skill biased technological change and rising wage inequality some problems and puzzles the recent rise in wage inequality is usually attributed to skill biased technical change sbtc associated with new computer technologies we review the evidence for this hypothesis focusing on the implications of sbtc for overall wage inequality and for changes in wage differentials between groups a key problem for the sbtc hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology sbtc also fails to explain the evolution of other dimensions of wage inequality including the gender and racial wage gaps and the age gradient in the return to education

the returns to schooling a selectivity bias approach with a continuous choice variable the essence of selection bias is that we do not observe nonoptimal choices this applies whether the choice variable is discrete or continuous this paper extends the selection bias methodology to the case where the choice variable is continuous and the choice set is ordered the leading practical application of this analysis is the schooling choice problem schooling is treated as a continuous choice variable and selectivity corrected rates of return are estimated the findings suggest selectivity is of considerable importance and support the comparative advantage hypothesis of willis and rosen 18

distributing the green cards permanent residency and personal income taxes after the immigration reform and control act of 1986 abstract we explore how permanent residency affects personal income tax participation and net personal income tax payments using variation from the immigration reform and control act of 1986 irca which authorized the largest u s amnesty to date we exploit the timing and geographic unevenness of irca s legalization programs alongside newly digitized data on personal income taxes in california home to the majority of applicants green cards induced the previously unauthorized to file state income tax returns at rates comparable to other california residents while the new returns generated little additional revenue through the end of the 1990s they did raise the incomes of families with children through new claims of the federal earned income tax credit

the relative productivity hypothesis of industrialization the american case 1820 to 1850 a two sector model is used to explore the role of the agricultural sector in the process of industrialization our hypothesis is that areas industrialize earlier where the wages for females and children relative to those for adult males are initially low furthermore the lower this relative productivity of females and children in the pre industrial economy the proportionately more will their relative wages increase and the higher will be the ratio of manufactured to agricultural goods the model is used to interpret the conditions that fostered the rapid industrialization of the american northeast but not the south from 1820 to 1850

it based technical change and job instability we investigate the impact of it diffusion on the stability of employment we document the evolution of different components of job instability over a panel of 348 cities in france from the mid 1970s to the early 2000s the evidence goes against the view that the diffusion of it has spurred job instability yet analysing long term differences in the occupational structure we find that it diffusion has increased the share of high skill occupations at the expense of low skill occupations this is consistent with french firms reliance on their internal labour market to meet the new skill requirements associated with it diffusion

remittances financial development and growth abstract despite the increasing importance of remittances in total international capital flows the relationship between remittances and growth has not been adequately studied this paper studies one of the links between remittances and growth in particular how local financial sector development influences a country s capacity to take advantage of remittances using a newly constructed dataset for remittances covering about 100 developing countries we find that remittances boost growth in countries with less developed financial systems by providing an alternative way to finance investment and helping overcome liquidity constraints this finding controls for the endogeneity of remittances and financial development does not depend on the particular measure of financial sector development used and is robust to a number of robustness tests including threshold estimation we also provide evidence that there could be an investment channel trough which remittances can promote growth especially when the financial sector does not meet the credit needs of the population

a global assessment of human capital mobility the role of non oecd destinations discussions of high skilled mobility typically evoke migration patterns from poorer to wealthier countries which ignore movements to and between developing countries this paper presents for the first time a global overview of human capital mobility through bilateral migration stocks by gender and education in 1990 and 2000 and calculation of nuanced brain drain indicators building on newly collated data the paper uses a novel estimation procedure based on a pseudo gravity model then identifies key determinants of international migration and subsequently uses estimated parameters to impute missing data non oecd destinations account for one third of skilled migration while oecd destinations are declining in relative importance

a theory of remittances as an implicit family loan arrangement abstract the idea of an implicit and informal loan agreement between family members to explain migrants remittances is not new but its implications have not been fully explored in the theoretical literature many empirically testable propositions may be derived from this hypothesis when trying to explain why emigrants remit what the time profile of remittances is how it depends on the intent to stay on the expected length of stay and on interest rates what use people make of remittances and how the home family consumption behavior is affected by the economic prospects in the receiving country furthermore this theory yields many interesting policy prescriptions for less developed countries wishing to maximize the remittance flow from emigrants

remittances and chain migration longitudinal evidence from bosnia and herzegovina abstractmost of the literature on remittances focuses on their implications for the welfare of family members in the country of origin and disregards their role as facilitator of chain migration we address this issue with the use of longitudinal data from bosnia and herzegovina one of the primary exporters of migrants and recipients of remittances in the world we find that remittances have a significant positive impact on the migration prospects of their recipients better endowed people are most likely to migrate which highlights a potential negative implication of migration and remittances

workers machines and economic growth this paper models technology adoption as replacing workers by machines which perform the same job in the production process the paper shows that such modelling of technology adoption affects significantly the analysis of economic growth this model can explain large and persistent international differences in output levels and growth rates caused by small differences in underlying parameters

the polarization of the u s labor market this paper analyzes a marked change in the evolution of the u s wage structure over the past fifteen years divergent trends in upper tail 90 50 and lower tail 50 10 wage inequality we document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years since 1980 wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987 but it has ceased growing and for some measures actually narrowed since the late 1980s furthermore we find that occupational employment growth shifted from monotonically increasing in wages education in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage education distribution in the 1990s we characterize these patterns as the u201cpolarization u201d of the u s labor market with employment polarizing into high wage and low wage jobs at the expense of middle wage work we show how a model of computerization in which computers most strongly complement the non routine abstract cognitive tasks of high wage jobs directly substitute for the routine tasks found in many traditional middle wage jobs and may have little direct impact on non routine manual tasks in relatively low wage jobs can help explain the observed polarization of the u s labor market this abstract was borrowed from another version of this item

should the personal computer be considered a technological revolution evidence from u s metropolitan areas the introduction and diffusion of personal computers are widely viewed as a technological revolution using u s metropolitan area level panel data this paper asks whether links between pc adoption educational attainment and the return to skill conform to a model of technological revolutions in which the speed and extent of adoption are endogenous the model implies that cities will adjust differently to the arrival of a more skill intensive means of production with the returns to skill increasing most where skill is abundant and its return is low we show that the cross city data fit many of the predictions of the model during the period 1980 2000 the pc diffusion era

remittances and the changing composition of migration remittances are seen as a sustainable source of funding for developing countries during recent decades the level of remittances has increased dramatically and the recent financial crisis has scarcely affected the trend in the same period the structure of international migration flows has changed these flows are now characterised by a growing feminisation and by increasing skill levels in this article we establish a link between these two facts and assess the effect of the change in the structure of migration on the level of remittances we use a recent data set on bilateral remittances and estimate a gravity model in which the gender and education background of migration flows are accounted for we find that remittances are positively associated with the share of female and college educated migrants in particular we argue that the rising share of college educated women has had a significant impact on the increase in remittances

remittances transaction costs and informality abstract recorded workers remittances to developing countries reached 167 billion in 2005 bringing increasing attention to these flows as a potential tool for development in this paper we explore the determinants of remittances and their associated transaction costs we find that recorded remittances depend positively on the stock of migrants and negatively on transfer costs and exchange rate restrictions in turn transfer costs are lower when financial systems are more developed and exchange rates less volatile the negative impact of transactions costs on remittances suggests that migrants either refrain from sending money home or else remit through informal channels when costs are high we provide evidence from household surveys supportive of a sizeable informal sector

the disappearance of cooperatives from economics textbooks discussion of cooperatives abounded in early twentieth century economics textbooks but is virtually absent from their modern counterparts in this paper i assemble a dataset of economics textbooks used at the university of helsinki during 1905 2005 and examine how the treatment of cooperatives has changed and what factors have led to a neglect of cooperatives in textbooks the quality and quantity of the discussion on cooperatives is noted to be much greater in books published before world war ii than in post world war ii books i argue that the main reason for the decline is the paradigm shift from institutional to neoclassical analysis which led to a neglect of the potential of cooperatives in addressing social problems

where marx was right towards a more secure foundation for heterodox economics marx has never been very influential among western economists but the collapse of all types of socialist movements has reinforced the belief that marx is irrelevant for economic analysis at the same time some heterodox economists have claimed that neoclassical theory is sufficiently flexible to provide a foundation for post keynesians institutionalists evolutionary and feminist economists we argue that both conclusions are incorrect and that marx s treatment of agents choices and constraints and of systemic cooperation and conflict is far superior to that of orthodoxy in several crucial respects and can provide a better grounding for non neoclassical analyses

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

why do migrants remit this paper examines primary incentives of remitting using estimated bilateral data on remittances this paper demonstrates that a rise in the home remittance receiving country s gross national income gni per capita leads to fewer remittances and that a rise in the host remittance sending country s gni per capita motivates migrants to remit more real exchange rates and real interest rates have no effect on remittances these results indicate that altruism is an important and critical component of motivations behind remittances however altruism alone does not appear to be a sufficient explanation of the motivations behind remittances other incentives such as loan repayment and investment play a non negligible role in this regard as well the degree of altruism is higher for migrants from developing countries in comparison with migrants from developed countries and it is higher when we define remittances as personal transfers rather than personal transfers and compensation of employees the results of the vector error correction model show if remittances deviate from the equilibrium relationship they will eventually revert

marx marxism and the cooperative movement this paper has a dual aim rst to draw attention to a number of passages inwhich marx explicitly extolled the cooperative movement and thereby confutethe wrong but widely held assumption that marx was inimical to the marketand rejected cooperation as a production mode even for the transition period second to argue that the continuing neglect of marxists both of the co operative movement and of the passages from marx and engels that presenta system of producer cooperatives as a new production mode can be tracedback in part to the late emergence of an economic theory of producercooperatives key words marx marxism socialism and cooperative movementjel classi cations b13 d23 d74

international migration remittances and schooling evidence from el salvador abstract we examine the effect of remittances from abroad on households schooling decisions using data for el salvador following the massive war related emigration of the 1980s remittances became a significant source of household income throughout the 1990s we use the cox proportional hazard model to examine the determinants of school attendance measuring income from a source that is uncorrelated with parental schooling remittances we find that remittances have a large significant effect on school retention we estimate that while household income net of remittances has a small though significant impact on the hazard of leaving school in rural and urban areas remittances have a much larger impact on the hazard of leaving school in urban areas the effect of remittances is at its smallest 10 times the size of the effect of other income in rural areas the effect of remittances is about 2 6 times that of other income our finding is of interest in that it suggests that subsidizing school attendance particularly in poor areas may have a large impact on school attendance and retention even if parents have low levels of schooling

people and machines a look at the evolving relationship between capital and skill in manufacturing 1860 1930 using immigration shocks abstract this paper estimates the elasticity of substitution between capital and skill in manufacturing using immigration induced variation in skill mix across u s counties between 1860 and 1930

drivers of disruption estimating the uber effect abstract a frequent belief is that the rise of so called gig work has led to the displacement of workers in a wide range of traditional jobs this paper examines the impacts of the flagship of the gig economy uber on workers employed in conventional taxi services our analysis exploits newly collected data on the staggered rollout of uber across metropolitan areas in the united states and a difference in differences design to document that incumbent taxi drivers experienced a relative earnings decline of about 10 percent subsequent to uber s entry into a new market while there are no significant effects on their labor supply additional evidence from a battery of placebo tests event study estimates and specifications using google trends data to capture differences in treatment intensity underlines these findings a triple differences design that compares changes among taxi drivers relative to bus tractor and truck drivers that were unaffected by the arrival of uber provides further supporting evidence that the diffusion of uber has reduced the earnings potential of incumbent drivers in conventional taxi services in the united states

the determinants and welfare implications of us workers diverging location choices by skill 1980 2000 abstract from 1980 to 2000 the rise in the us college high school graduate wage gap coincided with increased geographic sorting as college graduates concentrated in high wage high rent cities this paper estimates a structural spatial equilibrium model to determine causes and welfare consequences of this increased skill sorting while local labor demand changes fundamentally caused the increased skill sorting it was further fueled by endogenous increases in amenities within higher skill cities changes in cities wages rents and endogenous amenities increased inequality between high school and college graduates by more than suggested by the increase in the college wage gap alone jel d31 i26 j24 j31 j61 r23

endogeneity in semiparametric binary response models this paper develops and implements semiparametric methods for estimating binary response binary choice models with continuous endogenous regressors it extends existing results on semiparametric estimation in single index binary response models to the case of endogenous regressors it develops a control function approach to account for endogeneity in triangular and fully simulataneous binary response models the proposed estimation method is applied to estimate the income effect in a labor market participation problem using a large micro data set from the british fes the semiparametric estimator is found to perform well detecting a significant attenuation bias the proposed estimator is contrasted to the corresponding probit and linear probability specifications jel c14 c25 c35 j22

what explains the price of remittances an examination across 119 country corridors remittances are a substantial source of external financing for developing countries that influence many aspects of their development though research has shown that remittances are both expensive and price sensitive little is known about what explains their price newly gathered data across 119 country pairs or corridors are used to explore the factors associated with the price of remittances corridors with larger numbers of migrants and more competition among providers are found to exhibit lower prices for remittances when average prices across all types of remittance service providers are considered corridors with lower barriers to access banking services and broader regulation of remittance service providers also have lower prices remittance prices are higher in richer corridors and in corridors with greater bank participation in the remittance market few significant differences emerge when results are compared across banks and separately across money transfer operators however estimations for western union a leading player in the remittances business suggest that its prices are less sensitive to competition

ability biased technological transition wage inequality and economic growth thispaper develops a growthmodel characterizedbyability biasedtechnological transition in which the evolution of technology education attainment and wage inequality is consistent with the observed pattern in the united states and other advanced countries over the past several decades it argues that an increase in the rate of technological progress raises the return to ability and simultaneously generates an increase in wage inequality between and within groups of skilled and unskilled workers an increase in average wages of skilled workers a temporary decline in average wages of unskilled workers an increase in education and a productivity transitory slowdown

remittances and temporary migration in this paper we study the remittance behavior of immigrants and how it relates to temporary versus permanent migration plans we use a unique data source that provides unusual detail on remittances and return plans and follows the same household over time our data allows us also to distinguish between different purposes of remittances we analyze the association between individual and household characteristics and the geographic location of the family as well as return plans and remittances the panel nature of our data allows us to condition on household fixed effects to address measurement error and reverse causality we use an instrumental variable estimator our results show that changes in return plans are related to large changes in remittance flows

spatial changes in labour market inequality abstract we study spatial changes in labour market inequality for us states and msas using census and american community survey data between 1980 and 2010 we report evidence of significant spatial variations in education employment shares and in the college wage premium for us states and msas and show that the pattern of shifts through time has resulted in increased spatial inequality because relative supply of college versus high school educated workers has risen faster at the spatial level in places with higher initial supply levels we also report a strong persistence and increased inequality of spatial relative demand bigger relative demand increases are observed in more technologically advanced states that have experienced faster increases in r d and computer usage and in states where union decline has been fastest finally we show the increased concentration of more educated workers into particular spatial locations and rising spatial wage inequality are important features of labour market polarization as they have resulted in faster employment growth in high skill occupations but also in a higher demand for low wage workers in low skill occupations overall our spatial analysis complements research findings from labour economics on wage inequality trends and from urban economics on agglomeration effects connected to education and technology

remittances and the brain drain revisited the microdata show that more educated migrants remit more two of the most salient trends in migration and development over the last two decades are the large rise in remittances and in the flow of skilled migrants however recent literature based on cross country regressions has claimed that more educated migrants remit less leading to concerns that further increases in skilled migration will impede remittance growth micro data from surveys of immigrants in 11 major destination countries are used to revisit the relationship between education and remitting behavior the data show a mixed pattern between education and the likelihood of remitting and a strong positive relationship between education and amount remitted intensive margin conditional on remitting at all extensive margin combining these intensive and extensive margins yields an overall positive effect of education on the amount remitted for the pooled sample with heterogeneous results across destinations the micro data allow investigation of why the more educated remit more showing that the higher income earned by migrants rather than family characteristics explains much of the higher remittances migration brain drain and education

remittances and the brain drain do more skilled migrants remit more in most destination countries immigration policies are tilted more and more in favor of skilled individuals whether this shift hurts economic prospects in sending countries as argued by the traditional brain drain literature is somewhat controversial the most recent literature focuses on the link between skilled outmigration and educational achievements in the home country this article emphasizes a different channel it considers the argument that skilled migrants raise economic welfare at home by sending a relatively larger flow of remittances while skilled migrants typically earn more and so might be expected to remit more they are also likely to spend more time abroad and to reunite with their close family in the host country these second two factors should be associated with a smaller propensity to remit thus the sign of the impact of the brain drain on total remittances is an empirical question a simple model has been developed showing that skilled migrants may indeed have a lower propensity to remit from a given flow of earnings an empirical equation of remittances is estimated as a measure of the brain drain in developing countries using the docquier and marfouk 2004 data set evidence is found that the brain drain is associated with a smaller propensity to remit

immigration and the human capital of natives large low skilled immigration flows influence both the distribution of local school resources and also local relative wages which exert counterbalancing pressures on the local return to schooling i use the national education longitudinal study nels 88 and u s census data to show that low skilled immigration to an area induces local natives to improve their performance in school attain more years of schooling and take jobs that involve communication intensive tasks for which they native english speakers have a comparative advantage these results point out mechanisms that mitigate the potentially negative effect of immigration on natives wages