use of a recursive bivariate probit model and matching techniques to assess the effect as well as to remedy to the endogeneity problem overall the analysis suggests that youths with arabic language education are more likely to be self employed however most of them specialise in modest informal micro enterprises these results can help to shed light on the education language implications and then can help policymakers to design appropriate policies to foster youth entrepreneurship in chad

when are stabilizations delayed alesina drazen revisited abstract in an influential article alesina and drazen 1991 why are stabilizations delayed american economic review 81 1170 1188 model delay of stabilization as the result of a struggle between political groups supporting reform plans with different distributional implications in this paper we show that ex ante asymmetries in the costs of delay for the groups will reduce the probability of conflict and will lead to a shorter expected delay accurate common information about the cost of delay may lead to no delay at all in an asymmetric conflict a wider divergence in the distributional implications of reform will reduce the probability of conflict but will lead to a longer expected delay we motivate the asymmetric model of delay by reference to latin american episodes of the 1980s

the effect of language training on immigrants economic integration empirical evidence from france abstract we examine the impact of language training on the economic integration of immigrants in france the assignment to this training offered by the french ministry of the interior depends mainly on a precise rule the training is provided if the test score of an initial language exam is below a certain threshold this eligibility rule creates a discontinuity in the relation between the test result and the variables of interest which is used to estimate the causal effect of language training through the method of regression discontinuity design we find that the number of assigned hours of training significantly increases labor force participation of the treated individuals the language classes appear to have a larger effect for individuals with higher levels of education while there is no robust differential effect by type of migration gender or age our estimated coefficients are remarkably similar when we rely on local linear regressions using the optimal bandwidth with few observations around the threshold and when we control parametrically for a polynomial of the forcing variable and use the whole estimation sample we conclude with a discussion of the candidate mechanisms for the improved labor market participation of immigrants

gender earnings and the english skill acquisition of hispanic workers in the united states i introduction recently the number of english deficient residents has escalated in the united states according to the 1980 and 1990 decennial censuses individuals aged five years and older whose reported english verbal skills are not well or not at all rose from 4 22 million 2 of the population to 6 67 million 3 this percentage is more pronounced in the public schools according to han et al 1997 over 2 12 million students 5 1 of the 41 62 million public school students in grades k 12 were identified as being limited english proficient lep in the 1993 1994 school year other estimates such as those made by henderson abbott and strang 1993 put the public school lep share at over 6 increases in the lep numbers mirror the growth in the immigrant population as well as the relatively high fertility rates of language minority americans the hispanic and asian pacific islander ethnic groups account for much of this growth as shown by the national research council 1997 hispanics in fact are projected by the u s census bureau 1996 to become this nation s largest racial ethnic minority group in less than a decade policywise the growing lep population raises economic and social questions concerning for example the best schooling programs for children in this group as well as the impact of english proficiency in labor markets answers to some of these questions clearly require detailed and inclusive analyses 1 indeed many social scientists have linked the ability to communicate in english to labor market value and occupational selection 2 the bulk of this research however primarily focuses on men less is known on whether gender differently affects the english proficiency outcomes of language minorities researchers in other social science fields such as stevens 1985 1986 1992 cameron 1992 and ellis 1994 have considered gender disparities with respect to the acquisition of english skills 3 however these investigations have not fully implemented some of the empirical advances made by economists to analyze english proficiency moreover this extant work tends to focus solely on gender related english skill differentials at a single point in time in this study we use recent empirical strategies in the economics field to analyze labor market facets associated with the english skill acquisition of hispanic men and women we also employ a two period analysis that allows us to observe whether gender differences in the accumulation of english skills exist with respect to our previous discussion such knowledge facilitates the design of programs aimed at improving the english fluency of the lep population in particular we first track synthetic cohorts to investigate if the english proficiency acquisition made by hispanic workers during the 1980s varies with respect to gender we then test whether poor english skills differently affect the earnings and occupational sorting of hispanic men and women the 1 1980 and 1990 public use microdata samples pums are utilized in these labor market analyses our findings suggest that english skill procurement varies between hispanic men and women depending on age and schooling location we also find that women face a lower english deficiency earnings penalty that rises more rapidly with education than the penalty obtained by their otherwise similar male peers our occupational selection results parallel this penalty difference where english skills serve as a stronger sorting mechanism for hispanic women than men policy prescriptions from such analyses suggest that male oriented studies overestimate the earnings gains and understate the occupational sorting associated with acquiring english fluency ii english skill acquisition in the labor market our first objective tests whether women acquire english proficiency at a different rate than their male peers all of our empirical work relies on the 1 pums of the 1980 and 1990 u

ethnic concentration and language fluency of immigrants evidence from the guest worker placement in germany this paper analyses the impact of regional ethnic concentration on the language proficiency and language use of immigrants it solves the endogeneity of immigrants location choices by exploiting a peculiar episode of the german immigration history the exogenous placement of guest workers after wwii one of the largest guest worker programs on record the econometric approach accounts for several sources of measurement error and provides a falsification exercise that hypothetically relocates the most language proficient immigrants into ethnic enclaves to test the extent of cross regional sorting necessary to render the results purely spurious the results show a robust negative effect of ethnic concentration on immigrants language ability which is driven by differences in contact rates with natives and not by differences in the willingness to integrate the paper discusses these findings against the background of a language production function and in the light of feasible policy options to foster the language acquisition of immigrants

a decentralized market with common values uncertainty non steady states we analyse a market where i trade proceeds by random and anonymous pairwise meetings with bargaining ii agents are asymmetrically informed about the value of the traded good and iii no new entrants are allowed once the market is open we show that information revelation and efficiency never obtain in equilibrium even as discounting is removed this holds whether the asymmetry is two sided or one sided in some cases there exist equilibria where a substantial amount goes untraded this contrasts with the earlier literature which was based on the steadystate equilibria of a model where agents enter the market every period

caps in sequential contests i introduction in many competitions we can often observe situations where severe constraints are imposed on contestants for example in the u s electoral campaign there is a specific maximum campaign contribution that a single agent can make to a candidate 1 in sports where equipment plays a major role e g sailing motor races etc explicit or implicit technological constraints are imposed on the allowed equipment also several sports leagues e g the national basketball association nba implement a salary cap which places a limit on the total amount of money a team can spend on players salaries salary caps are clearly binding and teams are sometimes forced to trade expensive players in order to make place for other needed team members the usual reason for applying salary caps is that they facilitate even competition between small and large city teams otherwise large city teams could pay more buy the best talent and ultimately destroy any semblance of competition in the league the goal of caps imposed by designers of competitions is to create what we call a competitive balance so that many players have a chance to win and not necessarily the strongest ones in addition if the contest is more competitively balanced the uncertainty of the outcome is higher and therefore the contest is more attractive furthermore competitive balance may lead to an improvement of the expected total performance of all the players rather than just the performance of the top player several other ways have been suggested to enhance the competitive balance in contests for example baye kovenock and de vries 1993 showed that in all pay auctions contests by excluding the strongest player the player with the highest value of winning the contest becomes more competitively balanced and then the players expected total bid may increase moldovanu and sela 2001 found that in all pay auctions under incomplete information when cost functions are convex several positive prizes may be optimal for a designer who wishes to maximize the expected total bid in other words by increasing the number of the prizes the chances of the players with relatively low values of winning to win one of the prizes increase and therefore these players will increase their efforts accordingly cohen kaplan and sela 2008 studied all pay auctions with effort dependent rewards under incomplete information and demonstrated that when the designer maximizes the total bid effort and when there is a sufficiently large number of contestants the optimal reward decreases in the contestants bid this means that a designer will offer higher prizes to the players with relatively low values of winning those who exert lower efforts than to the players with relatively high values of winning those who exert higher efforts such a distribution of prizes balances the bids submitted by the players with high and low values of winning we focus here on the role of bid caps to enhance the competitive balance in contests relatively weak players players with low abilities or low values of winning usually exert low efforts which are lower than the level of the bid cap imposed by a designer in a contest with a bid cap if these players exert an effort that is equal to the bid cap they will have a higher chance to win since no one can exert a higher effort than the bid cap thus the weak players exert more effort than they would in a contest without a bid cap however relatively strong players players with high abilities or high values of winning usually exert higher efforts than the level of the bid cap thus the strong players exert less effort than they would in a contest without a bid cap hence the effect of the bid cap on the players total effort depends on the trade off between the increase of the weaker players efforts and the decrease of the stronger players efforts to be fully effective the bid cap system must guarantee that as many players as possible raise their efforts to the level of the bid cap and as less as possible reduce their efforts to this level

the generalized war of attrition abstract we model a war of attrition with n k firms competing for n prizes in a natural oligopoly context the k 1 lowest value firms drop out instantaneously even though each firm s value is private information to itself in a standard setting context in which every competitor suffers losses until a standard is chosen even after giving up on its own preferred alternative each firm s exit time is independent both of k and of other players actions our results explain how long it takes to form a winning coalition in politics solving the model is facilitated by the revenue equivalence theorem jel d43 d44 l13 o30

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

integrating immigrants the impact of restructuring active labor market programs we examine the impact of restructuring active labor market programs for unemployed immigrants in finland exploiting a discontinuity in the phase in rules of the reform we find that it increased c

pareto improving immigration in an economy with equilibrium unemployment economists from around the industrialized world demonstrate the strength of both theories about the rise of economic inequality that is it the mechanical consequence of changes in such economic fundamentals as technology and demographic parameters and that it is the contingent consequence country specific and time specific changes in institutions they find that though institutions always play a crucial role in shaping inequality and sometimes preventing it still it creeps in

temporary migration human capital and language fluency of migrants this paper investigates human capital investment of immigrants whose duration in the host country is limited either by contract or by their own choice the first part of the paper develops a model which distinguishes between temporary migrations where the return time is exogenous or optimally chosen the analysis has a number of interesting implications for empirical work some of which are explored in the second part of the paper the analysis focuses on language capital and tests the hypothesis that country specific human capital investments are sensitive to the duration in the host country s labour market the results show that the acquisition of language capital is sensitive to the intended duration in the host country

contests with three or more heterogeneous agents abstract we study monotone equilibrium behavior in contests with observable effort bid where three or more participants have distinct risk attitudes and the monetary value for the prize of each is drawn independently from a distinct distribution these differences can either cause a player to drop out that is always choose zero effort regardless of his valuation or use all or nothing strategies with discontinuous effort choice neither complete drop out nor discontinuous bidding with finitely many gaps is consistent with pure strategy monotone bayesian nash equilibrium in a contest with either ex ante identical players or only two distinct participants

the effects of official english laws on limited english proficient workers workers with limited english skills may suffer adverse effects when states declare english the official language if employers believe official english laws allow or require them to adopt workplace english only rules that lower the demand for limited english proficient workers such laws may harm individuals who do not speak english well using data from the 1980 and 1990 censuses i estimate whether the earnings of limited english proficient workers who live in states that adopted official english laws declined relative to other workers the results suggest a substantial decline in the annual earnings of men with limited english proficiency

full extraction of the surplus in bayesian and dominant strategy auctions we consider auctions for a single indivisible object in the case where the bidders have information about each other which is not available to the seller we show that the seller can use this information to his own benefit and we completely characterize the environ ments in which a well chosen auction gives him the same expected payoff as that obtainable were he able to sell the object with full information about each bidder s willingness to pay we provide this characterization for auctions in which the bidders have dominant strate gies and for those where the relevant equilibrium concept is bayesian nash in both set ups the existence of these auctions hinges on the possibility of constructing lotteries with the correct properties we consider the situation in which an agent the seller possesses one indivisible unit of a good to which he attaches no value but the good has value to a number of potential buyers and its transfer to one of them would increase social welfare in particular the transfer to the buyer with the highest valuation maximizes social welfare in this paper we completely characterize environments in which the seller can design an auction that will enable him to capture for himself the full increase in social welfare induced by the transfer of the good to the bidder with the highest willingness to pay if the seller had full information about the reservation prices of potential buyers his optimal selling strategy would be very simple he would announce a price equal or very close to the highest reservation value the optimal strategy for the bidder with the highest evaluation would be to accept the offer note that we are treating a situation in which the seller can commit himself to a price as a result of the exchange the utility of the seller increases by the full amount of the increase in social welfare and he has been able to fully extract the surplus in many circumstances however a seller has only imperfect knowledge of the buyers willingnesses to pay in this case he must find some mechanism or auction which will enable him to maximize his benefit from the sale of the object the auction literature starts with this observation and shows how the seller can by an astute choice of auction extract the largest possible fraction of the surplus in general the literature has shown that this proportion is strictly less than one in some circumstances the bidders will have information about each other which is not available to the seller for instance in auctions for petroleum drilling rights bidders know the results of geological tests which they have

labour market discrimination against indigenous people in peru in this article the component of the gross wage differential that can be explained by productivity enhancing attributes and that which is due to unexplained factors and labour market discrimination are empirically determined individual data from the 1991 living standards measurements survey of peru are used to analyse labour market earnings and to decompose the gross earnings differential a large portion of the indigenous non indigenous wage gap is unexplained by human capital and other observable differences

bidding for a group specific public good prize abstract we examine the equilibrium effort levels of individual players and groups in a contest in which two groups compete with each other to win a group specific public good prize the players choose their effort levels simultaneously and independently and the winning group is determined by the selection rule of all pay auctions we first prove nonexistence of a pure strategy nash equilibrium and then construct a mixed strategy nash equilibrium at the nash equilibrium the only active player in each group is a player whose valuation for the prize is the highest in that group all the other players expend zero effort and the equilibrium effort levels depend solely on two values the highest valuation for the prize in each group

brain drain from turkey an investigation of students return intentions the emigration of skilled individuals from turkey attracted greater media attention and the interest of policymakers in turkey particularly after the experience of recurrent economic crises that have led to an increase in unemployment among the highly educated young this study estimates a model of return intentions using a data set compiled from an internet survey of turkish students residing abroad the findings of this study indicate that as expected higher salaries offered in the host country and lifestyle preferences including a more organized environment in the host country increase the probability of student nonreturn however the analysis also points to the importance of prior return intentions and the role of the family in the decision to return to turkey or stay overseas it is also found that the compulsory service requirement attached to government scholarships increases the probability of student return turkish student association membership also increases return intentions longer sta

community cohesion and assimilation equilibria abstract we study the assimilation behavior of a group of migrants who live in a city populated by native inhabitants we conceptualize the group as a community and the city as a social space assimilation increases the productivity of migrants and consequently their earnings however assimilation also brings the migrants closer in social space to the richer native inhabitants this proximity subjects the migrants to relative deprivation we consider a community of migrants whose members are at an equilibrium level of assimilation that was chosen as a result of the maximization of a utility function that has as its arguments income the cost of assimilation effort and a measure of relative deprivation we ask how vulnerable this assimilation equilibrium is to the appearance of a mutant a member of the community who is exogenously endowed with a superior capacity to assimilate if the mutant were to act on his enhanced ability his earnings would be higher than those of his fellow migrants which will expose them to greater relative deprivation we find that the stability of the pre mutation assimilation equilibrium depends on the cohesion of the migrants community expressed as an ability to effectively sanction and discourage the mutant from deviating the equilibrium level of assimilation of a tightly knit community is stable in the sense of not being vulnerable to the appearance of a member becoming better able to assimilate however if the community is loose knit the appearance of a mutant will destabilize the pre mutation assimilation equilibrium and will result in a higher equilibrium level of assimilation

an analysis of the war of attrition and the all pay auction we study the war of attrition and the all pay auction when players signals are affiliated and symmetrically distributed we a find sufficient conditions for the existence of symmetric monotonic equilibrium bidding strategies and b examine the performance of these auction forms in terms of the expected revenue accruing to the seller under our conditions the war of attrition raises greater expected revenue than all other known sealed bid auction forms journal of economic literature classification numbers d44 d82 1997 academic press

all pay auctions with certain and uncertain prizes abstract we study all pay auctions with multiple prizes the players have the same value for all the certain prizes except for one uncertain prize for which each player has a private value we characterize the equilibrium strategy and show that independent of the ranking of the uncertain prize if the uncertain prize is not the lowest one a player s effort as well as his expected payoff increase in his value for the uncertain prize otherwise if this prize is the lowest one we obtain that a player s effort may decrease in his value for the uncertain prize but his expected utility increases

the labor market integration of refugees in the united states do entrepreneurs in the network help we investigate whether entrepreneurs in the network of refugees from the same country of origin help refugees enter the labor market by hiring them we analyze the universe of refugee cases without u s ties who were resettled in the united states between 2005 and 2010 we address threats to identification due to refugees sorting into specific labor markets and to strategic placement by resettlement agencies we find that the probability that refugees are employed 90 days after arrival is positively affected by the number of business owners in their network but negatively affected by the number of those who are employees this suggests that network members who are entrepreneurs hire refugees while network members working as employees compete with them which is consistent with refugees complementing the former and substituting for the latter