experimental evidence on scaling up education reforms in kenya abstract what constraints arise when translating successful ngo programs to improve public services in developing countries into government policy we report on a randomized trial embedded within a nationwide reform of teacher hiring in kenyan government primary schools new teachers offered a fixed term contract by an international ngo significantly raised student test scores while teachers offered identical contracts by the kenyan government produced zero impact observable differences in teacher characteristics explain little of this gap instead data suggests that bureaucratic and political opposition to the contract reform led to implementation delays and a differential interpretation of identical contract terms additionally contract features that produced larger learning gains in both the ngo and government treatment arms were not adopted by the government outside of the experimental sample

the case for financial laissez faire the argument for financial laissez faire or free banking is essentially very simple if free trade is generally desirable then what is wrong with free trade in the financial services sector if nothing is wrong with it the whole panoply of government intervention into the financial sector the central bank government sponsored deposit insurance and government regulation of the financial system should presumably all be abolished if there is something wrong with laissez faire on the other hand then what exactly is the problem with it why does this problem justify intervention and why does it justify the particular interventions we have such as a central bank most economists take a patently untenable position on these issues for the most part they accept the general principle of free trade but they deny that it applies to financial services yet relatively few could give a coherent defence of this position or have even thought that much about it they oppose free banking more or less instinctively as if its failings are obvious the response of course is that what is obvious is not necessarily true the history of science is full of cases where the obvious turned out to be wrong it therefore behoves us as academic economists to explore these issues more carefully and beware of assuming we already know the answers before we start before getting into detail i would like to make three general points first if free trade is good as most of us agree there must be at least a primafacie case in favour of free banking if the principle of free trade applies in general we must presume it to apply to any specific individual case unless we have clear reason to believe the contrary the onus of proof is on those who oppose free banking to demonstrate its undesirability most professional economists have the wrong priors on this issue secondly while i accept that free banking seems strange at first sight i believe this reaction mainly reflects the way we have been conditioned to think our education leads us to take certain things for granted and the need for central banking is one of them after all why else do we initially react so strongly to what is no more than the application of the generally accepted doctrine of free trade to financial services finally there is a great deal of empirical evidence on the free banking issue and this evidence is supportive of the predictions of free banking theory and in particular of its claim that unregulated banking is stable economists cannot therefore maintain that free banking has never been tried nor that it has been tried and failed the evidence also supports the predictions made by free banking theory that intervention generally weakens the financial system and causes the very problems it is ostensibly meant to cure by contrast the evidence is also inconsistent with opposing theories that have been suggested as providing justifications for central banking

sps and tbt agreements and international agricultural trade retaliation or cooperation in this article we investigate whether the brazilian notifications to the tbt and sps agreements are characterized as retaliation or as cooperation in international agricultural trade in the period 1996 2008 a generalized method of moments gmm model is used to estimate game models of bilateral trade between brazil and its major partners united states european union and japan from the viewpoint of strategic games the results suggest that the brazilian notifications are forms of retaliation against the united states and regarding the european union the best result for brazil was conciliation on the other hand if the results are interpreted as equilibria of bargaining games they suggest that brazil has great bargaining power in trade with the united states and that cooperation characterized agricultural trade between brazil and the european union in the period analyzed in the case of agricultural trade between brazil and japan only japan has characteristics of a country with significant bargaining power

occupational choice and the process of development this paper models economic development as a process of institutional transformation by focusing on the interplay between agents occupational decisions and the distribution of wealth because of capital market imperfections poor agents choose working for a wage over self employment and wealthy agents become entrepreneurs who monitor workers only with sufficient inequality however will there be employment contracts otherwise there is either subsistence or self employment thus in static equilibrium the occupational structure depends on distribution since the latter is itself endogenous we demonstrate the robustness of this result by extending the model dynamically and studying examples in which initial wealth distributions have long run effects in one case the economy develops either widespread cottage industry self employment or factory production employment contracts depending on the initial distribution in the other example it develops into prosperity or stagnation

import penetration and the politics of trade protection abstract in this paper we reconsider a key empirical prediction generated by an important class of political economy models of trade policy namely that trade protection should be higher in sectors characterized by lower import penetration we call this the standard prediction the existing empirical evidence offers little support for this prediction in this paper we argue that the standard prediction depends critically on the assumptions that trade taxes are the only policy instruments and that the government has access to non distortionary taxation we analyze a model in which the government can use quotas and vers in addition to trade taxes and raising public funds may be costly under a simple sufficient condition our model predicts that the protection level increases with import penetration both in sectors that are protected with tariffs and in sectors that are protected with quantitative restrictions

is protection for sale evidence on the grossman helpman theory of endogenous protection grossman and helpman 1994 present a theory of endogenous protection by explicitly modeling government industry interactions for which mere black box models previously existed they obtain a ramsey pricing type solution to the provision of protection which emphasizes the role of inverse import penetration ratios and import elasticities on the lobbying side the model makes predictions about lobbying competition and lobbying spending according to deadweight costs from protection the model not only makes for richer theory in terms of rigor and elegance but its predictions are directly testable whether the grossman helman model stands up to real world data is investigated in this paper predictions from both the protection side and lobbying side are tested using cross sectional u s nontariff barrier data we also compare the second generation grossman helpman model with a more traditional specification our results call for serious consideration of this model in the political economy literature

the political economy of international factor mobility we model the endogenous determination of policy towards international factor mobility in a common agency setting domestic interest groups bid for protection from the government and the incumbent politicians maximize a welfare function that depends both on domestic voters welfare and contributions collected we characterize equilibrium policies in the price space and show how the degree of complementarity among inputs determines the outcome we establish a similar result for quotas allowing for partial rent capturing for the strategic environment under consideration we also establish a general equivalence result between tariffs and quotas if capturing is complete d 2004 elsevier b v all rights reserved

trade liberalization antidumping and safeguards evidence from india s tariff reform abstract this paper is the first to use product level data to examine empirically whether countries use antidumping and safeguard exceptions to unwind commitments to lower tariffs in the face of domestic political economic pressure we focus on the case of india a country that underwent a major exogenous tariff reform program in the early 1990s and subsequently initiated substantial use of safeguard and antidumping import restrictions we first estimate structural determinants of india s import protection using the grossman and helpman 1994 model and provide evidence from its pre reform tariff data of 1990 that is consistent with the theory we then re estimate the model on the indian tariff data after the trade liberalization is complete and find that the model no longer fits a result consistent with theory and evidence provided in other settings that india s 1991 1992 imf arrangement can be interpreted as resulting in an exogenous shock to india s tariff policy however when we re estimate the model on data from 2000 2002 that more completely reflects india s cross product variation in import protection by including both its post reform tariffs and its additional non tariff barriers of antidumping and safeguard import protection the significance of the grossman and helpman model determinant estimates is restored we interpret these combined results as evidence that india unwound its commitment to reduce tariffs through use of antidumping and safeguard protection in the face of political economic pressure the estimates are also economically important and provide one explanation for separate results in the literature that the magnitude of import reduction associated with india s use of antidumping is similar to the initial import expansion associated with its tariff reform finally we interpret the implications of our results for the burgeoning research literature examining the effects of liberalization on india s micro level development

academic earmarks and the returns to lobbying abstract in this paper we estimate the returns to lobbying by universities to motivate our empirical work we develop a simple theoretical model of university lobbying for academic earmarks our statistical analysis shows that universities represented by a house appropriations committee hac or senate appropriations committee sac member spend less money on lobbying than those that are not represented in addition using instrumental variables estimations we show that universities without hac or sac representation may receive some benefit to lobbying for earmarks although in many estimations this benefit is not statistically different from zero however for universities with hac or sac representation a 10 percent increase in lobbying yields an additional 2 8 percent or 3 5 percent increase in earmarks respectively this suggests that there are large returns to lobbying for academic earmarks if a university is represented by a member of one the hac or sac but little or no return if not

insuring banks against liquidity shocks the role of deposit insurance and lending of last resort it has long been recognized that banks simultaneous provision of monitoring and liquidity services is advantageous but leaves them susceptible to liquidity shocks that may culminate in a system failure because a system failure is costly this provides a rationale for adopting arrangements including a lender of last resort and deposit insurance di to insure banks against liquidity shocks these arrangements have proven themselves very successful but they have also been the source of problems researchers have identified some of the main sources of these problems and have suggested ways to improve the design of these arrangements but there are still many issues that remain unaddressed this paper reviews the literature on the two arrangements that most countries have adopted to insure banks against liquidity shocks a lender of last resort and di and compares the design of these arrangements across countries the paper ends with a brief summary of the key lessons learned about the design of these arrangements and the issues related to them that remain unaddressed copyright blackwell publishers ltd 2006

endogenous trade policy through majority voting an empirical investigation abstract the median voter approach to trade policy determination within a heckscher ohlin framework as in mayer am econ rev 74 5 1984 970 predicts that an increase in inequality holding constant the economy s overall relative endowments raises trade barriers in capital abundant economies and lowers them in capital scarce economies we find support for this prediction using cross country data on inequality capital abundance and diverse measures of protection we perform certain robustness checks that include controlling for the effects of political rights and schooling as well as using alternative datasets on factor endowments

measuring and explaining cross country immigration policies summary the intensified international migration pressures of the recent decades prompted many developed countries to revise their immigration regulations and increase border controls however the development of these reforms as well as their effectiveness in actually managing immigration flows remain poorly understood the main reason is that migration regulations are hard to quantify which has prevented the construction of a universal measure of migration policy to fill this gap in the literature we construct an indicator of the restrictiveness of immigration entry policy across countries as well as a more comprehensive indicator of migration policy that also accounts for staying requirements and regulations to foster integration specifically we estimate a bayesian state space model to combine all publicly available data sources that are informative on migration policy this methodology allows us to account for measurement errors in the underlying indicators and increases data availability without imputations or other ad hoc manipulations the indexes that we obtain are then used to disentangle the factors determining the toughness of migration regulations our empirical framework accounts for cross country correlation in migration policies and combines elements from the median voter and interest group approach we find strong evidence of spatial correlation in particular in entry restrictiveness yet substantially less in overall immigration policy this suggests that there still remains a substantive national margin in immigration policies in particular in the less visible segments such as staying conditions and integration rights we also find indications of a global trend of increasing restrictiveness in migration entry policy after the financial crisis of 2007 08

environmentalism democracy and pollution control this paper makes two empirical contributions to the literature based on predictions generated by a lobby group model first we investigate how environmental lobby groups affect the determination of environmental policy in rich and developing countries second we explore the interaction between democratic participation and political electoral competition the empirical findings suggest that environmental lobby groups tend to positively affect the stringency of environmental policy moreover political competition tends to raise policy stringency in particular where citizens participation in the democratic process is widespread

the clash of liberalizations preferential versus multilateral trade liberalization in the european union there has been an explosion in the number of preferential trade agreements in the past decade preferential trade agreements are characterized by liberalization with respect to only a few partners and thus they can potentially clash with and retard multilateral trade liberalization despite this important concern with preferential trade agreements there is almost no systematic evidence on whether they actually affect multilateral trade liberalization the authors model the effect of preferential trade agreements on multilateral trade liberalization and show that preferential trade agreements slow down multilateral trade liberalization unless they have a common external tariff and allow for internal transfers next they use detailed data on product level tariffs negotiated by the european union in the past two multilateral trade rounds to structurally estimate their model the authors confirm the main prediction the european union s preferential trade agreements have clashed with its multilateral trade liberalization and find that the effect is quantitatively significant moreover they also confirm several auxiliary predictions of the model and provide new evidence on the political economy determinants of multilateral liberalization in the european union

public pensions and immigration policy in a democracy the paper analyzes the link between the public pension system and the immigration policy in a pay as you go system the incentives for immigration vary significantly between individuals at different lifetime periods in the framework of an overlapping generations model we show that the median voter s choice in general leads to inefficient levels of immigration the median voter neglects the effects of the externalities within the pension system on other generations an immigration policy that is not affected by the median voter s choice but instead is constitutionally determined will avoid welfare losses the expected lifetime income of each generation can be increased by applying a rule of steady immigration

protection for sale the case of oligopolistic competition and interdependent sectors in grossman helpman s 1994 canonical protection for sale pfs model political competition among industry lobbies is driven purely by their interests as consumers this paper introduces demand linkages and oligopolistic competition into the pfs framework to address the rivalry among lobbies stemming from product substitutability it shows that increased substitutability weakens the interest groups incentives to lobby and reduces tariff distortions this may explain why empirical tests of pfs find surprisingly little impact of lobbies on the government s trade policy decision the paper also analyzes endogenous lobby formation suggesting that demand linkages may adversely affect the industry decision to organize resume proteger les ventes le cas de la concurrence oligopolistique et des secteurs interdependants dans le modele canonique de grossman helpman 1994 protection for sale pfs la concurrence politique entre lobbyistes est purement alimentee par leurs interets en tant que consommateurs ce texte presente dans ce cadre d analyse les enchainements de la demande et la concurrence oligopolistique pour prendre en compte la rivalite entre lobbyistes qui derive de la substituabilite des produits on montre qu une substituabilite accrue reduit l incitation des groupes d interets a faire du lobbying et reduit les distorsions tarifaires cela peut expliquer pourquoi les tests empiriques du modele pfs ont decouvert un impact etonnamment faible des lobbies sur les decisions des gouvernements dans le monde des politiques commerciales le texte analyse aussi la formation endogene des lobbies suggerant que les enchainements de la demande peuvent affecter negativement la decision de s organiser

does educational equality increase mobility exploiting nineteenth century u s compulsory schooling laws existing evidence of educational effects on intergenerational mobility is associational this study employs early compulsory schooling laws to approach a causal estimate of the relationship between education and mobility in the context of a large scale policy change using ipums linked representative samples linked census data regression discontinuity models exploit state differences in the timing of compulsory schooling laws to estimate an intent to treat effect on intergenerational occupational mobility among white males despite increasing equality of attendance results reveal that compulsory laws initially reduced relative mobility for the first few cohorts affected by the laws among later cohorts who were required to attend the maximum years of school mobility was similar to prelaw levels school funding and other data suggest that structural lag could explain this nonlinear relationship it seems therefore that educational expansion inadvertently reduced mobility through institutional inert

rain agriculture and tariffs this paper examines whether and how rainfall shocks affect tariff setting in the agricultural sector in a model of strategic trade policy the authors show that the impact of a negative rainfall shock on optimal import tariffs is generally ambiguous depending on the weight placed by the domestic policy maker on tariff revenue profits and the consumer surplus the more weight placed on domestic profits the more likely it is that the policy maker will respond to a rainfall shortage by reducing import tariffs these findings are robust to alternative assumptions about market structure and the timing of the game using detailed panel data on applied tariffs and rainfall for 70 nations the authors find robust evidence that rainfall shortages generally induce policy makers to set lower tariffs on agricultural imports

preferential versus multilateral trade liberalization and the role of political economy abstract in this paper we analyze the effect of the freedom to pursue preferential trade liberalization permitted by article xxiv of the gatt on country s incentives to participate in multilateral negotiations and on feasibility of global free trade we present a model in which countries choose whether to participate in preferential or multilateral trade agreements under political pressures from domestic special interest groups we show that heterogeneity in political preferences across countries plays an important role in determining the relative merits of preferential and multilateral approaches to trade liberalization on one hand the opportunity to liberalize preferentially may be necessary to induce countries with strong political motivations to participate in multilateral free trade negotiations on the other hand when countries share similar political preferences multilateral free trade that would have been politically supported otherwise becomes unattainable if countries can pursue preferential liberalization

auctions or grandfathering the political economy of tradable emission permits despite the prevalence of grandfathered permits we still observe that a hybrid policy in which a fraction of initial emission permits is distributed through auctions is adopted in some cases we also observe that some polluting industries support auctioned permits and that most environmental groups support grandfathered permits this paper attempts to explain these phenomena from the perspective of political economy and investigates the conditions under which grandfathering auctions or a hybrid instrument will be the equilibrium policy by constructing a two stage lobbying game in which the type of policy instrument auction grandfathering or a hybrid instrument is determined in the first stage and then the number of permits is decided in the second stage we highlight the strategic interaction of the lobbying activities between the two stages in explaining the behavior of the lobbying groups

aggregate comparative statics abstract in aggregative games each player s payoff depends on her own actions and an aggregate of the actions of all the players many common games in industrial organization political economy public economics and macroeconomics can be cast as aggregative games this paper provides a general and tractable framework for comparative static results in aggregative games we focus on two classes of games 1 aggregative games with strategic substitutes and 2 nice aggregative games where payoff functions are continuous and concave in own strategies we provide simple sufficient conditions under which positive shocks to individual players increase their own actions and have monotone effects on the aggregate the results are illustrated with applications to public good provision contests cournot competition and technology choices in oligopoly

voting technology political responsiveness and infant health evidence from brazil this paper studies the introduction of electronic voting technology in brazilian elections estimates exploiting a regression discontinuity design indicate that electronic voting reduced residual error ridden and uncounted votes and promoted a large de facto enfranchisement of mainly less educated citizens estimates exploiting the unique pattern of the technology s phase in across states over time suggest that as predicted by political economy models it shifted government spending toward health care which is particularly beneficial to the poor positive effects on both the utilization of health services prenatal visits and newborn health low weight births are also found for less educated mothers but not for the more educated

the rise of europe atlantic trade institutional change and economic growth the rise of western europe after 1500 is due largely to growth in countries with access to the atlantic ocean and with substantial trade with the new world africa and asia via the atlantic this trade and the associatedcolonialism affected europe not only directly but also indirectly by inducing institutional change where initial political institutions those established before 1500 placed significant checks on the monarchy the growth of atlantic trade strengthened merchant groups by constraining the power of the monarchy and helped merchants obtain changes in institutions to protect property rights these changes were central to subsequent economic growth

rational expectations and the paradox of policy relevant natural experiments abstract policy experiments using large microeconomic datasets have recently gained ground in macroeconomics imposing rational expectations we examine robustness of evidence derived from ideal natural experiments applied to atomistic agents in dynamic settings paradoxically once experimental evidence is viewed as sufficiently clean to use it then becomes contaminated by ex post endogeneity measured responses depend upon priors and the objective function into which evidence is fed moreover agents policy beliefs become endogenously correlated with their causal parameters severely clouding inference e g sign reversals and non invertibility may obtain treatment control differences are contaminated for non quadratic adjustment costs constructively we illustrate how inference can be corrected accounting for feedback and highlight factors mitigating contamination

protection for sale an empirical investigation comment do contributions levels matter for endogenous protection or is the existence of a lobby sufficient are lobbies net benefits from protection identical to their contribution levels or does the level of protection simply reflect contribution levels of supporters and opponents we estimate the influence driven grossman and helpman 1994 and the tariff function findlay and wellisz 1982 models within a unified theoretical framework to examine the contrasting implications derived from these two prominent tariff formation models we find strong evidence that protection is indeed for sale the important new result is however that not only the existence of lobbies matters but also the relative size of the sectoral pro and anti protection contributions using j tests to compare the power of the models directly we cannot reject the null of correct specification of the influence driven model and find evidence of some misspecification in the tariff function model

the political economy of immigration in a direct democracy the case of switzerland abstract in this paper we analyze the determination of immigration policy in a direct democracy setting we formulate a model of voting and participation behavior integrating instrumental and expressive motivations the model is estimated using data drawn from a survey carried out after a vote in switzerland in 2000 on a popular initiative proposing to implement immigration restrictions the model enables us to recover estimates of participation costs and preferences towards immigration and analyze how these preferences are translated into actual voting outcomes the results reveal a substantial gap participation bias between attitudes towards immigration in the general population 43 favorable to restrictions and the outcome of the vote 26

disease and development the effect of life expectancy on economic growth we exploit the major international health improvements from the 1940s to estimate the effect of life expectancy on economic performance we construct predicted mortality using preintervention mortality rates from various diseases and dates of global interventions predicted mortality has a large impact on changes in life expectancy starting in 1940 but no effect before 1940 using predicted mortality as an instrument we find that a 1 percent increase in life expectancy leads to a 1 7 2 percent increase in population life expectancy has a much smaller effect on total gdp however consequently there is no evidence that the large increase in life expectancy raised income per capita

are global trade negotiations behind a fragmented world of gated globalization abstract we show that global trade negotiations can prevent global free trade in a simple model where global tariff negotiations precede sequential free trade agreements ftas we show fta formation can expand all the way to global free trade in the absence of global tariff negotiations but global free trade never emerges when global tariff negotiations precede fta formation this result arises precisely because global tariff negotiations successfully elicit concessions from negotiating countries moreover global tariff negotiations can produce a fragmented world of gated globalization where some countries form ftas that eliminate tariff barriers among themselves while outsiders continue facing higher tariffs

enfranchising your own experimental evidence on bureaucrat diversity and election bias in india this paper investigates the effects of polling station administrator diversity on elections in india using a natural experiment the random assignment of government officials to teams managing stations on election day together with surveys conducted with voters and election officers i demonstrate that changes in the religious and caste composition of officer teams impact voting at the polling station level causing shifts in coalition vote shares large enough to influence election outcomes effects are strongest when officers have greater discretion over the voting process i also provide evidence suggesting own group favoritism by election personnel as one relevant mechanism

do interest groups affect us immigration policy while anecdotal evidence suggests that interest groups play a key role in shaping immigration policy there is no systematic empirical analysis of this issue in this paper we construct an industry level dataset for the united states by combining information on the number of temporary work visas with data on lobbying activity associated with immigration we find robust evidence that both pro and anti immigration interest groups play a statistically significant and economically relevant role in shaping migration policy across sectors barriers to migration are lower in sectors in which business interest groups incur larger lobbying expenditures and higher in sectors where labor unions are more important

union membership in the united states 1973 1981 this paper reports estimates of union membership gathered from may current population surveys from 1973 to 1981 the authors present data by occupation industry selected states and smsas race gender and educational attainment the paper both extends and differs from that by freeman and medoff which presents unionism estimates for the private sector for 1968 75 to facilitate longitudinal analysis this paper reports three year moving averages of occupational and industry data and annual estimates of demographic classifications the data include public sector as well as private sector workers and they exclude workers not covered by the national labor relations act also the authors provide only union membership estimates not estimates on workers covered by union contracts this paper suggests that the percentage of all workers that are unionized in the united states remained fairly constant over the 1973 81 period

disease and development evidence from hookworm eradication in the american south this study evaluates the economic consequences of the successful eradication of hookworm disease from the american south the hookworm eradication campaign c 1910 began soon after i the discovery that a variety of health problems among southerners could be attributed to the disease and ii the donation by john d rockefeller of a substantial sum to the effort the rockefeller sanitary commission rsc surveyed infection rates in the affected areas eleven southern states and found that an average of forty percent of school aged children were infected with hookworm the rsc then sponsored treatment and education campaigns across the region follow up studies indicate that this campaign substantially reduced hookworm disease almost immediately the sudden introduction of this treatment combines with the cross area differences in pre treatment infection rates to form the basis of the identification strategy areas with higher levels of hookworm infection prior to the rsc experienced greater increases in school enrollment attendance and literacy after the intervention this result is robust to controlling for a variety of alternative factors including differential trends across areas changing crop prices shifts in certain educational and health policies and the effect of malaria eradication no significant contemporaneous results are found for adults who should have benefited less from the intervention owing to their substantially lower prior infection rates a long term follow up of affected cohorts indicates a substantial gain in income that coincided with exposure to hookworm eradication i also find evidence that eradication increased the return to schooling

import protection business cycles and exchange rates evidence from the great recession this research estimates the impact of macroeconomic fluctuations on import protection policies over 1988 q1 2010 q4 for five industrialized economies the united states european union australia canada and south korea there is evidence of a strong countercyclical trade policy response in the pre great recession period of 1988 q1 2008 q3 during which increases in domestic unemployment rates real appreciations in bilateral exchange rates and declines in the gdp growth rates of bilateral trading partners led to substantial increases in new temporary trade barriers it then applies this pre great recession empirical model to realized macroeconomic data from 2008 q4 2010 q4 and find it predicts a surge of new import protection during the great recession e g for the us and eu the model predicts new trade barriers would cover an additional 15 percentage points of nonoil imports well above the baseline level of 2 3 percent of import coverage immediately preceding the crisis finally the research examines why the realized trade policy response differed from model predictions while exchange rate movements played an important role in limiting new import protection during the great recession there is also evidence of one particularly important change in trade policy responsiveness i e in this period governments refrained from imposing new temporary trade barriers against foreign trading partners experiencing their own weak or negative economic growth

competitive banking bankers clubs and bank regulation this paper reexamines the view that banking regulation and central banking arose to counter market failures it investigates the factors that led bankers to form clubs and examines the regulations imposed by clubs on their members it suggests that such regulation is different from real world regulation and central banking and would be unlikely to arise spontaneously from free banking anyway it also suggests that this view is consistent with available evidence and compares it with the alternative views of gary gorton and donald j mullineaux 1987 and of charles a e goodhart copyright 1994 by ohio state university press

bridging trade theory and labour econometrics the effects of international migration this paper surveys current theoretical and empirical research on international migration with a particular emphasis on the links between trade theory and labour empirics

the role of importers and exporters in the determination of the u s tariff preferences granted to latin america abstract this paper investigates the role played by domestic importers and foreign exporters in improving preferential access to the domestic market to this end the framework used in this paper extends the protection for sale analysis to explicitly model the role of domestic importers and foreign exporters in the determination of preferential trade treatment the predictions of the model are tested using data on preferential trade between the united states and latin american countries the results suggest that latin american exporters and us importers lobbying efforts have a significant and important role in determining the extent of preferential access granted by the united states more interestingly these findings also show that u s importers capture a very substantial share of the rents generated by tariff preferences these results therefore shed a pessimistic view on preferential trade schemes as a reliable source of gains for developing countries

competition for foreign direct investments abstract this paper models international competition for foreign direct investment as a common agency problem using the theory of menu auctions developed by bernheim and whinston in the model national governments act as principals and a multinational corporation as the single agent governments are assumed to maximize the net wage income generated by the corporation s investment it is shown that in the equilibrium of this game a high wage country may be able to attract investment even though all countries use subsidies furthermore it is shown that a country may choose to pay the highest subsidies even if it attracts less investment than in the unsubsidized regime our framework can also be used to study interregional subsidy competition within a country

the economic returns to schooling in the west bank and gaza strip the author uses micro data from the labor force surveys conducted in the west bank and the gaza strip during 1981 91 to show that during 1981 87 wage differences between schooling groups fell by well over one half this sharp reduction is associated with large increases in the size of the educated palestinian labor force since the returns to schooling for israeli jews were stable the decline in returns to schooling for palestinians is consistent with the notion that the returns to schooling in the territories were determined largely by the forces of supply and demand in a segmented market for skilled labor copyright 1995 by american economic association

us non tariff barriers as privately provided public goods abstract the endogenous theory of protection is empirically investigated in a different light rather than emphasizing the determinants of the supply of protection the present study emperically investigates the micro level demand side behavior of firms predictions from bergstrom et al journal of public economics 1986 2 25 49 about the private provision of public goods provide a theoretical foundation for such a demand side econometric investigation if rational lobbies are observed to behave in a manner consistent with the theory of the private provision of public goods then it must be the case that they are able to influence trade policy the econometric specification is also consistent with the special interest models of olson the logic of collective action public goods and the theory of groups harvard university press 1965 stigler bell journal of economics and management science 1971 2 137 146 baron quarterly journal of economics 1989 1 45 72 and grossman and helpman american economic review 1994 84 833 850 hence evidence presented in this study from the demand side behavior of firms has the deeper implication that it validates the theory of endogenous protection an issue that is still controversial among trade theorists

how does development assistance affect collective action capacity results from a field experiment in post conflict liberia social cooperation is critical to a wide variety of political and economic outcomes for this reason international donors have embraced interventions designed to strengthen the ability of communities to solve collective action problems especially in post conflict settings we exploit the random assignment of a development program in liberia to assess the effects of such interventions using a matching funds experiment we find evidence that these interventions can alter cooperation capacity however we observe effects only in communities in which by design both men and women faced the collective action challenge focusing on mechanisms we find evidence that program effects worked through improvements in mobilization capacity that may have enhanced communities ability to coordinate to solve mixed gender problems these gains did not operate in areas where only women took part in the matching funds experiment possibly because they could rely on traditional institutions unaffected by the external intervention the combined evidence suggests that the impact of donor interventions designed to enhance cooperation can depend critically on the kinds of social dilemmas that communities face and the flexibility they have in determining who should solve them

the profits of power land rights and agricultural investment in ghana we examine the impact of ambiguous and contested land rights on investment and productivity in agriculture in akwapim ghana we show that individuals who hold powerful positions in a local political hierarchy have more secure tenure rights and that as a consequence they invest more in land fertility and have substantially higher output the intensity of investments on different plots cultivated by a given individual corresponds to that individual s security of tenure over those specific plots and in turn to the individual s position in the political hierarchy relevant to those specific plots

brain drain taxes for non benevolent governments abstract this paper investigates the welfare effects of brain drain taxes levied by non benevolent governments whereby a country collects a tax from skilled emigrants but potentially wastes a sizable portion of the revenue using a model in which taxes are chosen to maximize expected political rents i show that the availability of a brain drain tax increases a weighted sum of citizen utilities however the government s optimal brain drain tax is found to be higher than the level that maximizes this weighted sum in another model a brain drain tax is found to be desirable when governments use public good expenditures to compete for mobile residents

equilibrium bias of technology this paper presents three sets of results about equilibrium bias of technology first i show that when the menu of technological possibilities only allows for factor augmenting technologies the increase in the supply of a factor induces technological change relatively biased toward that factor meaning that the induced technological change increases the relative marginal product of the factor becoming more abundant moreover this induced bias can be strong enough to make the relative marginal product of a factor increasing in response to an increase in its supply thus leading to an upward sloping relative demand curve i also show that these results about relative bias do not generalize when more general menus of technological possibilities are considered second i prove that under mild assumptions the increase in the supply of a factor induces technological change that is absolutely biased toward that factor meaning that it increases its marginal product at given factor proportions the third and most important result in the paper establishes the possibility of and conditions for strong absolute equilibrium bias whereby the price marginal product of a factor increases in response to an increase in its supply i prove that under some regularity conditions there will be strong absolute equilibrium bias if and only if the aggregate production function of the economy fails to be jointly concave in factors and technology this type of failure of joint concavity is possible in economies where equilibrium factor demands and technologies result from the decisions of different agents

theory general equilibrium and political economy in development economics i discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations i argue that economic theory plays should play a central role in formulating models estimates of which can be used for counterfactual and policy analysis i discuss why counterfactual analysis based on microdata that ignores general equilibrium and political economy issues may lead to misleading conclusions i illustrate the main arguments using examples from recent work in development economics and political economy

politicians decision making with re election concerns abstract we study the impact of elected officials re election concerns on their decisions on whether to undertake new projects the value of a project to a jurisdiction depends in part on its elected official s uncertain ability at providing some public goods our main result is that the elected official s willingness to pay for the project differs from voters willingness to pay if the incumbent official expects to lose win the election then she is willing to pay more less than the project s total value to voters we show how our analysis can be applied to bidding wars among jurisdictions for firms

the economics of special interest politics the case of the tariff this paper investigates the interaction of politicians and special interest lobbies the goal is to model the equilibrium levels of redistributive policies such as taxes subsidies tariffs and regulatory decisions the model is applied throughout to the setting of tariffs by contributing to political campaigns special interest lobbies generate economic returns higher tariffs generate revenue for import competing industries through higher product prices higher milk support prices raise dairy farm income and so forth the lobby invests to maximize these net economic returns in evaluating their chances of election politicians weigh the favorable effects of special interest money against the unfavorable association with the lobby and the social cost of the redistributive policy section i explores the lobby s problem it describes a formalization of mancur olson s discussion of the voluntary provision of public goods and optimal contributions by lobbies to political campaigns section ii describes determination of the equilibrium tariff positions of each politician in a political campaign

protection for sale with imperfect rent capturing we extend the protection for sale framework to non tari barriers introducing partial rent capturing leads to a testable specification that bridges the gap between the grossman and helpman 1994 model and its empirical implementation where coverage ratios have been used to measure protection the econometric analysis supports our augmented specification and leads to more realistic estimates for the structural parameters of the model jel classification f13

equilibrium and efficiency of exchange rates in a silver based monetary system the cases of india and iran this paper examines the issue of equilibrium and efficiency of exchange rates in a silver based monetary system during nineteenth century india and iran the results based on co integration tests indicate a reliable long run relationship between the metallic value and the exchange value of currencies in a silver based monetary standard our results also validate the necessary and sufficient conditions of the efficient market hypothesis

sell low and buy high arbitrage and local price effects in kenyan markets large and regular seasonal price fluctuations in local grain markets appear to offer african farmers substantial intertemporal arbitrage opportunities but these opportunities remain largely unexploited small scale farmers are commonly observed to sell low and buy high rather than the reverse in a field experiment in kenya we show that credit market imperfections limit farmers abilities to move grain intertemporally providing timely access to credit allows farmers to buy at lower prices and sell at higher prices increasing farm revenues and generating a return on investment of 29 to understand general equilibrium ge effects of these changes in behavior we vary the density of loan offers across locations we document significant effects of the credit intervention on seasonal price fluctuations in local grain markets and show that these ge effects shape individual level profitability estimates in contrast to existing experimental work the results indicate a setting in which microcredit can improve firm profitability and suggest that ge effects can substantially shape microcredit s effectiveness in particular failure to consider these ge effects could lead to underestimates of the social welfare benefits of microcredit interventions

substitutability and protectionism latin america s trade policy and imports from china and india this article examines the trade policy response of latin american governments to the rapid growth of chinese and indian exports in world markets to explain more protection in sectors where a large share of imports originates in china and india the protection for sale model is extended to allow for region specific degrees of substitutability between domestic and imported varieties of a good the results suggest that more protection toward chinese and indian goods can be explained by the higher substitutability of chinese and indian goods with domestic varieties the data support the model which performs better than the original protection for sale framework in explaining latin america s structure of protection

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

on the political economy of immigration the authors study how immigration policies that impose capital and skill requirements would be determined under majority voting when native agents differ in their wealth holdings and vote to maximize their income the results of the model calculations indicate that the native population will be polarized between those who would like an immigration policy to maximize the domestic capital labor ratio and those who would like an immigration policy that would minimize it

protection for sale or surge protection this paper asks whether the results obtained from using the standard approach to testing the influential grossman and helpman protection for sale pfs model of political economy might arise from a simpler setting a model of imports and quotas with protection occuring in response to import surges but only for organized industries is simulated and shown to provide parameter estimates consistent with the protection for sale framework this suggests that the standard approach may be less of a test than previously thought

tax burden and migration a political economy theory and evidence abstract the extent of taxation and redistribution policy is generally determined as a political economy equilibrium by a balance between those who gain from higher taxes transfers and those who lose the standard theory of the size of government in a representative democracy links the tax burden to measures of the pre tax income inequality we develop in this paper a theory which encompasses the existing literature and provides a complementary channel linking the tax burden in the presence of migration to the fiscal leakage from native born to the migrants in a stylized model of migration and human capital formation we show somewhat against the conventional wisdom that low skill immigration can lead to a lower tax burden and less redistribution than would be the case with no immigration even though migrants naturally join the pro tax transfer coalition data on 11 european countries over the period 1974 1992 are consistent with the implications of the theory a higher share of low education immigrants in the population leads to a lower tax rate on labor income and less generous social transfers

free banking and information asymmetry a traditional argument against free banking is that it will collapse because of information externalities it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy this paper shows that in a separating equilibrium a higher quality bank offers a lower deposit rate and holds a smaller proportion of risky loans than a lower quality bank to signal its underlying quality hence free banking is not inherently unstable the empirical results for the hong kong banking system during 1964 65 are consistent with the hypothesis of a separating equilibrium

wage gains associated with height as a form of health human capital height is consulted as a latent indicator of early nutrition and lifetime health status height is observed to increase in recent decades in populations where per capita national income has increased and public health activities have grown height is determined by genetic make up and realized in part through satisfactory nutrition and health related care and conditions alternative instrumental variables iv are explored which proxy price and income constraints which are expected to influence the latter reproducible human capital investments in height i report ols and iv estimates of the partial effect of height on log hourly wages in recent national surveys from three countries ghana brazil and the united states i conclude that the human capital productivity effect of height estimated by parent education ivs in the us and ghana are many times larger than the ols estimates and in ghana and brazil the regional price ivs estimates also imply a substantially larger human capital wage effects of height compared with the ols estimates the ols estimates of height effects on wages are dominated by the genetic variation in height and appear to understate substantially the human capital returns to health and nutrition inputs which increase adult height this abstract was borrowed from another version of this item

free banking and monetary control despite growing interest in competitive payments systems and the continuing progress of bank deregulation relatively little is known about the macroeconomic implications of completely unregulated or free banking its advocates view free banking where competing banks freely issue monetary liabilities redeemable in base money 1 as a means for depoliticising the money stock by replacing public holdings of government money with private bank money while limiting changes in the monetary base such a programme begs many crucial questions how would the unregulated stock of bank money be determined would free banking enhance or reduce macroeconomic stability compared to regulated banking what implications would free banking have for the proper conduct of monetary policy lawrence h white i 984 ch i employs a model of a free banking system to answer some of these questions however because it concerns free banklng as practised in scotland in the nineteenth century white s model assumes an open economy operating in an international gold standard where the price level is given and there is no such thing as monetary policy in its modern sense were free banking to reemerge today it would probably be based not on a gold standard but on irredeemable paper fiat base money issued by a former or extant central bank under this form of free banking the price level is no longer given and conventional monetary policy questions remain relevant in particular would free banking on a fiat standard simplify or complicate the control of nominal variables including the price level and nominal income would it be easier or more difficult to adhere to a simple monetary rule what would happen if the stock of base money were frozen as a means for ruling out discretion altogether answers to such questions require an analysis of determinants of the money stock in a closed free banking system with a centrally determined stock of base money here i offer some preliminary answers based upon carl christ s i 989 formal interpretation of selgin i988 the features of free banking stressed here because they bear most on questions of monetary control include i the freedom of banks to issue notes as well as deposits where banknotes are a more

migration and pension with international capital mobility abstract being relatively low earners migrants are net beneficiaries of the welfare state therefore in a static set up migration may be resisted by the entire native born population however it is shown that in a dynamic set up with a pension system which is an important pillar of any welfare state migration is beneficial to all income high and low and all age old and young groups

can we obtain realistic parameter estimates for the protection for sale model in the grossman and helpman 1994 model of endogenous trade protection sectoral lobbies try to influence an incumbent government that maximizes a weighted sum of political contributions and aggregate welfare we empirically investigate this model using u s and turkish data our specification is more tightly tied to theory than those in existing studies additionally we assume all specific factor owners to be organized into different lobbies these changes validated by hypothesis tests yield more realistic parameter estimates of the government s concern for aggregate welfare and of the fraction of population organized into lobbies peut on obtenir des calibrations realistes des parametres du modele de protection en vue d augmenter les ventes dans le modele de protection commerciale endogene de grossman helpman 1994 des lobbys sectoriels tentent d influencer un gouvernement en place qui maximise une somme ponderee des contributions politiques et du bien etre collectif les auteurs utilisent ce modele pour analyser les donnees pour les etats unis et la turquie on specifie le modele d une maniere qui serre de plus pres la theorie que ce qui a ete le cas dans les etudes anterieures de plus on assume que tous les proprietaires de facteurs de production specifiques sont organises en lobbys differents ces changements valides par des tests d hypotheses engendrent des estimations plus realistes des parametres de la fonction d interet du gouvernement pour le bien etre collectif et pour la fraction de la population organisee en lobbys

does free public health care increase utilization and reduce spending heterogeneity and long term effects zambia removed user fees in publicly supported government and faith based health facilities in 54 out of 72 districts in 2006 this was extended to rural areas of previously unaffected districts in 2007 the natural experiment provided by the step wise implementation of the removal policy and five waves of nationally representative household survey data enables us to study the impact of the removal policy on utilization and household health expenditure we find that the policy increased overall use of health services in the short term and the effects were sustained in the long term the increases were higher for individuals whose household heads were unemployed or had no or less education the policy also led to a small shift in care seeking from private to publicly supported facilities an effect driven primarily by individuals whose household heads were either formally employed or engaged in farming the likelihood of incurring any spending reduced although this weakened slightly in the long term at the same time there was an upward pressure on conditional health expenditure i e expenditure was higher after removal of fees for those who incurred any spending hence total unconditional household health expenditure was not significantly affected

who is against a common market this paper develops a theory of the endogenous formation of a common market in a three country two factor political economy model in the status quo home and foreign implement nondiscriminatory policies toward international factor flows in order to maximize the domestic median voter s welfare then the two countries simultaneously hold referenda on a common market initiative leading to the removal of the pre existing policies for factor flows between the member countries while no coordination is imposed on policies vis a vis the rest of the world several interesting results emerge in a common market the returns on factors moving between the members are more likely to increase the larger is the import demand of one country relative to the factor supply of the exporting partner factors that do not relocate are more likely to see their returns decrease when flows are large and import demands are inelastic importantly for the common market to emerge as an equilibrium some factors must continue to experience enhanced protection when the integration process is completed this result highlights the potential tension between social desirability and the political feasibility of the integration process jel f1 f2 p16

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

endogenous lobby formation and endogenous protection a long run model of trade policy determination this paper provides a theory of lobby formation within a framework in which trade policy is determined through political contributions under certain conditions free trade turns out to be an equilibrium outcome either when the government has a high affinity for political contributions or when it cares a great deal about social welfare moreover greater inequality in asset distribution results in a greater number of lobbies and in most cases more protection for each of these lobbies furthermore industries with higher levels of capital stock fewer capitalists more inelastic demand and smaller geographical dispersion are the ones that get organized

does foreign aid increase foreign direct investment summary we examine the idea that aid and foreign direct investment fdi are complementary sources of foreign capital we argue that the relationship between aid and fdi is theoretically ambiguous aid raises the marginal productivity of capital when used to finance complementary inputs like public infrastructure and human capital investments but aid may crowd out private investments when it comes in the shape of pure physical capital transfers empirically we find that aid invested in complementary inputs draws in fdi while aid invested in physical capital crowds it out the paper shows that the composition of aid matters for its overall level of efficiency

the medium run effects of educational expansion evidence from a large school construction program in indonesia this paper studies the medium run consequences of an increase in the rate of accumulation of human capital in a developing country from 1974 to 1978 the indonesian government built over 61 000 primary schools the school construction program led to an increase in education among individuals who were young enough to attend primary school after 1974 but not among the older cohorts 2sls estimates suggest that an increase of 10 percentage points in the proportion of primary school graduates in the labor force reduced the wages of the older cohorts by 3 8 10 and increased their formal labor force participation by 4 7 i propose a two sector model as a framework to interpret these findings the results suggest that physical capital did not adjust to the faster increase in human capital

building state capacity evidence from biometric smartcards in india anti poverty programs in developing countries are often dicult to implement in particular many governments lack the capacity to deliver payments securely to targeted beneciaries we evaluate the impact of biometrically authenticated payments infrastructure smartcards on beneciaries of employment nregs and pension ssp programs in the indian state of andhra pradesh using a large scale experiment that randomized the rollout of smartcards over 158 subdistricts and 19 million people we nd that while incompletely implemented the new system delivered a faster more predictable and less corrupt nregs payments process without adversely aecting program access for each of these outcomes treatment group distributions rst order stochastically dominated those of the control group the investment was cost eective as time savings to nregs beneciaries alone were equal to the cost of the intervention and there was also a signicant reduction in the leakage of funds between the government and beneciaries in both nregs and ssp programs beneciaries overwhelmingly preferred the new system for both programs overall our results suggest that investing in secure payments infrastructure can signicantly enhance state capacity to implement welfare programs in developing countries

electoral accountability and corruption evidence from the audits of local governments we show that political institutions affect corruption levels we use audit reports in brazil to construct new measures of political cor ruption in local governments and test whether electoral account ability affects the corruption practices of incumbent politicians we find significantly less corruption in municipalities where mayors can get reelected mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives these effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punish ment is lower overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician s corrupt behavior jel d72 k42 017

dynamics and stability of constitutions coalitions and clubs a central feature of dynamic collective decision making is that the rules that govern the procedures for future decision making and the distribution of political power across players are determined by current decisions for example current constitutional change must take into account how the new constitution may pave the way for further changes in laws and regulations we develop a general framework for the analysis of this class of dynamic problems under relatively natural acyclicity assumptions we provide a complete characterization of dynamically stable states as functions of the initial state and determine conditions for their uniqueness we show how this framework can be applied in political economy coalition formation and the analysis of the dynamics of clubs the explicit characterization we provide highlights two intuitive features of dynamic collective decision making 1 a social arrangement is made stable by the instability of alternative arrangements that are preferred by sufficiently many members of the society 2 efficiency enhancing changes are often resisted because of further social changes that they will engender

the political economy of international trade and factor mobility abstract free trade in goods and factors is efficient when we move away from economic theory and consider the policies actually followed by governments we observe distortions being implemented both on goods and factors trades it is natural then to question the relative merits of the two types of intervention and the normative literature has provided only partial answers we ask then why is the international flow of goods and factors not free and the political economy literature has looked at the two issues only separately in studying the determination of trade policy a theoretical paradigm has emerged focusing on the role of influence driven contributions this approach has also found strong empirical support the literature on the political economy of factor mobility on the other hand is fragmented distortions in labor and capital flows are typically the subject of different studies and only recently a unified framework has been proposed more work has to be done in this area as well as in integrating the political economy of trade and factor movements

coordination failures in immigration policy abstract we propose a theoretical framework for analyzing the problems associated to unilateral immigration policy in receiving countries and for evaluating the grounds for reform of international institutions governing immigration we build a model with multiple destination countries and show that immigration policy in one country is influenced by measures adopted abroad as migrants choose where to locate in part in response to differences in immigration policy this interdependence gives rise to a leakage effect of immigration policy an international externality well documented in the empirical literature in this environment immigration policy becomes strategic and unilateral behavior may lead to coordination failures where receiving countries are stuck in welfare inferior equilibria we then use an equilibrium refinement to show that the selected equilibrium differs from the pareto dominant one and argue that multilateral institutions that help receiving countries make immigration policy commitments would address this inefficiency

accounting for the effect of health on economic growth i use microeconomic estimates of the effect of health on individual outcomes to construct macroeconomic estimates of the proximate effect of health on gdp per capita i employ a variety of methods to construct estimates of the return to health which i combine with cross country and historical data on height adult survival rates and age at menarche using my preferred estimate eliminating health differences among countries would reduce the variance of log gdp per worker by 9 9 percent and reduce the ratio of gdp per worker at the 90th percentile to gdp per worker at the loth percentile from 20 5 to 17 9 while this effect is economically significant it is also substantially smaller than estimates of the effect of health on economic growth that are derived from cross country regressions

do countries free ride on mfn abstract the most favored nation mfn clause has long been suspected of creating a free rider problem in multilateral trade negotiations to address this issue we model multilateral negotiations as a mechanism design problem with voluntary participation we show that an optimal mechanism induces only the largest exporters to participate in negotiations over any product thus providing a rationalization for the principal supplier rule we also show that through this channel equilibrium tariffs vary according to the herfindahl hirschman index of export shares higher concentration in a sector reduces free riding and thus causes a lower tariff estimation of our model using sector level tariff data for the u s provides strong support for this relationship

protectionism versus risk in screening for invasive species abstract i examine the extent to which enforcement of a biosecurity import restriction us border inspections for foreign pests and diseases is used as a protectionist trade barrier the parameters of a structural model of border inspection are estimated using a detailed dataset documenting the outcome of us agricultural border inspections i find that inspections are conducted in a manner that places an implied welfare weight on domestic producers relative to consumers ranging from 1 to 1 63 i also find evidence that the inspection agency takes terms of trade into account when inspecting agricultural imports these results suggest that border inspections are used as a protectionist non tariff barrier

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

a political economic analysis of labor migration and income redistribution we present a two country political economic model of income redistribution with internationally mobile labor migration can be exogenous and or endogenous i e determined by labor income differentials political influence is determined by the size and homogeneity of the groups where the latter can be affected by immigration we show that immigration can increase the transfers to and the income of the mobile group we also investigate the possibility of migration regulation tax transfer policy competition and coordination and finally coordination of regulation policies it is shown that the selection of any of those regimes will depend on the particular distribution of political influence among the relevant social groups in the two countries

what drives u s immigration policy evidence from congressional roll call votes abstract immigration is today one of the most hotly debated policy issues in the united states despite marked divergence of opinion even within political parties several important reforms have been introduced in the post 1965 era the purpose of this paper is to carry out a systematic analysis of the drivers of the voting behavior of us representatives on immigration policy in the period 1970 2006 and in particular to assess the role of economic factors at the district level our findings suggest that representatives from more skilled labor abundant districts are more likely to support an open immigration policy towards the unskilled whereas the opposite is true for representatives from more unskilled labor abundant districts this evidence is robust to the introduction of an array of additional economic and non economic characteristics of the districts and suggests that a simple factor analysis model can go a long way in explaining voting on immigration policy