migration and wages of young men a two period nested logit migration model with selectivity is specified the model is then applied to a sample of young u s male workers from nine different census divisions to study the choices they faced in the first two years after completing full time schooling we find evidence of the existence of unobserved similarities in the divisions within each census region we find that locational choices in one period affect locational choices of individuals in subsequent periods we test for selectivity in division specific wage equations and find little evidence of selectivity in the wage equations of most divisions and evidence of negative selection in the wage equations of two divisions excerpt

geographical mobility and potential wage gain of immigrants within spain ruiz a c geographical mobility and potential wage gain of immigrants within spain regional studies geographical mobility of workers within countries can be a means of equilibrating regional economic disparities within this context a relevant topic is the mobility of foreign workers in the destination country the spanish case is interesting because spain has one of europe s fastest growing immigration rates this paper is aimed first at studying the determinants of interregional geographical mobility of immigrants in spain and second at obtaining consistent estimates of an individual s opportunity wage as a mover or a stayer findings show that an expected wage gain exerts a positive influence on mobility and leads to a better allocation of resources

the empirical content of the roy model this paper clarifies and extends the classical roy model of self selection and earnings inequality the original roy model based on the assumption that log skills are normally distributed is shown to imply that pursuit of comparative advantage in a free market reduces earnings inequality compared to the earnings distribution that would result if workers were randomly assigned to sectors aggregate log earnings are right skewed even if one sectoral distribution is left skewed most major implications of the log normal roy model survive if differences in skills are log concave however few implications of the model survive if skills are generated from more general distributions we consider the identifiability of the roy model from data on earnings distributions the normal theory version is identifiable without regressors or exclusion restrictions sectoral distributions can be identified knowing only the aggregate earnings distribution for general skill distributions the model is not identified and has no empirical content with sufficient price variation the model can be identified from multimarket data cross sectional variation in regressors can substitute for price variation in restoring empirical content to the roy model

on the indeterminacy of capital accumulation paths abstract in neoclassical optimal growth models the stability of the accumulation paths depends on the discount parameter we prove that for discount factors small enough the policy function which describes an optimal path can be of any type the result is achieved using the notion of concavity we adopt a constructive approach given any twice differentiable map we show how to construct an optimal growth problem which produces that map as the optimal policy function a consequence is that chaos can appear in these models we also provide bounds on the values of the discount parameter for which indeterminacy is possible

introduction imperfect information and rural credit markets puzzles and policy perspectives rural credit markets have been at the center of policy intervention in developing countries over the past forty years many governments supported by multilateral and bilateral aid agencies have devoted considerable resources to supplying cheap credit to farmers in a myriad of institutional settings the results of many of these interventions have been disappointing and one explanation for this must be that they were based on an inadequate understanding of the workings of rural credit markets the articles in this symposium issue are devoted to empirical and theoretical investigations of rural credit markets in the framework of the imperfect information paradigm the authors show how this framework is useful not only in explaining puzzling features of these markets but also in providing a policy perspective to assess the successes and failures of specific interventions

fiscal versus traditional market variables in canadian migration this paper evaluates the hypothesis that the influence of traditional market variables on migration in canada has diminished over time this is attributed to a crowding out process whereby growth of social security type programs has cushioned the effects of say unemployment and thus motivation to migrate for jobs and fiscal policies have exerted unintended effects implications are that market forces that would work naturally to induce migration from low to high income regions and thus equalize earned incomes have been short circuited and that traditional tools of manpower policy for influencing migration such as job creation skill enhancement or wages are less effective currently than they might have been in the past

a characterization of erratic dynamics in the overlapping generations model abstract in this paper we characterize and give examples o wide classes of utility functions which generate erratic dynamics in the standard deterministic overlapping generations model erratic dynamics refers to feasible trajectories which are bounded but which do not converge to stationary points or periodic orbits we show that such trajectories are pareto efficient we introduce credit into the model and show how a constant credit expansion rate can result in erratic trajectories in prices and the real value of credit finally we briefly discuss certain technical aspects of the mathematics used and the statistical nature of the dynamics that can arise from deterministic dynamical systems

north american migration returns to skill border effects and mobility costs utilizing a utility maximizing roy type discrete choice model of worker location in canadian provinces and u s states that incorporates returns to skill amenities fixed costs distance langua

financial markets and development my views on this subject have been greatly affected both by the experience of developing countries during the past quarter century and by the major shift evolutionary if not revolutionary in the economists paradigm over that period we have seen that capital accumulation is not enough even the extremely high rates of savings of many of the socialist economies have not managed to compensate for their lack of ability in allocating capital and these countries have for the most part not fared well but extreme free market solutions have fared little better perhaps best illustrated by the experience of chile true believers in the doctrines of the left and the right have this in common they both claim that if the patient had only followed the doctor s orders more precisely the medicine would have worked

further evidence on the asymmetric behavior of economic time series over the business cycle evidence has recently been presented by salih neftci to support the hypothesis that recessions in economic activity tend to be steeper and more short lived than recoveries in economic activity that evidence however was confined to the behavior of the unemployment rate in the united states in this paper it is shown that when neftci s methods are applied to analyze the behavior of real gross national product investment and productivity in the united states or when they are used to analyze industrial production abroad the asymmetry hypothesis seems to be less compelling

interprovincial migration and local public goods the objective of this paper is to test whether fiscally induced migration occurs in canada that is whether interprovincial migration flows are influenced by government tax and expenditure policies in order to do so a multinominal logit model of migration is developed in which individuals choose to live in the province where their utility would be highest the model is estimated using aggregate data for the period 1962 81 the results indicate that migration is influenced by provincial government spending trough the magnitude and direction of the effect differs with the type of government spending the implication of these results is that intergovernmental transfer payments and provincial natural resource revenues also have the potential to influence migration flows in canada summary in fre excerpt

moneylenders and informal financial markets in malawi abstract after a background review of the institutional financial srvices available to small and medium enterprises in malawi and a survey of the literature on malawi s informal financial markets ifms this paper presents a detailed report on the character and operations of a katapila moneylender in lilongwe malai the moneylender market is then analyzed in terms of several themes from the literature on ifms in less developed countries for example calculations show that the interest charges on katapila loans are not justified by economic costs of doing business finally policy implications for promoting more efficient finance are discussed

nonlinear monetary dynamics this article uses the correlation dimension technique along with the residual and shuffle tests to look for evidence of nonlinear dynamic structure in various weekly monetary aggregates their components the monetary base and the money multipliers the results support the barnett and chen 1988 and chen 1988 findings of nonlinearity in divisia m2 divisia m3 and simple sum m2 evidence of nonlinear structure is also found for simple sum m1 currency demand deposits all checkable deposits m3 minus m2 the monetary base and the multipliers of m1 m2 and m3

labor market performance as a determinant of migration in a comparison of migrants with nonmigrants both observed and unobservable productivity factors are relevant this paper focuses more on the unobservable factors and their correlation between places of origin and destination a human capital model of migration demonstrates that more productive workers at the origin would choose to migrate only if the correlation between origin and destination factors is strongly positive longitudinal data drawn from the cote d ivoire living standards survey 1985 86 are used to examine the pattern of migration in the light of labor market performance both of wage employees and non farm self employed workers it is found that indeed the more productive workers migrate furthermore the general direction of migration is toward cities the conclusion is therefore that rural areas lose their productive workers and that urban areas may gain in productivity from the geographical shifts in population

who works for piece rates and why department of agricultural and resource economics i division of agriculture and natural resources l niversity of california at berkeley working paper no 627 who works for piece rates and why by d kate rubin jeffrey m perloff giannini foundation of i gricui turai economics jbi w ty n j 61992 california agricultural experiment station giannini foundation of agricultural economics june 1992

how important is selection experimental vs non experimental measures of the income gains from migration measuring the gain in income from migration is complicated by non random selection of migrants from the general population making it difficult to obtain an appropriate comparison group of non migrants this paper uses a migrant lottery to overcome this problem providing an experimental measure of the income gains from migration new zealand allows a quota of tongans to immigrate each year with a lottery to choose among the excess number of applicants a unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration by comparing the incomes of migrants to those who applied to migrate but whose names were not drawn in the lottery after allowing for the effect of non compliance among some of those whose names were drawn the authors also conducted a survey of individuals who did not apply for the lottery comparing this non applicant group with the migrants enables assessment of the degree to which non experimental methods can provide an unbiased estimate of the income gains from migration they find evidence of migrants being positively selected in terms of both observed and unobserved skills as a result non experimental methods are found to overstate the gains from migration by 9 to 82 percent a good instrumental variable works best while difference in differences and bias adjusted propensity score matching also perform comparatively well

an econometric analysis of interfirm labour mobility this paper utilizes the survey of work history 1981 data to examine the importance of non random sampling in the context of a model of interfirm labour mobility the paper adopts heckman s two step procedure in order to estimate a three equation model incorporating an individual s mobility status as endogenously determined the main conclusion is that in estimating wage equations it is important to consider the role of job mobility and to correct for the effects of sample selection bias the results generally accord with those reported by osberg et al 1986 in the only previous canadian study of job mobility in a sample selection context

migratory labor and agriculture farm workers are shown to respond strongly to economic incentives to seasonally migrate for work the economic model is specified with separate earnings structures for migratory and nonmigratory work and a reservation wage for migration is specified to reflect the choice between migratory and nonmigratory work the empirical model adjusts for self selectivity in the sample and demonstrates that domestic farm workers sort themselves into migratory and nonmigratory workers in a manner consistent with the theory of comparative advantage implications for immigration and government employment and training programs are considered

migration theories and evidence an assessment abstract this paper presents a critical survey of theories of migration their welfare and policy implications and their empirical relevance we also develop some extensions to the theory beginning with the harris and todaro ht model in particular the ht model is extended to examine risk averse behaviour within families where the migration of members of families serves to diversify risk the welfare implications of the individual migration decision and government intervention in the form of employment subsidies are examined recent evidence on international migration is presented it is shown that migration does not flow automatically in response to wage differentials characteristics of migrants and the process of self selection are found to be important determinants of the rate of migration

a declining farm workforce analysis of panel data from rural mexico analysis of nationally representative individual level panel data from 1980 to 2010 reveals a significant negative trend in the agricultural labor supply from rural mexico which is the primary source of hired workers for u s farms these findings offer an explanation for the rise over time in u s farm wages concomitants of the agricultural transformation including growth in the non farm economy falling birth rates and an increase in rural education accelerate the transition of rural mexicans out of farm work higher u s farm wages and increased border enforcement slow the transition but the combined impact of these offsetting variables is relatively small a diminishing farm labor supply has far reaching implications for farmers farm labor organizers rural communities and agricultural workers

credit markets in northern nigeria credit as insurance in a rural economy this article addresses the issues of imcomplete markets and imperfect information in the context of credit markets in rural northern nigeria in much recent theoretical literature the problems of moral hazard and adverse selection are assumed to be decisive for the organization of agrarian institutions in contrast it is found that in the four villages surveyed credit transactions take advantage of the free flow of information within rural communities information asymmetries between borrower and lender are unimportant and their institutional consequences the use of collateral and interlinked contracts are absent credit transactions play a direct role in pooling risk between households through the use of contracts in which the repayment owed by the borrower depends on the realization of random production shocks by both the borrower and the lender

how small enterprises in ghana have responded to adjustment ghana is often cited as an african country that has undertaken major macroeconomic reforms with generally positive results for economic growth within ghana s industrial sector the effects of structural adjustment policies have differed among subsectors and firms little is known however about the impact of adjustment on smaller firms a survey of small scale enterprises sses was carried out in november 1989 to learn more about the impact of the adjustment program on their operations to evaluate their potential contribution to dynamic industrial recovery and to identify appropriate measures that would accelerate the growth of sses in numbers size and productivity specific objectives of the survey were to 1 learn more about the characteristics of small firms and their owners 2 analyze how policy changes have affected small firms highlighting entrepreneurs strategies for adapting to their new environments and 3 identify constraints to the future growth of small firms results show that adjustment policies have forced the sses to become more competitive to survive and that significant structural changes are taking place across subsectors and within firms the overall business environment has generally improved during the adjustment program although shortcomings remain uncertainty about political and economic stability and lack of finance appear to be the most immediate restraints on investment

seasonal fluctuations and the life cycle permanent income model of consumption this paper examines a new possible explanation for the recent rejections of the life cycle permanent income model of consumption the treatment of seasonal fluctuations the paper shows that when the seasonal fluctuations in consumption purchases are included in an analysis of the life cycle permanent income model there is no evidence in the aggregate data against the model the estimates of the parameters of agents utility functions obtained with seasonally unadjusted data are plausible and the unadjusted data do not reject the overidentifying restrictions on the model

chaotic dynamics in economic time series abstract there has recently been considerable interest in chaotic dynamics in a variety of disciplines this paper introduces and then surveys some of the associated literature and techniques applications to economic theory are discussed but the primary focus is on empirical applicability in addition to surveying the literature we also provide an example of the use of these techniques in economics we conclude by highlighting the importance of the techniques for empirical work as well as considering their context in econometric methodology

are international remittances altruism or insurance evidence from guyana using multiple migrant households abstract while international remittances provide significant disposable income for many households in less developed countries there is no consensus on migrants remittance motivation two principal competing explanations for remittances are altruism and risk sharing this paper employs previously unanalyzed data to bring new evidence to the debate we develop a simple theoretical model that yields distinct testable predictions for each motivation among the model s testable predictions is differential remittance behavior by migrants from households with multiple versus single migrants under altruism and risk sharing our estimation finds significant differences in remittance behavior of multiple and single migrants and these differences support the altruistic incentive to remit

who moves a logit model analysis of inter provincial migration in canada this paper addresses the topic of inter provincial migration in terms of the basic question who moves panel logit models of the probability that an individual changes his or her province of residence from one year to the next over the 1982 1995 period are estimated using tax based longitudinal data it is found that moving is i inversely related to the home province s population size presumably reflecting local economic conditions and labour market scale effects while language also plays an important role ii more common among residents of smaller cities towns and especially rural areas than those in larger cities iii negatively related to age marriage and the presence of children for both men and women iv positively related to the provincial unemployment rate the individuals receipt of unemployment insurance except entry men having no market income except for entry men and entry women and the receipt of social assistance especially for men v slightly positively related

nonlinear dynamics and stock returns simple deterministic systems are capable of generating chaotic output that mimics the output of stochastic systems for this reason algorithms have been developed to distinguish between these two alternatives these algorithms and related statistical tests are also useful in detecting the presence of nonlinear dependence in time series in this article the authors apply these procedures to stock returns and find evidence that indicates the presence of nonlinear dependence on weekly returns from the center for research in security prices value weighted index copyright 1989 by the university of chicago

martingales nonlinearity and chaos abstract in this article we provide a review of the literature with respect to the efficient markets hypothesis and chaos in doing so we contrast the martingale behavior of asset prices to nonlinear chaotic dynamics discuss some recent techniques used in distinguishing between probabilistic and deterministic behavior in asset prices and report some evidence moreover we look at the controversies that have arisen about the available tests and results and raise the issue of whether dynamical systems theory is practical in finance

the impact of immigration on child health experimental evidence from a migration lottery program this paper uses a unique survey designed by the authors to compare migrant children who enter new zealand through a random ballot with children in the home country of tonga whose families were unsuccessful participants in the same ballots the authors find that migration increases height and reduces stunting of infants and toddlers but also increases body mass index bmi and obesity among 3 to 5 years old these impacts are quite large even though the average migrant household has been in new zealand for less than 1 year additional results suggest that these impacts occur because of dietary change rather than direct income effects

is the business cycle characterized by deterministic chaos abstract tests are conducted on u s macroeconomic data for the presence of low dimensional deterministic chaos where deterministic chaos is defined as in grandmont s 1985 walras bowley lecture or in brock 1986 the idea is to test for evidence of endogenous instability causing the business cycle low order autoregressions are hard to reject with our methods evidence of chaos is weak but our tests may be too weak to detect it evidence of nonlinearity is present in employment 1950 i to 1983 iv unemployment 1949 i to 1982 iv monthly post war industrial production and pig iron production 1877 1937

informal financial markets under liberalization in four african countries abstract this paper presents survey evidence from four countries on how informal financial agents serve market niches that banks cannot readily reach their methodologies are effective in keeping down transaction costs and default risk relative to banks although informal agents exercise monopoly power in dualistic markets liberalization of repressive financial policies has had little effect on formal financial deepening while informal finance has continued to grow the paper concludes that informal financial institutions are an important vehicle for mobilizing household savings and financing small businesses and it recommends that informal finance be better integrated into financial development strategies

a nested logit migration model with selectivity in this paper we specify a multiple choice migration model with selectivity we estimate this model using observations on individuals drawn from the 1971 census of venezuela there are two main innovations in this paper we apply a correction for the presence of selectivity in wage equations in the context of a multiple choice migration model and we apply a less restrictive technique for modelling multiple discrete choices than in previous studies we study the choices of individuals among 23 states of venezuela each individual is observed to have chosen one state so one wage is observable per person our hypothesis is that individuals choose where to locate on the basis of an evaluation of costs and benefits associated with choosing each state we measure the benefits associated with choosing a given state by means of the wage a person could earn in this state since we observe only one wage for each person we have to impute the unobserved wages for the states this person did not choose in order to study the role of wages in migration however it is possible that unobserved factors which affect both an individual s choice of location and his wages may result in sample selection bias if we try to estimate state specific wage equations by ols on the basis of the self selected samples we apply an estimator proposed by lee 1983 to estimate state specific wage equations free from sample selection bias the wage equations permit us to investigate whether individuals who choose particular states earn different wages from observationally identical individuals drawn from the population at random in the context of a developing country where internal migration flows are large evidence on the selectivity of migration will enhance our understanding of an important labor market adjustment mechanism evidence that people who choose particular locations earn more in those locations than would observationally identical individuals drawn at random from the population positive selection will suggest that migration decisions are made according to the principle of comparative advantage in modelling the choice of location we test whether subsets of states are more highly similar to each other than to other states unobserved similarities between states may arise because of similar amenities or economic conditions which are not otherwise explicitly controlled for in the model we implement the

voting with your feet and the quality of life index abstract this paper develops a new technique that uses the utility maximizing migration decisions of rational voters consumers to construct qol rankings we apply our technique to canadian inter provincial migration data for 1970 1990

internal and international migration in mexico 1995 2000 using micro data from mexico and us 2000 population censuses and following a multi choice variant of roy s 1951 model this article pools into one model the determinants of internal and international migration in mexico while paying explicit attention to the potential problem of self selection the results reveal that ignoring multiple destinations in the migration decision might lead to erroneous inferences about the determinants of migration and the type of selection after controlling for wage differences the results suggest that single adult men with low schooling levels tend to migrate to the us while married women and men with higher levels of schooling tend to migrate within mexico we also found that there are strong differences between domestic and international social networks

the unemployment rate and the business cycle in britain an aggregate and regional analysis jones d manning n and stevenson m 1994 the unemployment rate and the business cycle in britain an aggregate and regional analysis reg studies 28 591 604 it has been suggested that if the business cycle is to be explained then its behaviour should be related to a non linear dynamic process not unlike a limit cycle the time irreversibility exhibited by post war unemployment data is not untypical of a pattern generated by such a non linear structure such a possibility could have important implications for economic policy in certain cases non linearities make forecasting extremely hazardous if not impossible as base line measurement errors cause prediction errors to accumulate at an exponential rate equally worrying is that fundamentally mistaken policy can arise when linear specifications are used to approximate non linear relationships the present paper tests for non linearities in the dynamics of regional unemployment in britain appealing to the idea of a regime switching process we u

economics and the well being of canadian children the basic argument of this paper is that as economists we need to pay more attention to how policy affects the well being of children as individuals not just as members of families except with reference to programs explicitly designed for children e g the child tax benefit the issue of how economic policy in general affects the well being of the children themselves is relatively missing in the economics literature though children constitute nearly 25 per cent of the canadian population for example discussions of monetary policy are unlikely to consider the impact of alternative choices for children s well being debates about the merits of labour market mobility do not pay much attention to the impact of mobility on children discussions of optimal tax structures do not look at the issue from the perspective of the child 2

statistical inference based upon non linear science abstract this paper discusses testing for the presence of deterministic chaos and presents probems surrounding such research statistical inference methods arising from the study of non linear dynamics are presented along with research utilizing these methods the general goal of these inference methods is to test for evidence of hidden structures in economic time series data which may lead to a greater understanding of how the economy functions while evidence of significant non linear structure has been demonstrated in many economic and financial time series precisely how important these structures are to economic science is a relevant issue

union wage differentials in the public and private sectors a simultaneous equations specification the paper attempts to integrate new approaches to estimating union wage effects with the analysis of public private sector wage differentials estimates of the union differential in both public and private sectors allowing for the endogeneity of union status are presented the hypothesis that the recently measured rents to public sector employment primarily reflect the recent increase in unionization in that sector is examined and receives considerable empirical support there was evidence of positive selection into the union sector especially for private sector workers union status appears to be strongly influenced by the expected wage gain from joining the union sector

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

are output fluctuations transitory according to the conventional view of the business cycle fluctuations in output represent temporary deviations from trend the purpose of this paper is to question this conventional view if fluctuations in output are dominated by temporary deviations from the natural rate of output then an unexpected change in output today should not substantially change one s forecast of output in say five or ten years our examination of quarterly postwar united states data leads us to be skeptical about this implication the data suggest that an unexpected change in real gnp of 1 percent should change one s forecast by over 1 percent over a long horizon

migration of seasonal agricultural workers nearly half of all seasonal farm workers migrate at least 75 miles in a given year an expected earnings differential from migration weakly induces migration a 10 earnings differential raises the probability of migrating by slightly more than 1 this result indicates that there are substantial costs to migrating and that employers must offer large earnings premia to induce a substantial number of workers to move to their jobs some demographic groups earn substantially higher earnings by migrating these higher earnings from migration are primarily due to higher wages rather than more hours of work

rational choice and erratic behaviour in this paper we show that rational choice in a stationary environment can lead to erratic behaviour when preferences depend on experience we mean by erratic behaviour choice sequences that do not converge to a long run stationary value or to any periodic pattern early investigations of the effects of experience on choice goes back to pareto see also benhabib 1979 some keynesian theories of the consumption function incorporate the effects of experience and habit formation on current levels of consumption duesenberry 1949 modigliani 1949 and brown 1952 a general model of experience dependent choice was described in day 1970 and investigated in day and kennedy 1971 while the specific issue of the existence of stable representable long run consumer demand when tastes vary endogenously has been treated by gorman 1967 pollak 1970 1976 weizsaicker 1971 mccarthy 1974 and hammond 1976 pollak gave conditions for the representability of long run choice when the equations of preference dependence are linear and utility additive hammond in a generalization of these findings provides conditions for stable representable long run choice when preferences are acyclic a condition which in essence assures convergence to a long run choice

are economic time series asymmetric over the business cycle it has long been argued that major cyclical variables such as the unemployment rate display an asymmetric behavior over various phases of the business cycle the paper provides a statistical test for this hypothesis using the framework of finite state markov processes i implement a test to see if the behavior of the unemployment rate is characterized by sudden jumps and slower drops it is argued that the framework provided in the paper can also be used to test other sample path properties of economic time series

sequential migration theory and evidence from peru abstract the standard human capital model of labor migration has been successful in explaining several empirical regularities of the migration process however there are a number of empirical facts that have not yet been explained or empirically tested among them that migrants usually perform more than one move in their lifetime return migration accounts for a very important share of total migration rates and there is a high positive correlation between in and out migration rates in the more advantageous regions this paper presents both a simple model explaining these facts and an empirical analysis using data from peru

the impact of wage differentials on choosing to work in agriculture based on a model of industry choice and wage determination a 1 increase in the relative wage in agriculture increases the probability that a nonurban male with no more than a ninth grade education works in agriculture by 3 37 at the sample mean and by 1 3 when averaged over the entire sample a 10 increase in wages may increase the proportion of those males who choose to work in agriculture by nearly a quarter

mobility and the return to education testing a roy model with multiple markets self selected migration presents one potential explanation for why observed returns to a college education in local labor markets vary widely even though u s workers are highly mobile to assess the impact of self selection on estimated returns this paper first develops a roy model of mobility and earnings where workers choose in which of the 50 states plus the district of columbia to live and work available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process this paper develops an alternative econometric methodology that combines lee s 1983 parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models e g ahn and powell 1993 the resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems the empirical work which uses 1990 u s census data confirms the role of comparative advantage in mobility decisions the results suggest that self selection of higher educated individuals to states with higher returns to education generally leads to upward biases in ols estimates of the returns to education in state specific labor markets while the estimated returns to a college education are significantly biased correcting for the bias does not narrow the range of returns across states consistent with the finding that the corrected return to a college education differs across the u s the relative state to state migration flows of college versus high school educated individuals respond strongly to differences in the return to education and amenities across states

are there asymmetries of nonlinearities in uk output this paper investigates whether quarterly post war uk output growth contains either asymmetries or nonlinearities through subjecting the series to a variety of diagnostic testa and by fiting various nonlinear business cycle models no evidence is uncovered of any form of asymetric or nonlinear departure from the pure random walk with drift model of output

imperfect information screening and the costs of informal lending a study of a rural credit market in pakistan many governments have perceived the rural moneylender as usurious this article takes a first step toward directly testing the validity of this view in a study of services costs and charges of fourteen informal market moneylenders and their clients in chambar pakistan the article examines whether the high implicit interest rates charged reflect the actual costs of operating in that market estimates of the resource costs incurred by informal lenders for screening pursuing delinquent loans overhead and cost of capital including unrecoverable loans suggest that lenders charges are equal to their average cost of lending but exceed their marginal cost this finding is consistent with the view that the informal credit market is characterized by excess capacity and monopolistic competition in the presence of imperfect information

the new economics of labor migration this paper reviews selected theoretical and empirical developments in the field of labor migration economics the migration behavior of individuals differs in accordance with their perceived relative deprivation those who are relatively more deprived tend to have stronger incentive to migrate than those who are relatively less deprived moreover a reference group characterized by more income inequality is likely to generate more relative deprivation highly skilled workers are also more likely to migrate migration decisions are often made jointly by the migrant and nonmigrant with a contractual arrangement regarding the sharing of costs and returns the exchange of commitments to share income provides coinsurance of particular interest are the determinants of the speed of adoption of migration as an innovation and the characteristics associated with the delay in the adoption of innovation new econometric techniques including techniques for the analysis of qualitative dependent variables techniques that correct for sample selection bias and those for the analysis of longitudinal data have substantially benefited empirical research in this area new methods that can correct for the biased estimate of the wages particular individuals would receive at 2 or more locations at the same point in time allow researchers to test locational decsion making models estimates of these structural models of labor migration support the hypothesis that individuals respond to income incentives in making the decsion to migrate further research is needed on the pazzling observation that migrant workers earn less than native born workers with similar characteristics during the 1st few years after migration but more thereafter other topics that need further research include the macroeconomic effects of migration the microeconomic and macroeconomic relationships between aging and labor migration and the migration behavior of dual earner families

asymmetry in the business cycle evidence from the australian labour market abstract cyclical asymmetry has been recognised as a non linear phenomenon in recent studies examining unemployment rate time series the probalistic structure of such time series is different during upswings and downswings and models should reflect this change in structure by incorporating non linearities to allow for the switching in optimising behaviours between the different phases in this paper we use a number of established and new tests for identifying nonlinearities of different types as they occur in first differenced time series of the seasonally adjusted monthly australian aggregate and regional unemployment rates after identifying whether nonlinearity of a particular form is present in a given time series the appropriate non linear or linear model is fitted and the model analysed for cyclical behaviour

two sides of the same rupee comparing demand for microcredit and microsaving in a framed field experiment in rural pakistan standard models often predict that people should either demand to save or demand to borrow but not both we hypothesise instead that saving and borrowing among microfinance clients are substitutes satisfying the same underlying demand for a regular schedule of deposits and a lump sum withdrawal we test this using a framed field experiment among women participating in group lending arrangements in rural pakistan the experiment inspired by the rotating structure of a rosca involves randomly offering credit products and savings products to the same subject pool we find high demand both for credit products and for savings products with the same individuals often accepting both a credit product and a savings product over the three experiment waves this behavior can be rationalised by a model in which individuals prefer lump sum payments for example to finance a lumpy investment and in which individuals struggle to hold savings over time we complement our experimental estimates with a structural analysis in which different types of participants face different kinds of constraints our structural framework rationalises the behaviour of 75 of participants of these rationalised participants we estimate that two thirds have high demand for lump sum payments coupled with savings difficulties these results imply that the distinction between microlending and microsaving may be largely illusory participants value a mechanism for regular deposits and lump sum payments whether that is structured in the credit or the debt domain

on migration and risk in ldcs the authors develop the hypothesis that aversion to risk rather than expectations of higher income is the primary motivation for rural urban migration in developing countries this hypothesis maintains that an optimizing risk averse small farmer family will try to place a family member in the urban sector in order to diversify its income portfolio an additional hypothesis related to risk is also considered at the individual rather than the family level annotation

who leaves deciphering immigrant self selection from a developing country abstract using a novel data set from a developing country the federated states of micronesia fsm i analyze an emigration flow to the united states that has no legal barriers to entry and contains detailed information on the immigrant at home and in the united states i find that highly educated workers relative to the home country average have the highest likelihood of migrating from the fsm to the united states i also compare the premigration wages for the migrants and an observationally equivalent matched nonmigrant group and find that there is a positive and statistically significant difference between the two groups indicating that immigrants are also positively selected on unobserved characteristics the observed selection is consistent with the relatively large differences in home country and destination skill prices at the highest skill levels information on the immigrants characteristics before migration is central to my analysis of determining the nature of immigrant self selection on

earnings by language group in quebec in 1980 and emigration from quebec between 1976 and 1981 between 1976 and 1981 many pople moved out of quebec especially anglophones to the extent that a persons decision to stay or to move may be related to earnings prospects earnings comparisons with individuals who lived in quebec in 1981 may suffer from a selection bias this paper analyses emigration from quebec and earnings with a two equation model using a sample of men drawn from the from the 1981 canadian census it is found that a selection bias is indeed present for anglophones and that the returns to learning french may be underestimated when that bias is ignored excerpt

migration and the public sector a survey charney a h 1993 migration and the public sector a survey reg studies 27 3133 326 a review of the existing literature on human migration reveals relatively few studies that explicitly examine the relationships between public policy decisions and human migration flows the surveyed literature includes studies of national policies such as defence spending migration subsidies and intergovernmental transfers as well as sub national policies such as welfare and unemployment benefits state and local taxes education and other public services suggestions for incorporating public sector information into existing migration analysis frameworks and further areas of research are provided charney a h 1993 la migration et le secteur public une etude reg studies 27 313 326 faire la critique de la documentation disponible sur la migration humaine laisse voir que rares sont les etudes traitant explicitement des rapports entre la politique d etat et les flux migratoires la documentation examinee c

cyclical patterns in the variance of economic activity this article models the conditional mean and variance of real gross national product gnp and its components using asymmetric exponential generalized autoregressive conditional hetero scedasticity a model previously applied only to financial variables the results imply that the variance of real gnp is higher following negative innovations than positive innovations and that this asymmetry arises in the cyclically sensitive sectors further evidence links this asymmetry to the phase of the business cycle the conditional variance appears to be largest around business cycle troughs in addition shocks to the conditional variance of gnp and its components typically persist for long periods the evidence of asymmetry in conditional variance is robust to a variety of alternative specifications

the migration of young adults from non metropolitan counties this article examines young adult migration from non metropolitan counties to either different non metropolitan counties or to metropolitan areas the results show that expected gains in initial earnings provide young entrants to the labor force with a marked incentive to migrate from their non metropolitan counties of origin initial earnings gains stem in part from higher returns to schooling in both metropolitan areas and other non metropolitan counties the propensity to migrate is also sensitive to the costs of migration which in turn are correlated with paternal education and the local presence of extended family copyright 2001 oxford university press

macro economic effects of changes in bank interest rates simulation results for south korea abstract we use an empirical macro econometric model of korea to simulate the impact of bank interest rate changes this model includes a very detailed sub model of the financial sector plus in addition to the usual demand side transmission channels of monetary policy a link between the financial sector and the supply side of the real part of the economy via the cost of financing working capital cavallo effect increases in time deposit rate are shown to be contractionary in the short run because the portfolio shifts they trigger tighten credit conditions and cause higher costs of financing working capital people shift out of the curbmarket rather than out of cash the higher cost of financing working capital also pushes up inflation in the first quarter after the change making the increase in td rates stagflationary this effect dies out quickly however the persistence of the loss in output is shown to depend on whether the commercial banks are allowed to play their intermediary role or not if credit limits prevent the passing through into bank loans of the influx of time deposits caused by the higher rates substantial and persistent real output losses and decreased private investment were shown to result

the effect of redistribution on migration evidence from the israeli kibbutz this paper tests a key theoretical prediction of public finance that local redistribution induces sorting of the population so that less productive individuals are located in communities with more redistribution specifically i use a longitudinal data set to test whether and to what extent the intensive redistribution practiced by israeli kibbutzim encourages exit of more productive individuals and entry of less productive ones the findings support the theoretical prediction kibbutz leavers are more skilled than both stayers and other rural migrants and they earn higher wages upon exit than observably similar city natives and other migrants in contrast individuals who earn lower wages in the city are more likely to enter a kibbutz but they are not more likely to move to other rural areas these findings also support borjas hypothesis that migrants self selection depends on the difference in returns to skills between the origin and the destination

obstacles to developing indigenous small and medium enterprises an empirical assessment the article reports the results of field surveys conducted in sri lanka s leather industry and tanzania s furniture industry it outlines an approach to learning how small and medium enterprises smes perceive the impact of financial regulatory technical marketing and other input constraints and to evaluating the results in relation to other empirical indicators lack of access to finance emerges as the binding constraint for smaller less established firms in sri lanka and for all of tanzania s smes not only is informal financing limited for tanzania s firms even firms of adequate size and experience have difficulty borrowing from banks and if they do borrow have difficult relations with their lenders in tanzania regulatory and tax constraints appear largest for the smallest firms declining somewhat as firms grow because enforcement is comprehensive the bureaucratic burden of negotiating with government officials is greatest for small firms by contrast in sri lanka the regulatory burden rises with firm size because enforcement is more stringent for the larger and more visible firms constraints on physical inputs continue to inhibit sri lankan smes a legacy of excessive vertical integration by parastatals technical constraints are appraised as most significant by relatively educated entrepreneurs with some involvement in high quality market niches

introduction to the distribution of earnings and of individual output by a d roy this article summarises the lasting contribution of roy s 1950 fundamental paper roy a d 1950 the distribution of earnings and of individual output economic journal vol 60 239 pp 489 505

expectations and chaotic dynamics empirical evidence on exchange rates abstract the paper investigates the dynamic behavior of exchange rates expectations using four different currencies the test follows developments advanced by fernandez rodriguez et al fernandez rodriguez f sosvilla rivero s andrada felix j 2005 testing chaotic dynamics via lyapunov exponents journal of applied econometrics 20 911 930 the evidence however does not favor the presence of chaotic dynamics in exchange rate expectations

career migration self selection and the earnings of married men and women in the netherlands 1981 93 the relationship between career migration and earnings is studied for married men and women in the netherlands the hourly wages of married men and women who made a recent long distance move are found to be higher than those of married men and women who did not move or who moved only over a small distance this earning difference between migrants and non migrants seems to be due completely to the fact that the migrants are a favorable self selected group both with regard to their measured characteristics and with regard to their unmeasured characteristics if this favorable self selection is taken into account the male and female migrants turn out to earn significantly less than their non migrating counterparts for the males this finding suggests that before the move they were in relatively unfavorable labor market situations compared with the non migrants with the same measured and unmeasured characteristics for the females the negative effect of migration merely indicates that most long distance moves are still made for the career of their husband authors

does access to formal finance matter for welfare and inequality micro level evidence from nigeria using a treatment effects model decomposition techniques and representative household data from nigeria we study the welfare and inequality implications of access to formal finance while improving household welfare formal access to finance increases inter household inequalities despite ameliorating the inequality enhancing effect of urban residence and enhancing the inequality ameliorating effect of greater educational attainment the positive effect of access to formal finance on inequality is smaller than the effect of unobserved household characteristics indicating that welfare and equality enhancing strategies should follow a holistic approach as opposed to one focusing on one isolated policy variable at a time

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

some evidence concerning macroeconomic chaos abstract an empirical assessment of a linear stochastic perspective for canadian macroeconomic time series is presented the methods used are based on the mathematics of chaos present evidence suggests that low order deterministic chaos does not provide a satisfactory characterization of the data the absence of significant nonlinear structure for the investment and unemployment series is of particular note in light of past findings with american data the degree to which the use of a time trend can impose a pseudo structure on the data is illustrated

financial market fragmentation and reforms in ghana malawi nigeria and tanzania this article reports the findings from surveys of formal and informal institutions and their clients in ghana malawi nigeria and tanzania it investigates the hypothesis that reforming financially repressive policies would not be sufficient to overcome fragmentation of financial markets because of structural and institutional barriers to interactions across different market segments the four countries have substantially fragmented financial markets with weak linkages between formal and informal segments and interest rate differentials that cannot be adequately explained by differences in costs and risks nevertheless the relatively low transaction costs and loan losses of informal institutions indicate that they provide a reasonably efficient solution to information transaction cost and enforcement problems that exclude their clients from access to formal banking services the findings imply that financial liberalization and bank restructuring in the african context should be accompanied by complementary measures to address institutional and structural problems such as contract enforcement and information availability and to improve the integration of informal and formal financial markets

self selection and internal migration in the united states abstract within the conceptual framework of the roy model this paper provides an empirical analysis of internal migration flows using data from the national longitudinal survey of youth the theoretical approach highlights regional differences in the returns to skills regions that pay higher returns to skills attract more skilled workers than regions that pay lower returns our empirical results suggest that interstate differences in the returns to skills are a major determinant of both the size and skill composition of internal migration flows persons whose skills are most mismatched with the reward structure offered by their current state of residence are the persons most likely to leave that state and these persons tend to relocate in states which offer higher rewards for their particular skills

imperfect foresight and chaos an example of a self fulfilling mistake abstract we consider an overlapping generations economy with a single production sector and a government first we assume that the households have imperfect foresight in the sense that they cannot distinguish between the trajectories of a deterministic chaotic system and a stochastic process it is shown that mistaking a deterministic chaotic system for a stochastic one is a self fulfilling mistake because the possibility of making this mistake arises only when it is made the unique perfect foresight equilibrium is proved to exhibit simple dynamics for most parameter values finally we show that when agents apply simple econometric models to build their expectations the resulting dynamics resemble the chaotic dynamics of the imperfect foresight equilibrium under certain parameter constellations while they are close to the simple dynamics of the perfect foresight equilibrium for other parameter values

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item

nonlinear business cycle modelling abstract literature which employs nonlinearities to explain economic fluctuations commonly called business cycles is surveyed relaxation of the linearity assumption significantly increases the range of possible dynamic solution paths and introduces the possibility that business cycles are endogenously determined the dominant post war modelling strategy has been the frisch 1933 and slutsky 1937 inspired one of developing essentially log linear economic models which produce damped cycles or monotonic damping to propagate the energy provided by repeated random or autocorrelated shocks the cycle is exogenously driven since it would die out in the absence of shocks deterministic nonstochastic nonlinear models can produce a wide range of endogenous fluctuations including stable limit cycles growth cycles and chaotic output which have the appearance of random fluctuations further the same model can produce qualitatively different outputs according to starting and parameter values if the possibility of shocks to parameters is admitted then behaviour can change abruptly following shocks evidence on the existence of nonlinearities and chaos in macroeconomic time series is assessed and alternative approaches to modelling dynamic economic development related to the work of keynes marx schumpeter and shackle are discussed their ideas have not proved readily amenable to mathematical modelling but attempts to encapsulate some of them are reviewed