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

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

dynamic coordination failures and the efficiency of the firm this paper examines the role of coordination devices such as work norms in creating and sustaining inefficient organizational practices in firms in a dynamic environment the role of signalling norms and product market competition in alleviating such inefficiencies is also examined in particular we show that cournot competition may increase the inefficiency of organizational practices

taxes redistribution and the minimum wage a theoretical analysis this paper considers a simple general equilibrium model that contains two types of workers with differing levels of ability and a social welfare maximizing government the paper shows that social welfare can sometimes be increased by supplementing an optimal linear income tax with a minimum wage but that social welfare can never be increased by supplementing an optimal nonlinear income tax with a minimum wage

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

evaluating interval forecasts a complete theory for evaluating interval forecasts has not been worked out to date most of the literature implicitly assumes homoskedastic errors even when this is clearly violated and proceed by merely testing for correct unconditional coverage consequently i set out to build a consistent framework for conditional interval forecast evaluation which is crucial when higher order moment dynamics are present the new methodology is demonstrated in an application to the exchange rate forecasting procedures advocated in risk management

a gravity model analysis of international migration to north america this study examines the influence of political economic and demographic factors on the size and composition of migration flows to north america a modified gravity model is specified and adjusted to include immigration regulations and characteristics specific to the origin and destination countries for empirical test of the model the time period of study is from 1976 1986 and 70 countries are covered for a total of 1540 observations of migration flows to canada and the usa the results reveal that the population of origin countries and the income of destination countries are two major determinants of migration to north america high population areas of asia and latin america provided a large share of the immigrants domestic restrictions on political and civil freedom in origin countries are found to significantly impair migration to north america

incorporating affirmative action into the welfare state abstract in this paper we discuss a novel aspect of affirmative action policy we examine its redistributive role asking whether in an egalitarian society supplementing the tax transfer system with an affirmative action policy would enhance social welfare we demonstrate that affirmative action could be a desirable policy tool even if racial discrimination does not exist in the labor market

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

social cohesion and the evolution of altruism abstract in this paper we propose a stylized model to study how cohesion may affect the spread and consolidation of altruism in a large population where agents are involved in a local public good contribution game with their neighbors we show that if the contribution cost is moderate neither too high nor too low cooperation can invade and dominate the population if and only if group cohesion displays an intermediate value this reflects an interesting non monotonicity of cohesion in the evolution of altruism while some of it is needed to internalize the benefits of cooperation too much cohesion prevents the spread of altruism among the population at large

demographic and economic pressure on emigration out of africa two of the main forces driving european emigration in the late nineteenth century were real wage gaps between sending and receiving regions and demographic booms in the low wage sending regions our new estimates of net migration for the countries of sub saharan africa show that exactly the same forces driving african across border migration are at work today the results suggest that rapid growth in the cohort of potential young emigrants population pressure on the resource base and slow economic growth are likely to intensify the pressure for migration out of africa and into high wage oecd countries over the next two decades

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

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

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

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

combining forecast densities from vars with uncertain instabilities recursive weight forecast combination is often found to an ineffective method of improving point forecast accuracy in the presence of uncertain instabilities we examine the effectiveness of this strategy for forecast densities using many vector autoregressive var and autoregressive ar models of output growth inflation and interest rates our proposed recursive weight density combination strategy based on the recursive logarithmic score of the forecast densities produces well calibrated predictive densities for us real time data by giving substantial weight to models that allow for structural breaks in contrast equal weight combinations produce poorly calibrated forecast densities for great moderation data copyright 2010 john wiley sons ltd

the labour market performance of recent migrants migrant workers constitute a vital component of many western labour markets although migrants can benefit greatly by moving to higher wage economies it is important to compare their labour market outcomes with those of native born workers in this paper we discuss factors that have been found to influence labour market success in the receiving country and examine the actual performance of recent migrants to the uk the uk provides a good case study for conducting such an exercise because of the very large increases in immigration that have been seen over the past decade we find that labour market performance varies greatly between migrant groups and that outcomes have changed noticeably following the uk government s decision to allow migrants from poland and other central and eastern european countries more or less free access to the labour market after eu enlargement in 2004

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

will affirmative action policies eliminate negative stereotypes a key question concerning affirmative action is whether the labor market gains it brings to minorities can continue without it becoming a permanent fixture in the labor market the authors argue that this depends on how the policy affects employers beliefs about the productivity of minority workers they study the joint determination of employer beliefs and worker productivity in a model of statistical discrimination in job assignments the authors prove that even when identifiable groups are equally endowed ex ante affirmative action can bring about a situation in which employers correctly perceive the groups to be unequally productive ex post copyright 1993 by american economic association

growth econometrics for agnostics and true believers abstract the issue of model uncertainty is central to the empirical study of economic growth many recent papers use bayesian model averaging to address model uncertainty but ciccone and jarocinski 2010 have questioned the approach on theoretical and empirical grounds they argue that a standard agnostic approach is too sensitive to small changes in the dependent variable such as those associated with different vintages of the penn world table pwt this paper revisits their theoretical arguments and empirical illustration drawing on more recent vintages of the pwt and introducing an approach that limits the degree of agnosticism

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

competition and culture in an evolutionary process of equilibrium selection a simple example abstract competition tends to promote efficient equilibrium behavior through the higher survival of the organizations say firms that adopt it on the other hand culture understood as the inherited social pattern of behavior may induce certain short run inertias this paper analyzes a dynamic model of the struggle between these two forces in the evolution of alternative stable configurations of social behavior journal of economic literature classification numbers c72 l20

competition and the evolution of efficiency abstract this paper presents an evolutionary model of the relationship between inter firm competition and intra firm organizational or x efficiency we model x inefficiency within the firm as a prisoner s dilemma effort monitoring problem whose evolution is influenced by external competitive pressure from other firms a closed form stochastic equilibrium displaying survival of the fittest dynastic cycles is derived and analyzed the main result is that there exists a well defined sense in which competition is a surprisingly powerful force for efficiency

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

the fiscal impact of immigration on the advanced economies this paper is concerned with the advanced economies it begins with a discussion of the demo graphic issues that have played such a large role in the debate on immigration this is followed by a section on the main problems involved in estimating the fiscal impact of immigration and then a summary of the international evidence on this topic mostly from europe and america separate sections on the uk and on low fertility countries follow the main conclusions are as follows highly skilled migrants normally make a large fiscal contribution whereas unskilled migrants are likely to impose a net cost on native taxpayers if they settle in the receiving country however even unskilled migrants may be net contributors if they eventually depart and make few claims on government expenditure while in the country most empirical studies find that the fiscal contribution of the immigrant population as a whole is quite small the positive contribution of some migrants is largely or wholly offset by the negative contribution of others this finding holds across a variety of countries and methodologies estimates of the net fiscal contribution of immigration normally lie within the range 1 per cent of gdp there are a few exceptions but these refer to countries experiencing demographic collapse and they are based on unrealistic assumptions about the inter generational allocation of future taxes and government expenditure with more realistic assumptions the overall fiscal benefit of immigration is quite small even in these countries these findings suggest that in general there is no strong fiscal case for or against sustained large scale immigration the desirability or otherwise of large scale immigration should be decided on other grounds

the role of economic theory in modelling the long run this argues for a closer link between the modelling of the long run relations in applied economics and the intertemporal equilibrium notion from economic theory this abstract was borrowed from another version of this item

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

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

does banning affirmative action lower college student quality banning affirmative action from college admissions cannot prevent an admissions office that cares about diversity from achieving it in ways other than explicitly considering race we model college admissions where candidates from two groups with different average quali cations compete for a xed number of seats under affirmative action an admissions office that cares both about quality and diversity admits the best quali ed candidates from each group under a ban it may promote diversity by partially ignoring candidates quali cations and therefore not admitting the best quali ed candidates from either group a ban always reduces diversity and may also lower quality jel j71 j 15 i28

the promise of positive optimal taxation normative diversity and a role for equal sacrifice abstract a prominent assumption in modern optimal tax research is that the objective of taxation is utilitarian i present new survey evidence that most people reject this assumption s implications for several prominent features of tax policy instead preferring tax policies based at least in part on a classic alternative objective the principle of equal sacrifice i generalize the standard model to accommodate this preference for a mixed objective proposing a method by which to make disparate criteria commensurable while respecting pareto efficiency then i show that optimal policy in this generalized model calibrated to the survey evidence and u s microdata is capable of quantitatively matching several features of existing tax policy that are incompatible in the conventional model but widely endorsed in the survey and reality including the coexistence of substantial redistribution and limited tagging together these findings demonstrate the potential of a positive theory of optimal taxation

model averaging in economics an overview standard practice in empirical research is based on two steps first researchers select a model from the space of all possible models second they proceed as if the selected model had generated the data therefore uncertainty in the model selection step is typically ignored alternatively model averaging accounts for this model uncertainty in this paper i review the literature on model averaging with special emphasis on its applications to economics finally as an empirical illustration i consider model averaging to examine the deterrent effect of capital punishment across states in the usa

the economics of immigration this literature review concerns the impact of immigration on the economy of the host country focusing on the experience of the united states the emphasis is on the period from the 1970s to the 1990s the author shows that research earlier in this period generally concluded that the economic effects of immigration were positive but that more recent research on later migrations have generally concluded that immigration may be having an adverse effect on the earnings of native unskilled workers and be placing an increased burden on welfare programs the importance of such economic analysis for the formulation of appropriate migration policies is stressed

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

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

jointness of growth determinants this paper introduces a new measure of dependence or jointness among explanatory variables jointness is based on the joint posterior distribution of variables over the model space thereby taking model uncertainty into account by looking beyond marginal measures of variable importance jointness reveals generally unknown forms of dependence positive jointness implies that regressors are complements representing distinct but mutually reinforcing effects negative jointness implies that explanatory variables are substitutes and capture similar underlying effects in a cross country dataset we show that jointness among 67 determinants of growth is important affecting inference and informing economic policy copyright 2009 john wiley sons ltd

policy watch the economics of fuel economy standards one of the most hotly contested of all energy policy issues involves corporate average fuel economy or cafe standards for new cars and light duty trucks tighter standards would reduce gasoline consumption and hence both greenhouse gas emissions as well as this country s vulnerability to oil price shocks but they would also increase the price of new vehicles worsen traffic congestion and depending on how they are phased in possibly even reduce occupant safety these effects are amenable to economic analysis and we review the evidence to date bearing on this interesting and important question

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

rigidity of social systems the tendency for the members of a corporation or government to be resistant to change is explored in a model that encompasses two endemic features of such systems first the social system is modeled as a hierarchy and implicit within it is a selection process that determines who advances to higher levels second an agent s behavior is partially determined by imitating those who have risen in the ranks a behavioral norm of being rigid is found to be more prevalent and robust than one of being flexible a more volatile environment may also induce agents to be more resistant to change admirandi sed imitandi to be admired but not imitated st augustine

decentralization and the coordination problem abstract this paper addresses the relationship between the degree of decentralization in a population and the probability of coordinating on an efficient outcome rather than the risk dominant outcome in a coordination game the model here extends the literature on evolutionary games by supposing that players interact in groups but that occasionally they may change groups the main innovation is the group changing assumption which allows players to vote with their feet in contrast to most of the recent literature e g kandori et al 1993 in which the risk dominant equilibrium is selected in the long run the model here predicts convergence to the efficient equilibrium if interaction is decentralized enough furthermore it is shown how the model can be applied to the problem of product standardization

the regional distribution of public employment theory and evidence abstractthe regional distribution of public employment theory and evidence regional studies this article analyzes the optimal regional pattern of public employment in an information constrained second best redistribution policy it shows that regionally differentiated public employment can serve as an expenditure side tagging device bypassing or relaxing the equity efficiency trade off the optimal pattern exhibits higher levels of public employment in low productivity regions and is more pronounced the higher is the degree of regional inequality empirically using a panel of european regions from 1995 to 2007 the analysis finds evidence that public employment is systematically higher in low productivity regions the latter effect is stronger in countries with higher levels of regional inequality

the labour market impact of immigration in the first part of this paper we present a stylized model of the labour market impact of immigra tion we then discuss mechanisms through which an economy can adjust to immigration changes in factor prices output mix and production technology in the second part we explain the problems of empirically estimating how immigration affects labour market outcomes of the resident population and review some strategies to address these we then summarize some recent empirical studies for the uk and other countries we conclude with an outlook on what we believe are important avenues for future research

skilled migration and business cycle dynamics abstract shocks to net migration matter for the business cycle using a structural vector autoregression and an estimated dynamic stochastic general equilibrium dsge model of a small open economy we find that migration shocks make an important contribution to the volatility of per capita gdp migration shocks contribute to variability in per capita consumption and investment and to residential investment and real house prices despite the role of migration other shocks remain more important drivers of these expenditure components and of housing market volatility in the dsge model the level of human capital possessed by migrants relative to that of locals materially affects the business cycle impact of migration the impact of migration shocks is larger when migrants have substantially different levels of human capital relative to locals when the average migrant has more human capital than locals as seems to be common for migrants into developed economies a migration shock has an expansionary effect on per capita gdp and its components

self selection and pareto efficient taxation abstract this paper analyses the set of pareto efficient tax structures the formulation of the problem as one of self selection not only shows more clearly the similarity between this problem and a number of other problems such as the optimal pricing of a monopolist which have recently been the subject of extensive research but also allows the derivation of a number of new results we establish i under fairly weak conditions randomization of tax structures is desirable ii if different individuals are not perfect substitutes for one another in production then the general equilibrium effects until now largely ignored in the literature of changes in the tax structure may be dominant in determining the optimal tax structure in particular if the relative wage of high ability and low ability individuals depends on the relative supplies of labor the optimal tax structure entails a negative marginal tax rate on the high ability individuals and a positive marginal tax rate on the low ability individuals the marnitude of which depends on the elasticity of substitution iii if individuals differ in their preferences pareto efficient taxation may entail negative marginal tax rates for high incomes while iv if wage income is stochastic the marginal tax rate at the upper end may be 100 our analysis thus makes clear that the main qualitative properties of the optimal tax structure to which earlier studies called attention are not robust to these attempts to make the theory more realistic