government policy under price uncertainty a source of volatility in illegal immigration this paper provides an alternative explanation for why illegal immigration can exhibit substantial volatility we develop a model economy where migrants make decisions in the face of uncertain border enforcement and transfers from the host country the uncertainty is extrinsic a sunspot and arises due to ambiguity regarding government policy the sunspot manifests itself as uncertainty in the commodity price of money immigration volatility stems from both the trade off between the marginal benefits and costs transfers and enforcement to migrating and the existence of a sunspot finally we examine the impact of changes in government policies on migration levels resume politique gouvernementale quand il y a incertitude des prix une source de la volatilite de l immigration illegale ce texte propose une explication de rechange de la volatilite substantielle de l immigration illegale on developpe un modele d economie ou les immigrants prennent leurs decisions sur la base d une appreciation incertaine de la vigueur de la police des frontieres et des transferts qu on peut attendre du pays hote l incertitude est extrinseque comme les taches solaires elle emerge de l ambiguite des politiques publiques la tache solaire se manifeste dans le prix de la monnaie en termes de biens la volatilite de l immigration emerge a la fois de la relation d equivalence entre les avantages et les couts difficultes aux frontieres marginaux a la migration et l existence d une tache solaire a exploiter enfin on examine l impact des changements dans les politiques publiques sur les niveaux d immigration

how efficiently is capital allocated evidence from the knitted garment industry in tirupur this paper studies the effect of community identity on investment behaviour in the knitted garment industry in the south indian town of tirupur we document very large and systematic differences in both levels of capital stock and the capital intensity of production in firms owned by people from two different community groups we argue that the differences in investment cannot be explained by productivity differences alone we suggest that the most likely explanation is that the two communities differ in their access to capital

seasonal migration and agricultural production in vietnam abstract when markets are incomplete migration can have multiple effects on agricultural production i use instrumental variables techniques to explore the effects of seasonal migration on agricultural production in rural vietnam during the 1990s using network variables specific to vietnam as instruments i find that migrant households in north vietnam appear to move out of rice production and into the production of other crops inputs used by migrant households decrease relative to similar non migrant households the evidence is consistent with a shift from labor intensive into land intensive crops rather than productivity changes or the use of additional capital in production

media exposure and internal migration evidence from indonesia abstract this paper investigates the impact of television on internal migration in indonesia we exploit the differential introduction of private television throughout the country and the variation in signal reception due to topography to estimate the causal effect of media exposure our estimates reveal important long and short run effects an increase of one standard deviation in the number of private tv channels received in the area of residence as an adolescent reduces future inter provincial migration by 1 7 2 7 percentage points and all migration inter and intra provincial by 3 9 6 8 percentage points short run effects are similar in magnitude we also show that respondents less exposed to private television are more likely to consider themselves among the poorest groups in society as we discuss in a stylized model of migration choice under imperfect information these findings are consistent with indonesian citizens over estimating the net gains from internal migration when access to television is limited

the impact of migration on food consumption patterns the case of vietnam abstract this paper explores the relationship between migration and consumption patterns using panel data from the 2004 and 2006 vietnam household living standards surveys employing an instrumental variable approach to control for the endogeneity of migration our results indicate that short term migration has a positive effect on overall per capita food expenditures per capita calorie consumption and food diversity long term migration also appears to be positively related to consumption but impacts are often insignificant and of a lesser magnitude than short term migration the results provide no evidence of negative effects of migration and support the view that short term migration is a mechanism by which households maintain food security the results suggest that to improve food security the vietnamese government should enact policies that facilitate short term migration flows as well as the transferring of remittances

the impact of climate change on the labor allocation empirical evidence from china abstract climate change may significantly affect the labor market by generating disproportionate damage to marginal returns to labor across sectors however this potentially important channel through which climate change may affect social welfare has not received the attention it deserves we provide the first estimate of the long term effects of climate change on the labor market based on the hedonic approach which accounts for individual long term adjustments to climate change using a panel of field survey data from 8076 working age residents in 279 rural communities in china we find that a 1 c increase from current mean temperature will reduce an average rural resident s time allocated to farm work by 7 0 increase the time allocated to off farm work by 7 8 and reduce the time allocated to leisure by 0 8 we also find differential responses to climate change across gender higher temperatures mainly shift males time from leisure to off farm work but mainly shift females time from farm work to off farm work

migration with endogenous moving costs we study a dynamic model of labor migration in which moving costs decrease with the number of migrants already settled in the destination this assumption is supported by sociological studies of migrant networks with endogenous moving costs migration occurs gradually over time once it starts it develops momentum and migratory flows may increase even as wage differentials narrow in addition migration tends to follow geographical channels and low moving cost individuals migrate first these patterns are consistent with historical evidence from the great black migration of 1915 1960 in the united states much of which cannot be reconciled with existing migration models excerpt

optimal incentive contracts in the presence of career concerns theory and evidence this paper studies optimal incentive contracts when workers have career concerns concerns about the effects of current performance on future compensation we show that the optimal compensation contract optimizes total incentives the combination of the implicit incentives from career concerns and the explicit incentives from the compensation contract thus the explicit incentives from the optimal compensation contract should be strongest for workers close to retirement because career concerns are weakest for these workers we find empirical support for this prediction in the relation between chief executive compensation and stock market performance

wage shocks and the technological substitution of low wage jobs we extend the task based empirical framework used in the job polarization literature to analyze the susceptibility of low wage employment to technological substitution we nd that increases in the cost of low wage labor via minimum wage hikes lead to relative employment declines at cognitively routine occupations but not manuallyroutine or non routine low wage occupations this suggests that low wage routine cognitive tasks are susceptible to technological substitution while the short run em

selection and network effects migration flows into oecd countries 1990 2000 abstract this paper presents empirical evidence on immigration flows into the oecd countries during the period 1990 2000 our results indicate that network effects are strong but vary between different groups of welfare states and between countries according to the type of immigration policy being applied network effects seem to be less important in the nordic countries which also seem to attract immigrants from the lowest income level source countries we do not find clear evidence that selection effects measured by migration flows being sensitive to differences in public social expenditures have had a major influence on the observed migration patterns until now this may partly be explained by restrictive migration policies which may have dampened the potential selection effects

immigrant links to the home country empirical implications for u s bilateral trade flows immigrants ties to their home countries can play a key role in fostering bilateral trade linkages immigrant ties include knowledge of home country markets language preferences and business contacts that have the potential to decrease trading transaction costs empirical results for the united states suggest that immigrant links have historically been important in increasing bilateral trade flows with immigrants home countries copyright 1994 by mit press

return migration wage differentials and the optimal migration duration in simple static models migration increases with the wage differential between host and home country in a dynamic framework and if migrations are temporary the size of the migrant population in the host country depends also on the migration duration this paper analyses optimal migration durations in a model which rationalises the decision of the migrant to return to his home country despite persistently higher wages in the host country the analysis shows that if migrations are temporary the optimal migration duration may decrease if the wage differential grows larger using micro data for germany the second part of the paper provides empirical evidence which is compatible with this hypothesis

are wages habit forming evidence from micro data although utility functions play a central role in economics the axiom that utility depends only on the absolute levels of its arguments is rarely tested this paper uses panel data on 2000 british employees who remain with the same employer and who are not promoted from one wave to the next it is shown that one important measure of well being overall job satisfaction is strongly positively correlated with the change in the worker s pay between waves but is unrelated to the current level of pay empirical tests suggest that a reference dependent satisfaction function where individual well being depends on current pay relative to past pay is more consistent with these regression results than are productivity or agency explanations of increasing wage profiles some evidence is presented of greater job satisfaction effects of pay rises for lower paid less well educated and younger workers these results provide some micro evidence consistent with the theory widespread in social science of habituation individuals may become used to any given level of consumption or income as such they tie in with the finding that a country s well being as measured by the average happiness of its citizens is only weakly correlated with its per capita gnp

threshold models of interpersonal effects in consumer demand abstract whether one buys may be determined in part by how many others have when the correlation is positive we refer to bandwagon effects and when negative reverse bandwagons we construct demand schedules in the presence of such effects and with simple assumptions about supply investigate the existence of and approach to equilibrium stable price quantity equilibria exist but for many plausible parameter values equilibria are asymptotically unstable and system trajectories consist of cycles that can move with slight parameter changes via successive bifurcations into what has been called chaotic dynamics essentially indistinguishable from random noise these conditions occur despite assumptions of erfect information profit maximizing firms and utility maximizing individuals

a gravity model of immigration this paper develops a gravity model of immigration tests of the model using panel data for 16 oecd countries for 1991 2000 confirm the model s high explanatory power and examples illustrate its usefulness for testing other hypothesized determinants of immigration

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

seniority wages and productivity a turbulent decade why does a worker s wage tend to grow with seniority in the firm and what does this have to do with productivity two decades ago neoclassical labor economists thought that the theory of human capital provided a good answer to this question the last decade has however been one of puzzles and doubt at this point few would give an unambiguous answer and much hinges on the answer an attractive feature of human capital theory is that it yields a consistent and coherent explanation for several aspects of the employer employee relationship for example seniority systems layoff policies that vary with skill and the relationship between tenure and turnover can be explained in terms of human capital the fact that these explanations are connected leads however to something like a domino effect doubts about one cast doubt on the others if the human capital explanation for the wage seniority relationship is flawed then human capital explanations for other phenomena may require reevaluation in addition an important body of empirical research is built around the assumption that at any point in time a person s wage indicates the person s productivity included here is the extensive literature on the human capital earnings function as well as work on labor demand market discrimination and compensating differentials that assumption has become controversial in recent years in part because implicit contract theories predict that compensation will be redistributed over the period of the contract if a person s spot wage has little to do with spot productivity but rather is an instrument of a complex insurance or deferred compensation scheme then a reassessment of the empirical research may be necessary

the empirical content of nash bargained household behavior in households whose allocation decisions can be represented as nash bargained household decisions extrahousehold environmental parameters eeps serve as pure shifters of the threat points the comparative statics of changes in demands due to changes in these eeps are given these are incorporated into a comprehensive statement of the empirical content of nash bargained household behavior including a nash generalization of barten s 1966 fundamental matrix equation of the theory of consumer demand estimation and data requirements are discussed along with nested testing of the following structure the neoclassical model is nested in the nash bargained model which in turn is nested in an unrestricted model of household demands emphasized throughout is the enriched menu of explanatory variables for demand analysis provided by the nash model as well as the model s ability to jointly analyze i household formation and ii intrahousehold allocation decisions

mobility costs frictional unemployment and efficiency with imperfect job information flows it is plausible that the distribution of job offerings becomes more attractive when there are more vacancies and more unemployed with word of mouth communication this condition is derived given this condition steady state equilibrium is not efficient with welfare increased by the introduction of unemployment compensation even though all agents are risk neutral in this way workers become more selective in the jobs they accept

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

why unions reduce wage inequality a theory of domino effects numerous empirical studies show that unions reduce wage differences i demonstrate that their motive might be a mix of fairness and strategy maximizing the use of union bargaining power in the presence of efficiency wages unions can push primarily for raising the lowest wages and still not sacrifice higher wages much if the employers themselves increase higher wages to protect efficiency enhancing wage differences if these domino effects are strong enough then an egalitarian wage policy might even increase the median wage

the export effect of immigration into the usa much has been written on the connection between migration and international trade human history provides important examples of migrations leading to increased trade activity with perhaps the most well known example of the overseas chinese this study investigates the trade related importance of chinese and other immigrants into the usa previous studies may have underestimated or overestimated the relationship between trade and migration with nations treated as featureless plains rather than as varied landscapes this study contends that an understanding of the immigration trade relationship can be improved upon by examining the specific pattern and destination of immigration into specific us states using state level export data to 28 immigrant source countries in 1993 a strong immigration trade link is found reinforcing conclusions made by previous research using country level data the compelling connection between immigration and trade found in this study and others suggests that future change

job tenure and joblessness of displaced workers selective search where unemployed job losers confine their job seeking efforts to matches in the pre separation sector has attracted considerable attention as a possible source of high and persistent unemployment however this idea is questionable

a note on defensive expenditures harmonised law diverse results in the context of many environmental hazards there is scope for self defence by victims multiple equilibria arise in a model of bilateral precaution under a regime of strict but incompletely enforced environmental liability this means that the same system of environmental law instigated in two economies may lead to very different outcomes it impacts upon policy analysis in a variety of ways and provides a channel for cultural factors to matter we explore the positive and normative effects of subsidising self defence

migration and child development during the food price crisis in el salvador abstract migration is often used as parts of both ex post and ex ante strategies to mitigate risks to household incomes there is little empirical evidence however of the way that migration actually helps households in times of shocks in this paper i describe how the peak of the worldwide food price crisis affected anthropometric statistics among young children in el salvador and how households with access to international migrants were not affected as negatively as households without such access in 2008 el salvador experienced food price inflation of 15 and the evaluation of red solidaria el salvador s conditional cash transfer program shows that height for age haz z scores among children under 3 years old declined by 0 2 standard deviations on average in this paper i use the red solidaria evaluation data to assess whether children in households with access to remittances or international migrants were better off than households without access to migration income using both repeated cross sectional data and individual panel data i find that as theory would expect children in households with access to international migrants have much lower declines in their haz scores

multilateral resistance to migration the rate of migration observed between two countries does not depend solely on their relative attractiveness but also on the one of alternative destinations following the trade literature we term the influence exerted by other destinations on bilateral flows as multilateral resistance to migration and we show how it can be accounted for when estimating the determinants of migration rates in the context of a general individual random utility maximization model we propose the use of the common correlated effects estimator pesaran 2006 and apply it to high frequency data on the spanish immigration boom between 1997 and 2009 compared to more restrictive estimation strategies developed in the literature the bias goes in the expected direction we find a smaller effect of gdp per capita and a larger effect of migration policies on bilateral rates

industrial groupings and foreign direct investment we explore worldwide foreign direct investment location decisions by japanese manufacturing firms from 1985 through 1991 our conditional logit estimates provide evidence that firms location decisions are affected by membership in either vertical or horizontal keiretsu consistent with previous studies that stress agglomeration effects on firms location decisions we find that the stock of investment in a region by a firm s vertical keiretsu partners increases the probability of location further we find that the recent flow of investment into a region by a firm s horizontal keiretsu partners increases the probability of investment to the region providing evidence of networking effects

a closer look at the determinants of international migration decomposing cultural distance abstractusing a modified gravity model and three measures of cultural distance we employ the zero inflated negative binomial estimation technique to examine the impact of cultural distance on international migration flows we confirm the finding of prior studies that there exists a negative relationship between composite measures of cultural distance and immigrant flows extending the literature we decompose our composite cultural distance measures into their component dimensions to examine potential variability in the influences of individual dimensions on international migration we find the cultural dimensions that reflect individualism uncertainty avoidance and perceived gender roles are typically more influential in determining immigrant flows than are other cultural dimensions

the pursuit of opportunity explaining selective black migration abstract this paper examines the destination choices of black migrants during the great migration as previous research has shown educated blacks were more likely to relocate to the north in the pre world war ii era this analysis shows that this tendency can be attributed to the better educated migrants ability to finance transportation costs greater responsiveness to intercity wage differentials and stronger distaste for southern disamenities after 1940 the destination choice gap closed largely because migrant responses to wage differentials and valuation of southern disamenities changed these changes are observed both in the population at large and within birth year cohorts

migration and rural welfare the impact of potential policy reforms in europe summary this paper uses an agricultural household model in an imperfect market environment and data from burkina faso to explore the impact of potential immigration policy reforms in europe on the welfare of rural households simulation results demonstrate that in contrast to continental migration increased intercontinental migration has strong positive household welfare effects similarly an increase in the stay abroad of intercontinental migrants impacts positively on welfare of the migrant sending household results of these simulations lend support to the introduction of a tmp which would in addition to facilitating migration control in host economies improve the welfare of sending households by allowing for increased engagement in intercontinental migration the temporary nature of such a program would ensure that dutch disease effects would be mitigated through eventual migrant return

understanding different migrant selection patterns in rural and urban mexico abstract the productive characteristics of migrating individuals emigrant selection affect welfare the empirical estimation of the degree of selection suffers from a lack of complete and nationally representative data this paper uses a dataset that addresses both issues the enet mexican labor survey which identifies emigrants right before they leave and allows a direct comparison to non migrants this dataset presents a relevant dichotomy it shows negative selection for urban mexican emigrants to the united states for the period 2000 2004 together with positive selection in mexican emigration out of rural mexico to the united states in the same period three theories that could explain this dichotomy are tested whereas higher skill prices in mexico than in the us are enough to explain half of the negative selection result in urban mexico its combination with network effects and wealth constraints fully accounts for positive selection in rural mexico

short term contracts and long term agency relationships abstract long term contracts are valuable only if optimal contracting requires commitment to a plan today that would not otherwise be adopted tomorrow we show that commitments are unnecessary and hence short term contracts are sufficient if 1 all public information can be used in contracting 2 the agent can acess a bank on equal terms with the principal 3 recontracting takes place with common knowledge about technology and preferences and 4 the frontier of expected utility payoffs generated by the set of incentive compatible contracts is downward sloping at all times

a model of multiple equilibria in geographic labor mobility abstract we develop a model of double matching in the labor market and the social environment in order to explain different migration patterns in response to local economic shocks this approach explains the different behaviors of workers in different groups regions or countries in an endogenous way by showing the existence of multiple equilibria rather than in an exogenous manner by introducing ex ante regulations or unemployment benefits this model can also explain why individuals from some communities form sister communities in some cases and not in others

job recruitment networks and migration to cities in india abstract economists have focused on job search and supply side explanations for network effects in labour transactions this paper develops and tests an alternative explanation for the high prevalence of network based labour market entry in developing countries in our theoretical framework employers use employee networks as screening and incentive mechanisms to improve the quality of recruitment our framework suggests a negative relationship between network use and the skill intensity of jobs a positive association between economic activity and network use and a negative relationship between network use and pro labour legislation furthermore social identity effects are expected to intensify when compared to information sharing and other network mechanisms using data from an all india employment survey we implement a novel empirical strategy to test these relationships and find support for our demand side explanation

migration and incomes in source communities a new economics of migration perspective from china the objective of this paper is to understand the effects of china s migration on source communities and to discuss their policy implications we draw from new economics of labor migration nelm theory to understand how migration and migrant remittances can relax or tighten market constraints in china s rural economy using simultaneous equation econometric techniques and household survey data from china we estimate net sectorspecific effects of migration on rural household income focusing on farm production and self employment our econometric findings indicate that the loss of labor to migration has a negative effect on household cropping income in source areas however we provide evidence that remittances sent home by migrants positively compensate for this lost labor effect contributing to household incomes directly and indirectly by stimulating crop and possibly self employment production this finding offers evidence in support of the nelm hypothesis that remittances loosen constraints on production in the imperfect market environments characterizing rural areas in less developed countries taking into account both the multiple effects of migration and the change in household size participating in migration increases household per capita income between 14 and 30 percent migration and incomes in source communities a new economics of migration perspective from china china is experiencing the largest peacetime flow of labor out of agriculture ever witnessed in world history solinger 1999 rozelle et al 1999 despite the rapid expansion of labor migration china s work force is still disproportionately employed in agriculture compared to other countries at similar levels of per capita gdp taylor and martin 2001 hence as china s economy continues to expand the flow of labor to urban areas will continue and even accelerate johnson 1999 the massive flow of labor away from farms has intensified research interest in china s migration in recent years however as in the broader literature on migration in less developed countries most recent studies on china s migration have focused on determining the size and composition of the labor flow macroeconomic implications of increased migration and the effects of migration on urban areas zhao 1999 yang 1999 1997 less emphasis has been placed on researching the effects of migration on the rural communities that migrants leave even though evidence shows that the rural household in the village of origin is typically the central concern of all those involved in migration both those who leave and those who stay behind exceptions include wang and zuo 1999 bai 2001 moreover the recent increase in migration has left policy makers particularly concerned regarding the way source communities will be affected moa 1999 they are concerned that as labor flows away from farms food production and crop income will decline potentially threatening china s food security furthermore policy makers are concerned about the increasing gap between urban and rural household incomes if migration exacerbates this gap some fear that as it grows rural residents eventually will flood cities ill equipped to absorb them others fear that discontent over a rising urban rural income gap could even spill over into political unrest yang 1999 because china s markets and other modern economic institutions are still relatively undeveloped migration may play a pivotal role in creating or overcoming constraints caused by the lack of well functioning markets and or institutions knight and song 1999 benjamin and brandt 2000 the new economics of labor migration nelm literature analyzes migration as a household decision rather than as an individual decision stark 1991 the nelm hypothesizes that rural households facing imperfect market environments decide

a life cycle model of outmigration and economic assimilation of immigrants in germany this paper estimates a structural dynamic life cycle model of outmigration where in each period immigrants choose whether to work in the host country not to work but remain in the host country or outmigrate the model incorporates several features of existing life cycle theories of outmigration but distinguishes itself by introducing uncertainty in about future earnings and preferences which allows immigrants to revise their duration decisions throughout their migration experience because immigrants simultaneously face a migration and a work decision in each period the economic assimilation rates commonly used to assess the performance of immigrants in the host economy are endogenously determined and estimated a feature previously ignored in the literature we overcome the problem of not directly observing outmigration movements by using panel attrition as a proxy variable and use a simple method to correct for the fact that part of the attrition is not a consequence of outmigration estimates are used to predict changes in life cycle patterns of outmigration behavior estimation results indicate that outmigration does not depend exclusively on earnings differentials estimated assimilation rates are found to be robust to selection effects immigrants are found to be forward looking decision makers and simulations show that predicted migration durations are very sensitive to changes in their economic environment and differ considerably from those of a myopic model

long term short term and renegotiation on the value of commitment in contracting spot contracting generally involves efficiency losses relative to long term contracting it is proved here that short term contracting and renegotiation allow to achieve long run efficiency when transfers are not limited objectives are conflicting and no relevant asymmetric information appears at recontracting dates this last assumption excludes adverse selection but not moral hazard when technologies and preferences are time separable copyright 1990 by the econometric society

networks and selection in international migration to spain we offer fresh evidence on the effect of migrant networks on two essential aspects of migration 1 the total scale of migration and 2 the skill composition of migration our analysis is for the remarkable case of spain which experienced a full blown immigration boom from the mid 1990s up to the global financial crisis to accommodate flexible substitution patterns across alternative migrant destinations we use a three level nested multinomial logit model we find a strong positive network effect on the scale of migration and a strong negative effect on the ratio of high skilled to low skilled migrants simplifying restrictions on the structure of cross destination substitutability are rejected by the data jel f22 j61

local and personal networks in employment and the development of labor markets evidence from the cut flower industry in ethiopia summary we examine the roles of local and personal networks in the employment process and the emergence and development of the labor market in ethiopia s growing cut flower industry using primary survey data of 320 workers randomly sampled from all 64 farms we find that workers who were recruited informally using the social ties were paid less than the formally recruited workers at hiring however these workers quickly increased their productivity and the effect of social ties on wages disappeared over time further we find that the development of labor market for this newly emerged industry took place particularly within the industrial cluster

the great mexican emigration abstract in this paper we examine net emigration from mexico over the period 1960 to 2000 the data are consistent with labor supply shocks having made a substantial contribution to mexican emigration accounting for two fifths of mexican labor flows to the united states over the last two decades of the twentieth century net emigration rates by mexican state birth year cohort display a strong positive correlation with the initial size of the mexican cohort relative to the corresponding u s cohort in states with long histories of emigration the effects of cohort size on emigration are relatively strong consistent with the existence of preexisting networks

explaining us immigration 1971 1998 abstract in this paper we develop and estimate a model to explain variations in immigration to the united states by source country since the early 1970s the explanatory variables include ratios to the united states of source country income and education as well as relative inequality in addition we incorporate the stock of previous immigrants and a variety of variables representing different dimensions of the immigration quotas set by policy we use the results to shed light on the impact of policy by simulating the effects of the key changes in immigration policy since the late 1970s we also examine the factors that influenced the composition of u s immigration by source region over the entire period

seasonal migration to mitigate income seasonality evidence from bangladesh in northwest bangladesh some 36 percent of poor households migrate every year during the lean monga period to cope with seasonal deprivation analysis of household survey data shows that the probability of seasonal migration is high for households with a high dependency ratio high dependency on wage employment and in villages with high unemployment but low in villages with microcredit access findings show that seasonal migration helps households to smooth consumption and those non migrant households who suffer during monga will likely benefit from deciding to migrate but the cost of migration and lack of networking are potential barriers the paper is structured as follows section one gives introduction the second section discusses the data and its major characteristics such as the incidence of seasonal migration as a coping strategy and its relation to seasonal hardships measured by starvation and meal rationing the third section presents an analytical framework of how seasonal migration can help smooth consumption during the lean season the fourth section analyses the determinants of seasonal migration while the fifth section assesses the potential effect of seasonal migration on rural households consumption smoothing behavior finally section six summarizes the study findings and their policy implications

hedonic based labor supply substitution and the ripple effect of minimum wages this paper analyzes a new explanation of the ripple effect of minimum wages based on how minimum wages affect hedonic compensation minimum wage hikes lower compensating differentials at low skil

bandwagons and the threat of chaos interpersonal effects revisited abstract this paper extends granovetter and soong s work on bandwagons by introducing interpersonal effects at the level of preferences rather than at the level of demand it is found that markets generally will not follow the first order difference equations analyzed by g s because consumers will form expectations based on the market s entire history rather than the last period alone when those expectations are adaptive and the rate of expectations adjustment sufficiently low the threat of unstable and chaotic dynamics is eliminated the paper also describes the efficiency problems generated by interpersonal effects

the economic impact of the famine in the short and long run both short and long term economic consequences of the irish famine of the period 1845 1849 are reviewed the author concludes that the famine completely altered the structure of the irish labor market and that the migration associated with the famine resulted in the integration of ireland with world labor markets and a significant increase in irish wages annotation

the effect of male migration on employment patterns of women in nepal what is the impact of male migration on the labor market behavior of women in nepal the instrumental variable full information maximum likelihood method is applied to data from the 2004 nepal household survey to account for unobserved factors that could simultaneously affect men s decision to migrate and women s decision to participate in the labor market the results indicate that male migration has a negative impact on the level of the labor market participation by women in the migrant sending household there is evidence of substantial heterogeneity based on both observable and unobservable characteristics in the impact of male migration the findings highlight the important gender dimension of the impact of predominantly male migration on the well being of sending households strategies for economic development in nepal should take into account such gender aspects of the migration dynamics

does the chinese diaspora speed up growth in host countries summary we compiled a new enhanced data set on the population share of overseas chinese covering 147 countries over the period 1970 2010 linking the migration and economic growth literature this article attempts to estimate the impact of the chinese diaspora on economic growth in host countries regression results from both barro type and dynamic panel data models suggest that a country s initial relative endowment with overseas chinese is positively related to subsequent growth results are robust to a number of sensitivity tests the effect is transmitted via increased trade openness enhanced investment and general tfp effects

migration networks as a response to financial constraints onset and endogenous dynamics abstract a migration network is modeled as a mutually beneficial cooperative agreement between financially constrained individuals who seek to finance and expedite their migration the cooperation agreement creates a network established migrants contract to support the subsequent migration of others in exchange for receiving support themselves when the model is expanded to study cooperation between more than two migrants it emerges that there is a finite optimal size of the migration network consequently would be migrants in the sending country will form a multitude of networks rather than a single grand network

family attachment and the decision to move by race abstract blacks in the united states move less than whites despite having many characteristics that are commonly associated with high geographical mobility such as high unemployment low rate of home ownership low marriage rate and settlement in areas where unemployment is high we find that this puzzle can be explained by the effects of family ties both nuclear and extended families which we proxy using data from the university of michigan s psid the results are robust to different specifications and estimation techniques

worker reputation and productivity incentives this paper examines firms problem of how to motivate risk averse workers not to shirk when workers utility functions are unknown the problem is studied in a 2 period setting in which a worker s actions today can influence not only his compensation today but the firms beliefs about his preferences firms cannot credibly commit to ignore the revealed information so workers actions today affect their future compensation contracts it is shown that in the wilson miyazaki equilibrium firms may pool workers and learn about their types gradually over time rather than inducing them to separate and reveal their types immediately

short term labour migration from the republic of armenia to the russian federation we explore the determinants of short term labour migration from armenia to russia based on a unique panel dataset a dynamic switching regression model with endogenous switching is applied our evidence pinpoints migration experience the expected individual income gap from migration low job opportunities in armenia and the possibility of diversifying income risks as the most important determinants family ties turn out to be insignificant the hypothetical income gap is about 280 per cent several explanations are provided for the fact that some individuals do not migrate in spite of a large income gap

climatic factors as determinants of international migration we examine environmental change as a potential determinant of international migration we distinguish between unexpected short run factors captured by natural disasters as well as long run climate change and climate variability captured by deviations and volatilities of temperatures and rainfall from and around their long run averages starting from a simple neo classical model we use a panel dataset of bilateral migration flows for the period 1960 2000 that allows us to control for numerous time varying and time invariant factors we find no direct impact of climatic change on international migration across our entire sample these results are robust when conditioning on characteristics of origin countries as well as when further considering migrants returning home and the potential endogeneity of our network variable in contrast there is evidence of indirect effects of environmental factors going through wages we further find strong evidence that natural disasters beget greater flows of migrants to urban environs

efficiency gains from liberalizing labor mobility in this paper we quantify the effect of a complete liberalization of cross border migration on the world gdp and its distribution across regions we build a general equilibrium model endogenizing bilateral migration and income disparities between and within countries our calibration strategy uses data on effective and potential migration to identify total migration costs and visa costs by education level data on potential migration reveal that the number of people in the world who have a desire to migrate is around 400 million this number is much smaller than that predicted in previous studies and reflects the existence of high incompressible migration costs in our benchmark framework liberalizing migration increases the world gdp by 11 5 12 5 percent in the medium term our robustness analysis reveals that the gains are always limited in the range of 7 0 percent with schooling externalities to 17 9 percent if network effects are accounted for

are immigrants favorably self selected one of the standard propositions in the migration literature is that migrants tend to be favorably self selected for labor market success that is economic migrants are described as tending on average to be more able ambitious aggressive entrepreneurial or otherwise more favorably selected than similar individuals who choose to remain in their place of origin in recent years there have been challenges to the general proposition of the favorable selectivity of migrants in addressing this issue this paper considers alternative specifications of the migration model that are relevant for the issue of migrant selectivity excerpt

assessing the importance of tiebout sorting local heterogeneity from 1850 to 1990 this paper argues that long run trends in geographic segregation are inconsistent with models where residential choice depends solely on local public goods the tiebout hypothesis we develop an extension of the tiebout model that predicts as mobility costs fall the heterogeneity across communities of individual public good preferences and of public good provision must weakly increase given the secular decline in mobility costs these predictions can be evaluated using historical data we find decreasing heterogeneity in policies and proxies for preferences across i a sample of u s municipalities 1870 1990 ii all boston area municipalities 1870 1990 and iii all u s counties 1850 1990

the spatial mismatch hypothesis what has the evidence shown this paper reviews 20 years worth of empirical evidence on the spatial mismatch hypothesis after briefly surveying the relevant models from urban and labour economics and recent trends in employment and population suburbanisation the empirical evidence on spatial effects is examined this literature includes evidence on the effects of residential segregation residential suburbanisation and employment suburbanisation and direct measures of access such as travel times the most recent evidence suggests that spatial mismatch is relevant for explaining black white employment differences though the magnitudes of these effects remain unclear

seeking asylum in europe seeking asylum in europe over the last three decades the annual number of applications for asylum in the countries of the european union has increased from about 15 000 to more than 300 000 this has sparked a political backlash a revolution in policy a lively academic debate but very little economic analysis although the causes of asylum flows and the effects of policy are much discussed they have rarely been the subject of quantitative analysis this article examines the evolution of asylum flows and asylum policy across the eu since the early 1980s it investigates the effects of war and conflict economic incentives and asylum policies on the total numbers and on the proportions going to the different countries of the eu special attention is given to the growth of policy restrictiveness across the eu and to the harmonization of asylum policies contrary to some views policy has worked to stem the flows but it has been overwhelmed by other forces timothy j hatton

heaven s swing door endogenous skills migration networks and the effectiveness of quality selective immigration policies a growing number of oecd countries are leaning toward the adoption of selective immigration policies which are expected to raise the quality or education level of migrants this view neglects two important dynamic effects the role of migration networks which could reduce the quality of migrants and the responsiveness of education decisions to the prospect of migration we propose a model of self selection into migration with endogenous education choices which predicts that migration networks and the quality of migrants can be positively associated when destination countries adopt sufficiently selective immigration policies empirical evidence presented as background motivation suggests that this is indeed the case

are international trade and factor mobility substitutes abstract this paper analyzes whether factor flows and commodity trade are substitutes or complements i e whether increasing the level of one impacts adversely or favorably on the volume of the other it derives with the aid of a new general equilibrium framework of the world which allows possible differences in factor endowments tastes and technologies across the two trading countries the necessary and sufficient condition for substitutability and complementarity the results are then further examined in two special cases a survey of different concepts of substitutability and complementarity which have appeared in the literature is also given

reconciling the pattern of trade with the pattern of migration aspects of the brain drain are considered in a theoretical context the emphasis is on the migration of those with managerial skills between countries with abundant skilled labor and those with abundant unskilled labor the results indicate that countries with abundant skilled labor therefore export managers e g through multinational subsidiaries and skilled labor intensive goods yet import skilled employees the brain drain excerpt

the drivers of international migration to the uk a panel based bayesian model averaging approach a heterogeneous panel based bayesian model averaging approach is used to identify the robust economic and policy drivers of international migration to the uk from 14 different source regions over 1980 2007 around three quarters of the increase in net immigration over the last decade which is particularly pronounced for selected source regions is associated with structural change which may be attributed to uk and foreign immigration policy the remainder of the rise is largely explained by friends and family effects there are considerable uncertainties associated both with the effects of particular economic drivers of immigration and with forecasts of immigration

a model of u k emigration 1870 1913 this paper develops a simple time series model of emigration and applies it to data for emigration from the united kingdom 1870 1913 the model is derived from a macroeconomic analysis of the migration decision and provides a specific functional form and dynamic structure it encompasses and explains many of the empirical findings of earlier research on the determinants of emigration over this historical period the results support the model strongly in most respects both wage rates and employment rates in the sending and in the receiving countries influenced fluctuations in emigration the short run fluctuations were driven largely by variations in employment rates while the long run level of emigration was determined largely by the relative wage

does welfare spending crowd out charitable activity evidence from historical england under the poor laws this paper examines the relationship between government spending and charitable activity we present a novel way of testing the crowding out hypothesis making use of the fact that welfare provision under the old poor laws was decided on the parish level thus giving the heterogeneity we need to test for the impact of different levels of welfare support within a single country using data on poor relief spending combined with data on charitable incomes by county for two years before and after 1800 we find a positive relationship areas with more public provision also enjoyed higher levels of charitable income these results are confirmed when instrumenting for poor law spending using the distance to london and historical migration to london as well as when looking at first differences

high compensation creates a ratchet effect consider a firm which pays a credit constrained worker for his effort over two periods the more the firm pays in one period the wealthier is the worker in the following period and so the more he must then be paid for a given effort we describe the profit maximising contract under these conditions showing how this wealth ratchet effect can raise wages over time and cause the firm to fire older workers

ethnic discrimination and the migration of skilled labor we develop a model of interdependency between emigration education investment and discrimination in the context of an ethnically divided developing economy assuming a rent extraction basis for discrimination we first endogenize ethnic discrimination in the benchmark case of an economy closed to migration and then explore how migration prospects affect ethnic inequality under the free migration assumption we find the intuitive result that migration prospects have a protective effect on the minority immigration restrictions set by receiving countries on the other hand have the paradoxical effect of creating migration flows that would otherwise have remained latent

employment with connections negative network effects abstract in less developed countries it is widely observed that employers hire workers through employee referrals in this paper we show an extension of this kind of networks that may decrease applicants payoffs while a diversification of the networks can raise referred applicants payoffs we also discuss the effect of the extension of interlinked contracts on farmers wages

brain drain and human capital formation in developing countries winners and losers using new data on emigration rates by education level we examine the impact of brain drain migration on human capital formation in developing countries we find evidence of a positive effect of skilled migration prospects on gross human capital formation in a cross section of 127 countries for each country of the sample we then estimate the net effect of the brain drain using counterfactual simulations countries combining relatively low levels of human capital and low emigration rates are shown to experience a beneficial brain drain and conversely there are more losers than winners and the former tend to lose relatively more than what the latter gain

technology diffusion and international income convergence abstract a macroeconomic model of international income convergence driven by differences in technology is presented ldc firms adopt foreign technology by paying an upfront cost of adaptation and early adopters create a positive externality for followers in equilibrium adoption is gradual and so is income convergence because of the externality small differences in adoption costs across ldcs can lead to large differences in long run income during convergence the ldc economy is dualistic with large high technology firms operating alongside small traditional establishments the effects of trade policy and direct foreign investment are also examined

the ratchet effect and the market for secondhand workers workers in a long term relationship often have an incentive to hide their ability early in the relationship to avoid having the firm increase the level of output expected from them in the future we show that competition for older workers will permit the implementation of efficient piece rate contracts when the difficulty of the job is unobserved by the firm gibbons 1987 has shown that all piece rate contracts will be inefficient together these results may explain why piece rates are common in some jobs such as agricultural work and sales and not as popular for many manufacturing jobs

network effects and the dynamics of migration and inequality theory and evidence from mexico international migration is costly and initially only the middle class of the wealth distribution may have both the means and incentives to migrate which can increase inequality in the sending community however the migration networks formed lower the costs for future migrants which can in turn lower inequality this paper shows both theoretically and empirically that wealth has a nonlinear effect on migration and then examines the empirical evidence for an inverse u shaped relationship between emigration and inequality in rural sending communities in mexico after instrumenting we find that the overall impact of migration is to reduce inequality across communities with relatively high levels of past migration we also find some suggestive evidence for an inverse u shaped relationship among communities with a wider range of migration experiences

differential mortality and wealth accumulation the issue of asset accumulation and decumulation is central to the life cycle theory of consumer behavior and to many policy questions one of the main implications of the life cycle model is that assets are decumulated in the last part of life most empirical studies in this area use cross sectional data of estimate mean or median wealth age profiles the use of cross sections to estimate the age profile of assets is full of pitfalls for example if wealth and mortality are related in that poorer individuals die younger one overestimates the last part of the wealth age profile when using cross sectional data because means or other measures of location are taken over a population which becomes richer as it ages this paper examines the effect of differential mortality on cross sectional estimates of wealth age profiles our approach is to quantify the dependence of mortality rates on wealth and use these estimates to correct wealth age profiles for sample selection due to differential mortality we estimate mortality rates as a function of wealth and age for a sample of married couples drawn from the survey of income and program participation sipp our results show that accounting for differential mortality produces wealth profiles with significantly more dissaving among the elderly

piece rate incentive schemes this paper uses recent results from incentive theory to study heretofore informal critiques of piece rate compensation schemes the informal critiques are based on the history of failed attempts to install piece rate compensation schemes at the turn of the century the formal analysis emphasizes the importance of information and commitment in contracting the main result is as follows in a work environment characterized by hidden information and a hidden action if neither the firm nor the worker can commit to future behavior then no compensation scheme piece rate or otherwise can induce the worker not to restrict output

brain drain and ldcs growth winners and losers we present an empirical evaluation of the growth e ects of the brain drain for the source countries of migrants using recent us data on migration rates by education levels carrington and detragiache 1998 we nd empirical support for the bene cial brain drain hypothesis in a sample of 50 developing countries at the country level we distinguish between winners and losers among source countries while the number of winners is smaller these include nearly 80 of the total population of developing countries jel classi cation f22 j24 o15

immigrant selection in the oecd in this paper we examine the determinants of educational selectivity in immigration using immigrant stock data for 70 source countries and 21 oecd destination countries as observed in the year 2000 2001 we develop a variant of the roy model to estimate the determinants of educational selectivity two key findings emerge first the effect of the skill premium which is at the core of the roy model can be observed only after we take into account the poverty constraints operating in the source countries second cultural similarities colonial legacies and physical distance are often more important determinants of educational selectivity than wage incentives or selective immigration policy

salaries and piece rates compensation can take many forms remuneration can come as pecuniary payments as fringes such as health and pension benefits or as a nonpecuniary reward such as plush office furniture that costs the firm less than it benefits the worker a significant literature has examined the trade offs between pecuniary and nonpecuniary compensation the modern work having been pioneered by rosen 1974 more recently another body of literature has examined the selection of method of total compensation ignoring the distinction between pecuniary and nonpecuniary payment this work has focused on risk and incentive factors it has resulted in comparisons of compensation based on absolute output levels to that based on relative performance it has also led to explorations of the relation of compensation to experience over the work life 2 little attention has been paid to what may be among the most important and obvious distinction in methods of compensation namely the choice between a fixed salary for some period of time that is paying on the basis of input and some workers receive compensation that is specified in advance and not directly contingent on performance instead it depends on an input measure such as hours worked for others compensation is directly related to output this essay is an attempt to predict a firm s choice of compensation method piece rates are defined more rigorously among the more important factors discussed are worker heterogeneity incentives sorting considerations monitoring costs and asymmetric information one result is that salary workers tend to be of lower quality and more homogeneous than are their piece rate counterparts numerous additional results are provided helpful comments by victoria lazear and yoram weiss are gratefully acknowledged support was provided by the department of labor and the national science foundation 1 see lazear and rosen 1981 stiglitz 1981 holmstrom 1982 green and stokey 1983 2 see lazear 1979 1981 and harris and holmstrom in press

the impact of the great migration on mortality of african americans evidence from the deep south the great migration the massive migration of african americans out of the rural south to largely urban locations in the north midwest and west was a landmark event in u s our paper shows that this migration increased mortality of african americans born in the early twentieth century south this inference comes from an analysis that uses proximity of birthplace to railroad lines as an instrument for migration

immigrant remittances and the venture investment environment of developing countries despite the increasing importance of financial and social remittances to developing countries their impact on home country venture investing environments has been largely overlooked i develop a framework grounded in transaction costs economics and social knowledge theories to investigate relationships between remittances and home country 1 capital availability 2 new business creation and 3 economic internationalization my framework also accounts for individual and collective immigrant attributes that may moderate the impact of remittances on these alternative indicators of the venture investment environment analyses of immigrant remittances to 61 developing countries from 2002 2007 indicate that they increase general and more narrowly defined venture capital availability as well as broader openness to international trade remittances also increase new business start up rates when the developing country s public sector is sufficiently small positive venture funding effects of remittances are magnified when coming from immigrants living in highly concentrated communities but are diminished when coming from highly educated immigrants overall results suggest that developing country immigrants of varying backgrounds play an important role in venture funding founding and integration with the world economy