money taxes and efficiency when sunspots matter abstract this paper examines the impact monetary redistribution policies have on the amount of sunspot induced volatility in an economy a dynamic model of segmented asset markets is presented in which the tax transfer policy determines in a continuous way the influence sunspots can have on the general price level and on consumption if the policy leads to a transfer of resources across segmentation lines there exist equilibria in which sunspots affect consumption the primary result is that there is an efficiency cost of taxation larger transfers lead to larger fluctuations in consumption the paper also shows that in many cases improvements in asset markets that decrease consumption volatility simultaneously increase price level volatility journal of economic literature classification numbers d84 e31 e44 h21

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

assessing the case for social experiments rs ecent academic debates pit two alternative approaches to policy evaluation against one another the first is the experimental approach based on the random assignment of accepted program applicants to a recipient or treatment group and a non recipient or control group the second is the nonexperimental or econometric approach that uses a variety of microdata sources statistical methods and behavioral models to compare the outcomes of participants in social programs with those of nonparticipants the central question addressed in this paper is whether or not randomized social experiments aid in securing answers to basic questions about the evaluation of social programs there are many distinct and complementary approaches to the study of the impact of public policy including full general equilibrium analysis of policy impacts tinbergen 1956 auerbach and kotlikoff 1987 shoven and whalley 1992 kydland and prescott 1991 and less ambitious partial equilibrium microeconomic structural research programs such as those designed to estimate the impact of taxes on labor supply both approaches offer answers to many interesting counterfactual policy questions but their credibility rests critically on the quality of the empirical input used to generate their answers

instruments randomization and learning about development there is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development there is skepticism about the ability of econometric analysis to resolve these issues or of development agencies to learn from their own experience in response there is increasing use in development economics of randomized controlled trials rcts to accumulate credible knowledge of what works without overreliance on questionable theory or statistical methods when rcts are not possible the proponents of these methods advocate quasirandomization through instrumental variable iv techniques or natural experiments i argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding two key issues are the misunderstanding of exogeneity and the handling of heterogeneity i illustrate from the literature on aid and growth actual randomization faces similar problems as does quasi randomization notwithstanding rhetoric to the contrary i argue that experiments have no special ability to produce more credible knowledge than other methods and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority i illustrate using prominent experiments in development and elsewhere as with iv methods rct based evaluation of projects without guidance from an understanding of underlying mechanisms is unlikely to lead to scientific progress in the understanding of economic development i welcome recent trends in development experimentation away from the evaluation of projects and toward the evaluation of theoretical mechanisms jel c21 f35 o19

who is against immigration a cross country investigation of individual attitudes toward immigrants abstract this paper empirically analyzes economic and noneconomic determinants of individual attitudes toward immigrants within and across countries the two survey data sets used covering a wide range of developed and developing countries make it possible to test for interactive effects between individual characteristics and country level attributes in particular theory predicts that the correlation between pro immigration attitudes and individual skill should be related to the skill composition of natives relative to immigrants in the destination country skilled individuals should favor immigration in countries where natives are more skilled than immigrants and oppose it otherwise results based on direct and indirect measures of the relative skill composition are consistent with these predictions noneconomic variables also are correlated with immigration attitudes but they don t alter significantly the labor market results

wealth inequality preference heterogeneity and macroeconomic volatility in two sector economies we explore the link between wealth inequality preference heterogeneity and macroeconomic volatility in a two sector neoclassical growth model first we prove that if agents have homogeneous preferences when the absolute risk tolerance is a strictly convex concave function sufficiently high low levels of wealth inequality may lead to endogenous fluctuations in the neighborhood of the steady state second we consider the effects of preference heterogeneity when agents are homogeneous with respect to their wealth we show that when the utility function belongs to the hara class sufficiently high levels of preference heterogeneity may lead to endogenous fluctuations in the neighborhood of the steady state if the elasticity of intertemporal substitution in consumption is greater than one

studying optimal paternalism illustrated by a model of sin taxes the classical economic approach to policy analysis assumes that people always respond optimally to the costs and benefits of their available choices a great deal of evidence suggests however that in some contexts people make errors that lead them not to behave in their own best interests economic policy prescriptions might change once we recognize that humans are humanly rational rather than superhumanly rational and in particular it may be fruitful for economists to study the possible advantages of paternalistic policies that help people make better choices we propose an approach for studying optimal paternalism that follows naturally from standard assumptions and methods of economic theory write down assumptions about the distribution of rational and irrational types of agents about the available policy instruments and about the government s information about agents and then investigate which policies achieve the most efficient outcomes in other words economists ought to treat the analysis of optimal paternalism as a mechanism design problem when some agents might be boundedly rational this approach has many advantages first and foremost by explicitly addressing when and how people do and don t pursue their own best interests economists will be better able to contribute to policy debates to contribute to debates over regulating private financial decisions we must study whether financial decisions are based on fallacious statistical reasoning and whether self control problems lead people to borrow too heavily to contribute to debates over teenage smoking we must study whether teenagers become smokers against their long run best interest economists will and should be ignored if we continue to insist that it is axiomatic that constantly trading stocks or accumulating consumer debt or becoming a heroin addict must be optimal for the people doing these things merely because they have chosen to do it a second advantage of our approach is that it forces us to look for the best feasible policy our

a cautionary note on tests of overidentifying restrictions in this note we argue that tests of overidentifying restrictions give little information on the validity of the moment conditions implied by the underlying economic model and therefore are mute about the possibility of identifying the parameters of interest

does immigration induce native flight from public schools into private schools abstract the paper tests whether native born american families respond to inflows of immigrants by sending their children to private school the analysis uses 1980 and 1990 census data from 132 metropolitan areas for primary school students no significant relation between immigration and private school enrolment is found for secondary schools a significant link emerges for every four immigrants who arrive in public high schools it is estimated that one native student switches to a private school white students account for most of this flight natives appear to respond mainly to immigrant children who speak a language other than english at home

measuring welfare effects of product contamination with consumer uncertainty abstract a methodology is developed for measuring consumer welfare loss from market demand due to contamination when information is imperfect comparison of behavior before and after awareness permits calculation of the cost of ignorance which occurs when news of contamination is withheld or undiscovered for a time as well as when excessive reporting and exaggeration cause overreaction avoidance costs are also calculated for consumers who consume less than they would with perfect information due to risk aversion the methodology is applied to analyzing the heptachlor crisis which reduced milk consumption in hawaii by over 80

discounting and long run behavior global bifurcation analysis of a family of dynamical systems abstract this paper is concerned with the relationship between the discount rate and the nature of long run behavior in dynamic optimization models the theory is developed under two conditions the first is history independence which rules out multiple limit sets the second is a condition that avoids the reversion to a stable steady state as the discount factor is lowered once cycles have emerged these conditions appear to be the minimal restrictions that would allow analysis by a bifurcation diagram the results are illustrated by two well known examples in this literature due to sutherland and weitzman samuelson journal of economic literature classification numbers c61 d90 041

on characterizing optimal competitive programs in terms of decentralizable conditions the paper considers a multisector model of intertemporal allocation with a primary factor of production and the overtaking criterion of optimality the optimal program is characterized in terms of i period by period conditions on intertemporal profit and utility maximization relative to a system of competitive prices and ii non positivity of appropriately computed values of differences of stocks from the golden rule stock the last condition replaces the usual transversality condition of malinvaud and throws new light on the possibility of dencentralization in an infinite horizon economy

effects and value of verifiable information in a controversial market evidence from lab auctions of genetically modified food food products containing genetically modified gm ingredients have entered the market over the past decade the biotech industry and environmental groups have disseminated conflicting private information about gm foods this paper develops a unique methodology for valuing independent third party information in such a setting and applies this method to consumers willingness to pay for food products that might be gm data are collected from real consumers in an auction market setting with randomized information and labeling treatments the average value of third party information per lab participant is small but the public good value across u s consumers is shown to be quite large jel c91 d12 d82

child schooling child health and rainfall shocks evidence from rural vietnam abstractwe study the effect of rainfall shocks on child schooling outcomes and on standardised height for age a measure of child health in rural vietnam we find that adverse rainfall shocks during pregnancy adversely affect children s school entry delay and progress through school adverse rainfall shocks in the third year of life adversely affect both schooling and child health these effects differ by region as a result of constraints that reflect regional economic heterogeneity we predict that policies that help rural families smooth income shocks will result in increases in human capital and in substantial cumulative returns over a worker s working life

immigration and electoral support for the far left and the far right immigration has become one of the most divisive political issues in the united states the united kingdom france and several other western countries we estimate the impact of immigration on voting for far left and far right parties in france using panel data on presidential elections from 1988 to 2017 to derive causal estimates we instrument more recent immigration flows by past settlement patterns in 1968 we find that immigration increases support for far right candidates and has no robust effect on far left voting the increased support for far right candidates is driven by low educated immigrants from non western countries

migration and institutions exit and voice from abroad a rapidly growing body of research examines the relationship between migration and institutions three strands of studies can be distinguished some studies focused on the role of domestic and foreign institutions in the decision to migrate others were interested by the impact of migration on institutional reforms in migrants countries of origin while the effect of migration on destination countries is largely documented recent studies focus on how migrants affect social and informal institutions in the destination countries this survey puts together these three strands of literature with three purposes first we offer a short definition and synthetic typology of institutions which provide a guide to understand several studies summarized and their results second our analysis is presented following the analytic framework exit voice and loyalty of hirschman in order to highlight the brain grain phenomenon for developing countries from an institutional point of view third we review the limited existing work on the very timely topic whether migrants are harmful or not to institutions in the host countries

does the welfare state affect individual attitudes toward immigrants evidence across countries abstract this paper analyzes welfare state determinants of individual attitudes toward immigrants within and across countries and their interaction with labor market drivers of preferences we consider two mechanisms through which a redistributive welfare system might adjust as a result of immigration under the first model immigration has a larger impact on high income individuals while under the second one low income individuals are those most affected individual attitudes are consistent with the first welfare state model and with labor market determinants in countries where immigration is unskilled income is negatively correlated with pro immigration preferences while skill is positively correlated with them these relationships are reversed in economies characterized by skilled migration

an introduction to the economics of immigration in oecd countries the share of the foreign born in oecd countries is increasing and this article summarizes economics research on the effects of immigration in those nations four broad topics are addressed labor market issues fiscal questions the political economy of immigration and productivity international trade extreme concerns about deleterious labour market and fiscal impacts following from new immigrants are not found to be warranted however it is also clear that government policies and practices regarding the selection and integration of new migrants affect labour market fiscal and social cultural outcomes policies that are well informed well crafted and well executed beneficially improve population welfare

electoral systems and public spending we study the effects of electoral institutions on the size and composition of public expenditure in oecd and latin american countries we emphasize the distinction between purchases of goods and services which are easier to target geographically and transfers which are easier to target across social groups we present a theoretical model in which voters anticipating government policymaking under different electoral systems have an incentive to elect representatives more prone to transfer public good spending in proportional majoritarian systems the model also predicts higher total primary spending in proportional majoritarian systems when the share of transfer spending is high low after dee ning rigorous measures of proportionality to be used in the empirical investigation we e nd considerable support for our predictions

welfare gains from quality certification of infant foods results from a market experiment in mali in low income countries malnutrition is often most severe among infants of six to twenty four months they need higher density foods than the family diet but density is a credence attribute we hypothesize that the premium now paid for heavily advertised brands reflects demand for quality assurance which could be provided at lower cost to competing firms through third party certification we use a new market experiment to find that mothers average willingness to pay for certification is about 1 75 kg or four times its cost so that total economic surplus gains from introducing certification to mali would be on the order of 1 million annually

mr rossi mr hu and politics the role of immigration in shaping natives voting behavior using italian municipality level data on national elections and iv estimation strategy we find that immigration generates a sizable causal increase in votes for the center right coalition which has a political platform less favorable to immigrants additional findings are i the effect is heterogeneous across municipalities with different sizes ii the gain in votes for the center right coalition corresponds to a loss of votes for the center and center left parties a decrease in voter turnout and a rise in protest votes iii the relationship between immigration and electoral gains percolates to mayoral election at the municipality level iv cultural diversity competition in the labor market and for public services and political competition are the most relevant channels at work

consistent planning under quasi geometric discounting abstract we study properties of stationary markov perfect equilibria in a general model of intertemporal choice under quasi geometric discounting the dynamics generated by stationary markov perfect equilibria can be very complicated even if the model satisfies strict convexity and smoothness properties and the decision maker is arbitrarily patient if there exist multiple stationary markov perfect equilibria then it is in general possible to construct infinitely many non degenerate stationary sunspot equilibria as well

non linear dynamics in the infinite time horizon model there are two important reasons why economic growth theory became again a popular field during the last 15 years the first one is that recently developed growth theoretic models capture more aspects of economic growth than the models used in the fifties and sixties nowadays models of economic growth try to explain technological progress and innovations whereas the purpose of traditional models was mainly to describe the process of capital accumulation

characterization of intertemporal optimality in terms of decentralizable conditions the discounted case abstract the paper studies the problem of characterizing the optimality of competitive programs in terms of decentralizable conditions we show that when future utilities are discounted and the optimal stationary stock is proportionately expansible then optimality of competitive programs can be characterized by the condition that the scalar product of the difference of prices and quantities between those of the given competitive program and those of the optimal stationary program be non positive period by period

accounting for selectivity and duration dependent heterogeneity when estimating the impact of emigration on incomes and poverty in sending areas the impacts of international emigration and remittances on incomes and poverty in sending areas are increasingly studied with household survey data but comparing households with and without emigrants is complicated by a triple selectivity problem first households self select into emigration second in some emigrant households everyone moves while others leave members behind and third some emigrants choose to return to the origin country allowing for duration dependent heterogeneity introduces a fourth form of selectivity one must now worry not just about whether households migrate but also when they do so this paper clearly sets out these selectivity issues and their implications for existing migration studies and then addresses them by using survey data designed specifically to take advantage of a randomized lottery that determines which applicants to the over subscribed samoan quota may immigrate to new zealand the analysis compares incomes and poverty rates among left behind members in households in samoa that sent samoan quota emigrants with those for members of similar households that were unsuccessful in the lottery policy rules control who can accompany the principal migrant providing an instrument to address the second selectivity problem while differences among migrants in which year their ballot was selected allow for estimation of duration effects the authors find that migration reduced poverty among former household members but they also find suggestive evidence that this effect may be short lived as both remittances and agricultural income are negatively related to the duration that the migrant has been abroad

huggett economies with multiple stationary equilibria abstract i obtain a closed form solution to a huggett economy with constant absolute risk aversion cara utility when the vector of individual state variables follows a var 1 process with an arbitrary shock distribution the stationary equilibrium is unique if the income process is ar 1 but not necessarily so otherwise with gaussian shocks i provide general sufficient conditions for the existence of at least three equilibria when the income process is either arma 1 1 ar 2 or has a persistent transitory pt representation with negatively correlated shocks the possibility of multiple equilibria calls for caution in comparative statics exercises and policy analyses using heterogeneous agent models as an illustration i provide an example in which the welfare implication of changing the income risk goes in opposite directions depending on the choice of equilibrium

on the minimum rate of impatience for complicated optimal growth paths the occurrence of complex dynamics in economic models has received wide attention by the economic profession during the last decade see boldrin and woodford 1990 for a recent survey one of the most interesting and surprising results obtained so far is the indeterminacy theorem of boldrin and montrucchio 1986b which implies that virtually every dynamical behavior is fully compatible with the standard assumptions of decreasing returns competitive markets and perfect foresight deneckere and pelikan 1986 have used a related approach to derive similar results for the special case of one dimensional dynamics whereas the analysis in boldrin and montrucchio 1986b and deneckere and pelikan 1986 is restricted to optimal growth models formulated in discrete time an analogous result holds also for the continuous time case see montrucchio 1988 and sorger 1990 all of these indeterminacy theorems have been proved by a constructive approach which requires a sufficiently high rate of impatience on the side of the decision maker in particular to construct optimal growth models exhibiting some well known chaotic maps like the logistic map or the henon map as optimal policy functions one needs time preference rates of more than 400

incomplete markets and volatility abstract this paper shows that the precautionary motive combined with asset incompleteness is a major source of volatility and indeterminacy in financial markets price fluctuations originate from agents efforts to insure themselves through time by borrowing and lending instead of shifting income across states of nature by trading risky assets a high interest rate at a future date reduces the potential for future consumption smoothing via borrowing which leads to a strong precautionary motive and a low interest rate in the current period the negative feedback between future and current rates generates fluctuations this logic is developed in spec a cara normal exchange economy with many periods and endogenous interest rates when there is an intermediate level of market incompleteness and sufficient investor impatience fluctuations in the real interest rate can be large even though the aggregate endowment is constant spec has a unique equilibrium under a finite horizon on the other hand with a finite number of infinitely lived agents there exists a robust continuum of equilibria that are neither bubbles nor sunspots journal of economic literature classification numbers c61 d52 d58 g11 g12

religion and economy religion has a two way interaction with political economy with religion viewed as a dependent variable a central question is how economic development and political institutions affect religious participation and beliefs with religion viewed as an independent variable a key issue is how religiosity affects individual characteristics such as work ethic honesty and thrift and thereby influences economic performance in this paper we sketch previous studies of this two way interaction but focus on our ongoing quantitative research with international data

choice and procrastination author s o donoghue ted rabin matthew abstract recent models of procrastination due to self control problems assume that a procrastinator considers just one option and is unaware of her self control problems we develop a model where a person chooses from a menu of options and is partially aware of her self control problems this menu model replicates earlier results and generates new ones a person might forego completing an attractive option because she plans to complete a more attractive but never to be completed option hence providing a non procrastinator additional options can induce procrastination and a person may procrastinate worse pursuing important goals than unimportant ones

do prices and attributes explain international differences in food purchases food purchases differ substantially across countries we use detailed household level data from the united states france and the united kingdom to i document these differences ii estimate a demand system for food and nutrients and iii simulate counterfactual choices if households faced prices and nutritional characteristics from other countries we find that differences in prices and characteristics are important and can explain some difference e g united states france difference in caloric intake but generally cannot explain many of the compositional patterns by themselves instead it seems an interaction between the economic environment and differences in preferences is needed to explain cross country differences jel d12 i12 l11 l66 q11 food purchases differ across countries within countries over time and across demographic groups these differences seem to be correlated with rates of excess weight gain and diet related illness economists tend to attribute the difference in food purchases across markets to differences in prices an alternative explanation is that they are due to inherent differences in preferences and eating habits in this article we study the differences in food purchases and nutritional outcomes across countries focusing on the united states united kingdom and france we start by systematically documenting the differences in food purchases for consumption at home between the united states united kingdom and france we show that us households purchase different foods from french and uk households for example us households purchase more calories per person a greater percentage of those calories comes in the form of carbohydrates and a lower share in the form of proteins a higher share of expenditure is on drinks and prepared foods and

choosing for others abstractexperiments conducted in the us and france were used to study how individuals make trade offs between health and taste for themselves and others when someone receives a choice made for them that differs from their preference they experience a welfare loss at least in the short term we measure the empirical magnitude of this loss and suggest it play a role in assessing the desirability of paternalistic policies motivated by behavioural economics we show that the welfare loss changes with the provision of new information and the impact of this information differs for the two countries

an exact discount factor restriction for period three cycles in dynamic optimization models consider a standard aggregative dynamic optimization framework u where is the transition possibility technology set u is a reduced form utility function defined on this set and 0 1 a discount factor can an optimal program in this framework exhibit a period three cycle

does employee body weight affect employers behavior in this paper we study the possible segregation of overweight individuals already established in the labor market when firms make decisions on hiring firing and promoting most existing studies use wage equations to document wage differences but little is known about the reason for the differences and the sorting of workers using an equilibrium search model search frictions are taken into account additionally sorting is examined using a logit model we find that wage differences between workers who have a normal weight and workers who are overweight or obese can be explained by differential firm behavior with respect to both the job offer arrival rate and the probability of being promoted

the deadweight loss of christmas when economists comment on holiday gift giving it is usually to condone the healthy effect of spending on the macroeconomy however an important feature of gift giving is that consumption choices are made by someone other than the final consumer a potentially important microeconomic aspect of gift giving is that gifts may be mismatched with the recipients preferences in the standard microeconomic framework of consumer choice the best a gift giver can do with say 10 is to duplicate the choice that the recipient would have made while it is possible for a giver to choose a gift which the recipient ultimately values above its price for example if the recipient is not perfectly informed it is more likely that the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash in short gift giving is a potential source of deadweight loss this paper gives estimates of the deadweight loss of holiday gift giving based on surveys given to yale undergraduates i find that holiday gift giving destroys between 10 percent and a third of the value of gifts while these recipients may be unrepresentative of the u s population their gifts are not necessarily unrepresentative holiday expenditures average 40 billion per year implying that a conservative estimate of the deadweight loss of christmas is a tenth as large as estimates of the deadweight loss of income taxation i also explore how deadweight loss and the tendency to give cash gifts vary with the relationship and age difference between giver and recipient i find that gifts from friends and significant others are most efficient while noncash gifts from members of the extended family are least efficient and destroy a third of their value i develop a simple expected utility model to explain the decision to give cash as opposed to in kind gifts the data are consistent with the model cash gifts are most common from the sorts of givers whose noncash gifts have the lowest expected value to recipients given their cost and high variability in recipient valuation

on impatience economic growth and the environmental kuznets curve a dynamic analysis of resource management the paper presents a dynamic analysis of natural resource management and investigates some key factors that affect optimal management and resource conservation using a recursive specification of time preferences we show how endogenous discounting and impatience can affect the motivation for both capital investments and environmental preservation we examine the relationships between economic growth and environmental quality endogenous discounting provides new insights in the economic dynamics underlying the environmental kuznets curve by treating growth as endogenous we examine how externalities and economic growth interact with each other we investigate how economic development can contribute to an increased demand for environmental preservation as an important new result we also show how poverty can contribute to environmental degradation

attitudes toward highly skilled and low skilled immigration evidence from a survey experiment past research has emphasized two critical economic concerns that appear to generate anti immigrant sentiment among native citizens concerns about labor market competition and concerns about the fiscal burden on public services we provide direct tests of both models of attitude formation using an original survey experiment embedded in a nationwide u s survey the labor market competition model predicts that natives will be most opposed to immigrants who have skill levels similar to their own we find instead that both low skilled and highly skilled natives strongly prefer highly skilled immigrants over low skilled immigrants and this preference is not decreasing in natives skill levels the fiscal burden model anticipates that rich natives oppose low skilled immigration more than poor natives and that this gap is larger in states with greater fiscal exposure in terms of immigrant access to public services we find instead that rich and poor natives are equally opposed to low skilled immigration in general in states with high fiscal exposure poor rich natives are more less opposed to low skilled immigration than they are elsewhere this indicates that concerns among poor natives about constraints on welfare benefits as a result of immigration are more relevant than concerns among the rich about increased taxes overall the results suggest that economic self interest at least as currently theorized does not explain voter attitudes toward immigration the results are consistent with alternative arguments emphasizing noneconomic concerns associated with ethnocentrism or sociotropic considerations about how the local economy as a whole may be affected by immigration

immigration wages and compositional amenities economists are often puzzled by the stronger public opposition to immigration than trade since the two policies have symmetric effects on wages unlike trade however immigration changes the composition of the local population imposing potential externalities on natives while previous studies have focused on fiscal spillovers a broader class of externalities arise because people value the compositional amenities associated with the characteristics of their neighbors and co workers in this paper we present a new method for quantifying the relative importance of these amenities in shaping attitudes toward immigration we use data for 21 countries in the 2002 european social survey which included a series of questions on the economic and social impacts of immigration as well as on the desirability of increasing or reducing immigrant inflows we find that individual attitudes toward immigration policy reflect a combination of concerns over conventional economic impacts i e on wages and taxes and compositional amenities with substantially more weight on composition effects most of the difference in attitudes to immigration between more and less educated natives is attributable to heightened concerns over compositional amenities among the less educated

do immigrant inflows lead to native outflows we use 1980 and 1990 census data for 119 larger metropolitan statistical areas to examine the effect of skill group specific immigrant inflows on the location decisions of natives in the same skill group and on the overall distribution of human capital to control for unobserved skill group specific demand factors our models include lagged mobility flows of natives over the 1970 80 period we also estimate instrumental variables models that use the fraction of mexican immigrants in 1970 to predict skill group specific relative immigrant inflows over the 1980s despite wide variation across cities in the size and relative skill composition of immigrant population changes we find no evidence of selective out migration by natives we conclude that immigrant inflows exert a direct effect on the relative skill composition of cities cities that have received relatively unskilled immigrant flows have experienced proportional rises in the size of their unskilled populations this abstract was borrowed from another version of this item

on persistent poverty in a rich country we examine differences in income within the united states and the regions of persistent poverty that have arisen using a newly assembled county level data set linking 19th century census data with contemporary data we identify the roles of current differences in aggregate production technologies and factor endowments together with contributions of historical institutions culture geography and human capital we allow for possible cross county factor mobility via a correlated random effects gmm estimator and find evidence of significant regional differences in production technologies our decompositions of the poor nonpoor income gap suggest that at least three fourths of the gap is explained by differences in productive factors persistently poor counties are different and poorer primarily because they have lower levels of factors of production not because they use the factors they have less efficiently together historical and contemporary human capital explain over half of the overall income gap between persistently poor and nonpoor counties