are legislative tv and campaign finance regulations complementary entry barriers evidence from the usa the present study examines the political use of legislative television and campaign finance restrictions as either complementary or substitutable forms of entry barriers using data from the 50 states for 1976 results from a simultaneous probit procedure indicate that where campaign finance regulations are relaxed demand for televised house sessions is increased results also suggest that the presence of televised proceedings increases the restrictiveness of a state s campaign finance rules thus supporting the hypothesis that legislative television and campaign finance restrictions serve incumbent legislators as complementary institutional entry barriers mixon 2002 supports this view by providing examples of outlets for voters to scrutinize elected legislators at the federal level in the united states for instance legislative positions for members of congress are often described in detail by nationally circulated periodicals such as time and newsweek and in widely circulated newspapers such as th

commercial policy and the brain drain it is hypothesized that commercial and payments policies enacted by governments tend to raise the incomes of higher income individuals and thus to lower rates of emigration the degree of a country s intervention in its international finance and trade sectors is proxied by the black market premium for us dollars in the country it is argued that more extensive protection of domestic industry reflected in higher black market us dollar premiums raises highly skilled workers incomes reflected by a reduction in emigration using data on immigration to the usa by country it is found that higher black market premiums are related to lower us immigration rates consistent with the hypothesis

home and away graduate experience from a regional perspective the recent establishment of regional assemblies adds a further policy dimension to higher education this paper consists of an empirical analysis of the choices made by the 1991 northern ireland cohort of entrants to higher education to stay in or leave northern ireland for universities and subsequently then for employment the data indicate that the probability to leave was firmly linked to a level scores though this interacted with religion and social class the choice of labour market for most students reflected the location of university those who returned to northern ireland after graduation were less able and earned less on average than those who remained employment in the locality of the university improves earnings possibly due to the information this generates for both parties

money fame and the allocation of talent brain drain and the institution of science abstract the earning structure in science is flatter than in the private sector which could cause a brain drain toward the latter this paper studies the allocation of talent between both sectors when agents value money and fame assuming that the intrinsic performance is a less noisy signal of talent in science than in the private sector we show that a good institution of science mitigates the brain drain and that introducing extra monetary incentives through the market might induce excessive diversion from pure to applied research we finally show the optimality of a relatively flat earning structure in science

asymmetric information multiperiod labor contracts and inefficient job separations economists have for some time been telling the world and each other that in a dynamic economy some labor turnover is to be expected and is in fact efficient however there is a pervasive feeling that not all of the observed turnover is efficient the dilemma of course is to provide satisfactory reasons why inefficient turnover should occur with optimizing rational economic agents in light of this problem recent developments in implicit contract theory 1 4 5 have begun to focus on the idea that in a world of uncertainty asymmetric information and moral hazard problems may prevent efficient fully enforceable contingent claims contracts from developing in particular the asymmetric information i e firms privately observe their profits and workers privately observe their alternatives and moral hazard problems make efficient turnover unlikely because parties making separation decisions have neither all available relevant information nor have an incentive to use this information to make an efficient decision while this investigation into the ramifications of asymmetric information has yielded new insights analysis in previous studies has been limited to models in which separations occur only in the final period of the model in this paper a simple multiperiod model is developed in which separations may occur in each of several successive periods the multiperiod specification enables us to distinguish between temporary and permanent separations and to focus attention on the potential for inefficient separations induced by asymmetric information problems in an intertemporal setting in an intertemporal model in which separations may occur in any one of several successive periods intertemporal allocation problems arise because compensation in a given period plays an allocative role not only in that particular period but also in all periods prior to that period that the terms of compensation may play a multiple intertemporal role in allocating labor has been recognized previously in other contexts for instance this argument has been used to explain the observed occurrence of rising wage profiles with tenure in the presence of such factors as worker shirking or firm specific skill acquisition 2 9 in this asymmetric information setting intertemporal allocation problems

labor market flows in the cross section and over time many theoretical models of labor market search imply a tight link between worker flows hires and separations and job gains and losses at the employer level we use rich establishment level data to assess several theoretical models and to study the relationship between worker flows and jobs flows hires quits and layoffs exhibit strong highly nonlinear relationships to employer growth rates in the cross section simple statistical models of these relationships greatly improve our ability to account for fluctuations in aggregate worker flows and enable us to construct synthetic measures of hires separations quits and layoffs back to 1990

two sided uncertainty and up or out contracts a bilateral moral hazard problem provides a rationale for up or out employment contracts the employer sets a wage higher than opportunity cost to induce the worker to invest in firm specific capital if the individual does not make the grade it is in the firm s interest ex post to fire him had the initial arrangement not included provisions for firing individuals the firm would underreport the value of the employee wrecking the incentive scheme the basic model permits both firm and worker to be risk neutral therefore it admits a straightforward multiperiod extension which we also investigate

media exposure and internal migration evidence from indonesia abstract this paper investigates the impact of television on internal migration in indonesia we exploit the differential introduction of private television throughout the country and the variation in signal reception due to topography to estimate the causal effect of media exposure our estimates reveal important long and short run effects an increase of one standard deviation in the number of private tv channels received in the area of residence as an adolescent reduces future inter provincial migration by 1 7 2 7 percentage points and all migration inter and intra provincial by 3 9 6 8 percentage points short run effects are similar in magnitude we also show that respondents less exposed to private television are more likely to consider themselves among the poorest groups in society as we discuss in a stylized model of migration choice under imperfect information these findings are consistent with indonesian citizens over estimating the net gains from internal migration when access to television is limited

the social efficiency of fixed wages this paper analyzes a model in which fixed wages and layoffs may be the most efficient way to organize employment contracts when wages fluctuate to reallocate labor among firms workers must make costly decisions and may undertake excessive search in contrast if all firms reallocate labor with layoffs and new hires at fixed wages only those workers laid off will have decisions to make the lower decision costs of the fixed wage contract may more than compensate for the resource cost of the unemployment it causes a novel feature of the model is the result that the socially optimal contract when chosen by all firms may not be the privately optimal contract

a new theory of corporatism and wage setting abstract the standard view on corporatist institutions for wage setting in many european economies is based of the insider outsider model corporatism is associated with lack of wage flexibility this paper discusses a new approach starting from the importance of nominal contracts the rationale for these contracts is to avoid future bargaining adjusting these contracts ex post to aggregate shocks would raise their efficiency however avoiding the bargaining required for this adjustment was the main reason for negotiating these contracts in the first place this is the fundamental contradiction under corporatism outside institutions can play this role these institutions provide therefore a type of flexibility not available in decentralized economies empirical evidence supports the basic ideas of this model

migrations risks and uncertainty a field experiment in china abstract we report data from the first incentivized artefactual field experiment conducted in china to understand whether chinese migrants differ from non migrants in terms of preferences regarding risk and uncertainty in various contexts we find that compared to non migrants migrants are significantly more likely to enter competitions when they expect competitive entries from others however migrants are not different from non migrants in risk and ambiguity preferences where strategic uncertainty is absent our results suggest that migration may be driven more by a stronger belief in one s chance of succeeding in an uncertain competitive environment than by differences risk attitudes related to state uncertainty

bumping layoffs and worksharing this paper deals with an interesting but often neglected labor practice prevalent in large north american firms with well developed internal labor markets large north american firms typically respond to a decline in demand for their products by first reducing the number of hours worked or worksharing as the demand continues to fall however they begin to make skilled workers bump onto unskilled jobs displacing unskilled workers skilled workers are laid off only after a considerable number have bumped i develop an implicit contract model and explain the practice

the mobility of highly skilled human capital in taiwan most economists agree that a country s economic growth depends on human capital physical capital technology and several other minor inputs human capital is the basic wealth of every country highly skilled workers are the most important component of human capital human capital can have a positive spillover effect on society when talented young people leave their native country to work elsewhere this brain drain inhibits the country s economic growth several factors contribute to brain drain these can be classified roughly into three categories economic academic and personal economic factors play the most important role from the early 1960s to the late 1980s taiwan suffered a brain drain when many people who had earned advanced degrees in western countries chose to leave taiwan to work elsewhere in this study s statistical analysis i show that taiwan s economy is based in past on an effective labour force and explain why taiwan s economy has grown over the past 30 years with the improved e

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

golden cages for showy birds optimal switching costs in labor contracts under what circumstances do workers sign contracts with high quitting penalties our answer points to market transparency when the worker s performance is privately observed by the incumbent 4rm alternative employers face an adverse selection problem as a result e7cient separations can only take place through involuntary layo8s and there is no role for quitting fees in contrast when performance is public quitting fees are useful devices to appropriate the surplus from workers reallocation separations are amicable and take the form of quitting after downwardly renegotiating the fees qualitative features of contracts are independent of the distribution of ex post bargaining power the impact of switching costs on total welfare and its distribution depends on the degree of market transparency and the ex ante distribution of market power c

policy analysis for an amicable efficient and sustainable inter country fresh water resource allocation abstract in the area of fresh surface water resources which are gradually becoming more scarce sustainable utilization implies the need for policies aiming to provide adequate water supplies for everyone in both national and international contexts many international river basins are shared without any formal intergovernmental agreement while bilateral agreements guaranteeing amicable cooperation amount to a handful this paper presents a simple economic ecologic model within which it examines input output controls social input prices bilateral water trade a water market for all water users and a fixed water allocation agreement as possible water policies for cross border river water sharing all of these policies can satisfy the conditions for maximum joint economic benefits while simultaneously working towards maintaining the functional integrity of river ecosystems in theory therefore these policies are of equal use there are however several costs associated with policy administration which are hidden and must explicitly be taken into account the analysis indicates that bilateral water trade can prove a workable efficient and sustainable policy for cross border water sharing

the excess sensitivity of layoffs and quits to demand excessive layoffs in bad times and excessive quits in good times both stem from the same weakness in practical employment arrangements the specific nature of worker firm relations creates a situat

bilateral trading as an efficient auction over time a market composed of pairwise trading under incomplete information is modeled in order to analyze how resources are allocated among competing uses when information about trade gains is incomplete contrary to the results from studying a single such trade sufficient homogeneity across potential trades guarantees that efficiency obtains this is analogous to simple first price auctions with homogeneous bidders where bidders have a common bid function and as a result the high bidder also places the highest value on the auctioned object with enough symmetry the decentralized bilateral trades in the present model occur as if they were made in a first price auction that occurs through time the robustness of the efficiency result to heterogeneities among agents and to nontrivial search intensity decisions is then considered

worker separations in a nonstationary corporate environment abstract assessing ten years of unique personnel data from a large firm this paper investigates how determinants of worker turnover differ between periods of corporate expansion and decline performance and career progress considerably reduce the hazard of job separation during downsizing for blue collar workers but are less important for white collar workers effects of firm tenure occupation education training part time status and gender are largely in accordance with the implications from existing models but no model generates all patterns observed in the data age effects are sensitive to retirement options and discontinuous dropping in response to the anticipation of becoming eligible for early retirement during downsizing and jumping at the actual retirement age

regional disadvantage employee non compete agreements and brain drain abstract a growing body of research has documented the local impact of employee non compete agreements but their effect on interstate migration patterns remains unexplored exploiting an inadvertent policy reversal in michigan as a natural experiment we show that non compete agreements are responsible for a brain drain of knowledge workers out of states that enforce such contracts to states where they are not enforceable importantly this effect is felt most strongly on the margin of workers who are more collaborative and whose work is more impactful

money and votes reconsidered congressional elections 1972 1982 the evolution of congressional campaign finance over the past decade is characterized by steady growth in campaign spending and other notable changes in campaign finance practices the main purpose of the research reported here was to determine whether these changes have altered the effects of campaign spending on election outcomes this required reexamination of auxiliary questions concerning how sending effects operate and can be measured it also required facing the limits of what analysis of aggregate campaign spending data can tell us about money in elections replication of ols and 2sls analyses of campaign spending effects produced solidly consistent results over the six congressional elections held between 1972 and 1982 taken at face value the evidence is overwhelming that the challenger s level of spending has a strong impact on the vote whereas that of the incumbent has virtually no impact at all but the evidence remains open to doubt on two grounds one is the probable inadequacy of the 2sls model or perhaps any possible model leaving the issue of simultaneity bias unsettled if bias remains the estimates exaggerate the electoral effects of the challenger s campaign expenditures the issue cannot be resolved with more of the same data but rather requires data of a different sort surveys taken over the course of a sample of campaigns would do the trick meanwhile i think it would be foolish to make policy on the assumption that bias is in fact substantial the greatest likelihood remains that restrictions on campaign money will have the general effect of hurting challengers jacobson 1979 the other doubtful albeit equally stable finding is that incumbents do not gain votes by spending in campaigns no incumbent seems to believe it and there is at least circumstantial evidence from for example the 1982 elections that their skepticism is quite justified if so the problem lies in the limits of what aggregate data of the kind analyzed here can tell us few incumbents do not spend heavily when they are strongly challenged if both candidates spend beyond the point needed to become thoroughly familiar to voters then the substance of the campaigns the contents of campaign messages become the dominant factors incumbents may need to spend money in order to change the message as new circumstances arise to frame new issues that would help them most or damage them least to win the battle of establishing the real issues like nonincumbents sitting members may sometimes need to spend beyond a certain threshold to remain competitive but nearly all of them do so when the necessity arises so aggregate spending data are largely uninformative how the money is spent rather than how much is what matters the two most notable developments in congressional campaign finance have opposing implications national party organizations particularly the republican have assumed an increasingly important role in financing campaigns greater central control leads to a more efficient distribution of the party s collective campaign resources which among other things promises to raise the overall level of electoral competition it also leads to more coordinated campaigning with greater emphasis on national themes and programs thus it should foster more cooperation and loyalty among fellow partisans in congress but pacs have also grown in numbers and in financial importance because most concentrate on gaining access to incumbents they do little to make elections more competitive because they usually pursue narrowly defined interests their influence fragments the congress and weakens party coalitions in this and other ways parties and pacs are natural rivals the most consequential decisions taken in the next round in campaign finance policy will be those which affect the relative importance of parties and pacs see u s congress 1984 for comments on this and other current campaign finance issues

on the prevalence of labor contracts with fixed duration the prevalence of labor contracts with fixed duration seems surprising why is a fixed duration preferred to a stochastic duration that depends on the consumer price index in this paper the specification of the contract duration is determined endogenously the wage rate can be indexed to the consumer price index but there is a loss since the indexation must be the same for different types of shocks this loss increases with the variability of the contract duration since the loss due to the contracting cost depends on the expected discounted duration only a fixed duration is chosen copyright 1992 by american economic association

firm specific human capital as a shared investment comment employment relationships typically involve the division of surplus surplus can be the result of a good match a monopoly rent or a quasirent that arises because of a specific investment the division of this surplus is of economic interest as it is a determinant of turnover investment and wages gary s becker 1962 argued in the context of specific human capital investments that the incumbent employee and firm will share the surplus this notion was formalized in a prototypical model of surplus sharing as first proposed by masanori hashimoto 1981 the model has been studied extensively among others by h lorne carmichael 1983 robert e hall and edward p lazear 1984 and donald o parsons 1986 while elizabeth becker and cotton m lindsay 1994 provide an empirical application the key feature of the model is the existence of transaction costs both the employee and the firm have ex ante uncertain private information on which they cannot write a contingent contract this makes that they write a nonrenegotiable contract that specifies a fixed wage after this the firm learns the value of the employee s marginal product whereas the employee learns the value of his outside option both parties then decide unilaterally whether to separate or not and inefficient separations may occur the wage is set in such a way as to maximize the expected total surplus the present analysis will consider the role of uncertainty in this model this has not been done before in a rigorous way hashimoto considered only degenerate cases his analysis suggests that the wage will be low when the uncertainty of the market conditions is small and high when the uncertainty of the conditions inside the firm is small parsons 1986 makes a claim that this is actually the case without deriving the result this paper shows that the comparative statics are ambiguous and may well be the opposite of those suggested by hashimoto and claimed by parsons it also provides the intuition that is behind this result namely that uncertainty not only influences turnover but also the option value of the match and its opportunity cost section i briefly summarizes hashimoto s model and shows that without further assumptions the comparative statics are ambiguous section ii derives an explicit solution of the wage section iii briefly considers alternative wage setting schemes and section iv concludes

some economic determinants of third world professional immigration to the united states 1972 87 abstract we estimate reduced form equations for immigration to the united states by engineers natural and social scientists and physicians from 18 third world countries explanatory variables include income real gdp growth graduation in the united states and study in each country of origin additional explanatory variables are foreign student enrollment in the united states lagged immigration total immigration from each country and a dummy variable which accounts for implementation of restrictions on permanent visas in 1972 1973 results generally conform to expectations but differ across occupations and with model specification most income statistics are unexpected however and the strong correlation of us income with graduation in the united states suggests that there is a simultaneity problem in models which include income because immigration appears to respond to labor shortages in the united states and surpluses in countries of origin our results suggest that us immigration quotas have not prevented third world professionals from responding to economic incentives

migration human capital accumulation and economic development we study how the possibility of migration changes the composition of human capital in sending countries and how this affects development in our model growth is driven by productivity growth which occurs via imitation or innovation both activities use the same types of skilled labour as input albeit with different intensities heterogenous agents accumulate skills in response to economic incentives migration distorts these incentives and the accumulation of human capital this slows down or even hinders economic development the effect is stronger the farther away the country is from the technological frontier

a competitive model of worker replacement and wage rigidity we adapt the models of menzio and moen 2010 and snell and thomas 2010 to consider a labor market in which firms can commit to wage contracts but cannot commit not to replace incumbent workers workers are risk averse so that there exists an incentive for firms to smooth wages real wages respond in a highly nonlinear manner to shocks exhibiting downward rigidity and magnifying the response of unemployment to negative shocks we also consider layoffs and show that for a range of shocks labor hoarding occurs while wages are cut we argue these features are consistent with recent evidence jel e32 j41

term limits causes and consequences this paper consults multiple literatures to specify andevaluate the economic rationales for term limitation particularly on congress i first consider theories that aroseto explain among related issues why individual states mightunilaterally self impose term limits on their own delegationsto congress next i consider two main lines of argument foruniversal limits both of which begin with the empiricalphenomenon of high and rising congressional tenure first supporters of term limits argue that higher tenure biaseslegislatures toward inefficiency big government highspending second higher tenure creates inefficient anti competitive conditions in the legislative election market term limitation would remedy these inefficiencies by virtue ofdecreasing average tenure these claims are then evaluated inlight of the evidence amassed in the literature based on theliterature reviewed this paper finds that while term limitswill reduce average tenure there is no evidence to suggestthat term limits will affect the underlying causes of theseinefficiencies further research on a more general reform which would strike deeper at these underlying causes isimplied

the macroeconomics of specificity specific quasi rents arise in a variety of economic relationships and are exposed to opportunism unless fully protected by contract rent appropriation has important macroeconomic consequences resources are underutilized factor markets are segmented production suffers from technological sclerosis job creation and destruction are unbalanced recessions are excessively sharp and expansions run into bottlenecks while depending on the shock expansions may require reinforcement or stabilization recessions should typically be softened in the long run institutions may evolve to alleviate the problem by balancing appropriation technology choice will also be affected with the appropriated factor partially excluding the other from production to reduce appropriation

contract form wage flexibility and employment we begin with two uncontroversial hypotheses firm productivity is expensive to measure and employment entails relationship specific investments these assumptions imply that firms would optimally choose fixed wage contracts and complement these with bonus pay when measuring employee performance is not too costly these assumptions imply that under an optimal employment contract hours of work is less responsive while total compensation is more responsive to shocks under bonus pay contracts compared to fixed wage contracts using data from the panel study of income dynamics psid where shocks are proxied using the local unemployment rate we find strong support for these two implications

skills and the pattern of migration the role of qualitative and quantitative restrictions on international labor mobility this paper develops a two country model of international migration in an attempt to study the role of both qualitative and quantitative restrictions on international labor mobility individuals are distinguished in terms of their ability and age enabling the model to examine factors which influence the age and skill profile of those who migrate as well as the equilibrium flow of migrants and the pattern of factor rewards in the two economies effects of changes in certain parameters of the model are related to the nature of the immigration policy enforced by the host country the role of emigration restrictions is also considered excerpt

brain drain and ldcs growth winners and losers we present an empirical evaluation of the growth e ects of the brain drain for the source countries of migrants using recent us data on migration rates by education levels carrington and detragiache 1998 we nd empirical support for the bene cial brain drain hypothesis in a sample of 50 developing countries at the country level we distinguish between winners and losers among source countries while the number of winners is smaller these include nearly 80 of the total population of developing countries jel classi cation f22 j24 o15

a theory of quits and layoffs with efficient turnover this paper answers the efficient turnover literature s long silence regarding the quit layoff distinction treating quits as worker initiated separations and layoffs as firm initiated separations i establish that the existence of layoffs is compatible with optimizing workers and firms forming and dissolving employment matches to exploit all the gains from trade the efficient turnover approach is shown to be consistent with many empirical regularities that distinguish quits from layoffs structural implications of the model are tested on data from the psid

the behavioral life cycle hypothesis self control mental accounting and framing are incorporated in a behavioral enrichment of the life cycle theory of saving called the behavioral life cycle blc hypothesis the key assumption of the blc theory is that households treat components of their wealth as nonfungible even in the absence of credit rationing specifically wealth is assumed to be divided into three mental accounts current income current assets and future income the temptation to spend is assumed to be greatest for current income and least for future income considerable empirical support for the blc theory is presented primarily drawn from published econometric studies

laissez faire in campaign finance in this paper we analyze the impact of campaign contribution limits on government expenditures the theory is based on the proclivity of geographic based legislators to support wealth transfers from the polity at large to finance benefits for local constituents it predicts that laissez faire in contributions will lead to less government spending on budgetary redistribution and to a greater output of laws by the legislature the theory is tested using data on u s state governments

return migration human capital accumulation and the brain drain in this paper we present a model that explains migrations as decisions that respond to where human capital can be acquired more efficiently and where the return to human capital is highest the basic framework is a dynamic roy model in which a worker possesses two distinct skills that can be augmented by learning by doing there are different implicit price in different countries and different rates of skill accumulation our analysis contributes to the literature on the selection of immigrants and return migrants by offering a richer framework that may help to accommodate selections of emigrants and return migrants that are not immediately compatible with the one dimensional skill model our analysis has also implications for the debate on brain drain and brain gain in the two skills model presented here return migration can lead to a mitigation of the brain drain or even the creation of a brain gain where those who return bring the home country augmented local skills

options to quit abstract this paper develops a theoretical model of a worker s decision problem under uncertainty about the optimal separation time when holding a representative outside offer but facing fixed costs of quitting implications of the model s closed form solution are consistent with the quit behavior of workers from a large dutch company

the behavioral relevance of mental accounting for the pricing of financial options abstract the paper reports an experiment on the pricing of financial options arbitrage free option pricing is tested against three hypotheses based on mental accounting the data show that even with considerable experience unexploited arbitrage opportunities persist subjects do not seem to make the connections between the different investment possibilities as essential for arbitrage free pricing afp instead they act as if they associate the risky assets to the same mental account while the bond is treated separately this corresponds to the construction of a two layer portfolio of a risky and a safe layer in the behavioral portfolio theory of shefrin and statman j fin quant anal 35 2000 127

composition and determinants of the skilled out migration in the brazilian formal labor market a panel data analysis from 1995 to 2006 this paper aims to examine the composition and identify determinant factors of interstate the skilled labor loss in the brazilian formal labor market between 1995 and 2006 with emphasis on the role of individual motivations and regional factors in order to estimate such determinants we use a fixed effect logit in a wide panel with data from ministry of labor and employment rais migra annual report on social information and ibge the brazilian statistics bureau the estimated results confirm the importance of wage differentials in determining such mobility furthermore an increased skilled out migration probability is explained by skilled workers heading to states showing economic prosperity higher dynamism in the labor market as well as higher population density 2014 national association of postgraduate centers in economics anpec production and hosting by elsevier b v all rights reserved

globalization brain drain and development this paper reviews four decades of economics research on the brain drain with a focus on recent contributions and on development issues we first assess the magnitude intensity and determinants of the brain drain showing that brain drain or high skill migration is becoming a dominant pattern of international migration and a major aspect of globalization we then use a stylized growth model to analyze the various channels through which a brain drain affects the sending countries and review the evidence on these channels the recent empirical literature shows that high skill emigration need not deplete a country s human capital stock and can generate positive network externalities three case studies are also considered the african medical brain drain the exodus of european scientists to the united states and the role of the indian diaspora in the development of india s information technology sector we conclude with a discussion of the implications of the analysis for education immigration and international taxation policies in a global context

migration and asymmetric information comment a comment on an article by viem kwok and hayne leland concerning the relationship between asymmetric information and the brain drain of skilled labor from developing countries is presented a reply by kwok and leland p 535 is also included annotation

international migration under asymmetric information international migration under asymmetric information usually differs from international migration under symmetric information and often quite dramatically so and in counterintuitive ways since in real life information is indeed asymmetric it is somewhat surprising that hitherto the study of international migration has by and large proceeded without explicit recognition of the effect of informational asymmetry in this paper we show that when at the lowest skill level migration is desirable i e if the discounted wage differential is positive for the lowest skill level the introduction of asymmetric information results in a reduction of the quality and quantity of international migration or has no effect at all when at the lowest skill level migration is not desirable the discounted differential is not positive at the lowest skill level the introduction of asymmetric information may either result in migration by all or none when under asymmetric information workers can at some cost to themselves report to foreign employers their individual skill thus dissociate themselves from the group effect then provided the cost is small either a u pattern of migration with respect to skill level emerges or migration is uniformly pursued by all though some do and some do not invest in signalling when the source consists of more than 1 poor country it is impossible to predict migration under asymmetric information from a given country without explicitly accounting for changes in the parameters of the other for example a favorable change encouraging less migration taking place in 1 country will through a distinct impact on the overall composition of migration reduce migration from the other country finally allowing employers to discover after a while the true productivity of individual migrant workers we obtain the somewhat surprising result that under a reasonable set of assumptions eventual discovery may increase the quantity and quality of migration and also increase the wage enjoyed by the low quality migrants eventual discovery serves to mitigate the impact of group averaging that deters migration by the high skill workers due to migration of some such workers the prediscovery wage of the low skill workers arises in our case sufficiently to outweigh the effect of the future wage decline due to discovery authors

money and votes a simultaneous equation model this paper has specified and estimated a model of the interaction between money and voting in american politics convincingly establishing the identification of a system of equations can be difficult even when theory provides a guide in the study of money in politics however no theoretical perspective has been established in the literature to make the case for identification as unambiguous as possible this paper has done two things first the specification was based in part on theory which has formally been developed elsewhere and which satisfactorily describes data at the economic interest group level welch 1980 second part of the question of identification revolves around the relationship between party strength and socioeconomic variables because there are questions as to the best measurement of party strength results based on two measures were presented for a number of reasons the presidential vote was the preferred measure this study draws four conclusions first money influenced voting in u s house elections in 1972 although its effect was small second patterns of total contributions to a u s house candidate are consistent with the hypothesis that a majority of dollars come from contributors who prefer to support likely winners third the total contributions made to a candidate are a positive function of the district s median years of schooling completed and the gini coefficient total contributions made to a democratic candidate are also a positive function of the median income finally had house campaigns been financed in the early 1970s even to the point of giving each major party candidate 150 000 in 1978 dollars few elections would have been changed it is also worth mentioning some of the things about the financing of political campaigns that we still do not know the above conclusions involve only elections to the u s house there are good reasons for suspecting that money is more influential in u s senate elections ols statistics support this belief and the greater visibility of those races help justify it although money has little effect on house elections we do not know whether contributions affect legislative voting in the house representatives apparently believe that expenditure influences their reelection chances given the complexity of the process it should be no surprise that this belief conflicts with our findings acting on this belief a representative s vote may very well be influenced by the sources of his contributions either directly or indirectly through the giving of access to contributors finally we should be reminded that the above model is static while the electoral process is dynamic the amount contributed to a candidate is affected by his probability of winning in the previous time period e g week month and in turn affects that probability in the following time period as usual what we know is overshadowed by what we do not know the above questions are both interesting in their own right and of interest to policy making

a brain gain or a brain drain migration endogenous fertility and human capital formation i introduction it is traditionally argued that openness to international migration within a developing country can cause high skilled workers to emigrate and thereby create a brain drain problem 1 however it has been demonstrated in recent studies that such openness to international migration raises the return on human capital in a developing country which in turn raises the average level of human capital in the source country 2 this article revisits this issue building on the prior studies by examining the impact of migration on economic growth through the role of human capital there are however three features that distinguish this article from the prior works first of all while most of the prior studies on migration have tended to focus solely on static models so as to simplify their analyses we develop a dynamic model of migration within which endogenous growth is generated 3 this dynamic model enables us to study the dynamic behavior of the economy and to separate the short run effects from the long run effects when there are changes in migration policy an endogenous growth model is constructed in this article to allow for the persistent growth of a source country hence we contribute to two strands of the literature international migration and the endogenous growth model we also show that under certain conditions the balanced growth path bgp may exist to the best of our knowledge this is the first article to consider the possibility of the bgp within a migration model second we endogenize the fertility choice within the model it is already widely acknowledged that fertility and education are interdependent decisions for parents indeed becker murphy and tamura 1990 developed a model to examine the way s in which the joint decisions on fertility and education affect economic growth while the linkage between growth and inequality was subsequently explored when differential fertility matters by de la croix and doepke 2003 however the studies on migration have tended to assume a constant population growth rate and have generally not taken into account fertility decisions examples include rodriguez 1975 and mountford 1997 both of which presented dynamic models to study the issues of migration and economic growth in both cases population was taken as an exogenous variable and was assumed to grow at a constant rate in this article we allow parents to make fertility and education decisions and to have an opportunity to migrate to a foreign country internalizing fertility decisions induces a trade off between the quality and the quantity of children when there are changes in migration policy this trade off will then have an effect on economic growth as a result of its direct effect on the accumulation of human capital fertility does matter when considering an economy with heterogeneous agents since it will also affect the structure of the labor force third we include the average costs involved in preparing each migrating child to overcome the various barriers when migrating to foreign countries with different backgrounds languages and cultures a static model with migration costs such as language skills preparation was developed by lien and wang 2005 in which they found that when including such costs the openness to international migration may well create a brain drain since it is quite common for the governments of developing countries to encourage their citizens to migrate to certain foreign countries the inclusion of the costs of migration allows us to study the impact of these policies we develop a migration model within which agents differ from one another based upon their different endowments of human capital considering two alternative scenarios to facilitate our examination of the effects of migration on economic performance in the first scenario we consider the case where the host country cannot differentiate between the abilities of the migrants as a result of asymmetric information between the host country and the migrants

brain drain and development traps abstract this paper links the two fields of development traps and brain drain we construct a model which integrates endogenous international migration into a simple growth model as a result the dynamics of the economy can feature some underdevelopment traps an economy starting with a low level of human capital can be caught in a vicious circle where low level of human capital leads to low wages and low wages leads to emigration of valuable human capital we also show that our model displays a rich array of different dynamic regimes including the above traps but other regimes as well and we link explicitly the nature of the regimes to technology and policy parameters

monopsony and the lifetime relation between wages and productivity we consider the relation between wages and productivity by means of a model based on the following assumptions workers live for 2 periods firms live forever senior workers differ nontrivially from junior seniority enhances workers expected second period earnings both firms and workers recognize the prospect of promotion and the senior junior wage differential at the time of hiring and firms have monopsony power in hiring junior workers we show that senior wages are equal to the senior marginal product but junior wages are set below the junior marginal product by an amount that depends on the elasticity of the firm s labor supply

are immigrants favorably self selected one of the standard propositions in the migration literature is that migrants tend to be favorably self selected for labor market success that is economic migrants are described as tending on average to be more able ambitious aggressive entrepreneurial or otherwise more favorably selected than similar individuals who choose to remain in their place of origin in recent years there have been challenges to the general proposition of the favorable selectivity of migrants in addressing this issue this paper considers alternative specifications of the migration model that are relevant for the issue of migrant selectivity excerpt

labor contracts with voluntary quits this paper considers labor contracts between the risk neutral firm and risk averse workers with heterogeneous outside opportunities alternative wages which become known to the worker after a costly on the job search in the case of a deterministic alternative wage self selection over a menu of contract wages would achieve the first best contract if the alternative wages are stochastic the second best contract emerges as a trade off between productive efficiency and risk sharing workers who voluntarily search are fewer and workers who search are less likely to quit if the search effort is not monitored even fewer workers search

sensitivity to market incentives the case of policy loans the standard neoclassical theory is rejected as an explanation for the observed reluctance of most holders of whole life insurance to borrow against the cash value of their policies at favorable rates of interest even when the neoclassical theory is augmented with transactions costs and short awareness lags several empirical tests using survey and time series data reject the standard theory in favor of an explanation invoking self imposed rules against borrowing or the debt ethic this evidence lends support to the psychology based theories of thaler and shefrin 1981 copyright 1987 by mit press

wage bargaining labor turnover and the business cycle a model with asymmetric information this paper presents a wage bargaining model in which the employer and employee are each uncertain about the other s reservation wage under specified circumstances the model s equilibrium is shown to involve unilateral wage setting and inefficient labor turnover in addition aggregate demand shocks affect the equilibrium in a way that produces procyclical quits and countercyclical layoffs these results are obtained without resorting to assumptions of nominal wage rigidity long term contracting or aggregate price misperceptions

pension portability and labor market efficiency a survey of the literature this paper reviews the theoretical and empirical literature evaluating the labor market effects of policies to enhance pension portability one perspective is that reducing the cost of job change w

international migration imperfect information and brain drain we consider a model of international migration where skills of workers are imperfectly observed by firms in the host country and where information asymmetries are more severe for immigrants than f

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

imperfect information and labor market bias against small and medium sized enterprises a korean case we examine the labor market s bias against small and medium sized enterprises focusing on the seoul digital industrial complex case we adopt heckman s approach to control selection bias and use primary data from questionnaire surveys conducted at both firm and employee levels we find that conventional firm specific factors such as wages fringe benefits and weekly work hours primarily explain the labor market bias but imperfect information is also positively associated with the bias for example a firm s inadequate ability to identify a pool of potential employee candidates or to provide them comprehensive firm or job specific information tends to worsen labor shortages and an employee s ex ante incomplete knowledge of on the job training or education opportunities tends to increase ex post turnover intentions our results suggest that reducing the market bias requires improving imperfect information as well as conventional firm specific conditions

a back door brain drain abstract the long run effect of migration solely by unskilled workers is that skilled workers in the home country acquire additional human capital yet their share in the country s workforce falls consequently the country s average level of human capital is lowered

motivations of south african emigrants reasons for emigration from south africa particularly of professionals are investigated using data from a recent survey the authors conclude that although direct fear of potential violence is not a major factor emigrants are concerned about changes in living standards resulting from economic problems or changes in government structure annotation

does brain drain lead to institutional gain a country s endowment of human capital affects its institutions through various channels this raises the possibility that skilled emigration can leave its mark on a country s institutional development we explore the impact of emigrant human capital on home country s institutional quality using geographical and genetic distance based instrumental variables for emigration and a dynamic panel estimation method we find that human capital emigration helps the home country s political institutions but hurts economic institutions the conventional brain drain argument therefore needs to incorporate the institutional changes due to skilled labour emigration

economic analysis of brain drain abstract in this paper we consider the brain drain problem arising from the possibility of signaling and individual s two stage decision procedures within an asymmetric information framework where the ranking of the universities provides a signal to domestic employers our results indicate that at rational expectations equilibrium there is an association between students of a particular quality and corresponding qualities of universities they will choose to attend to attain ph d s moreover we can predict whether these graduating ph d s choose to return home or remain abroad

the economics of private sector training a survey of the literature abstract this survey organizes and summarizes existing theoretical work on private sector training the theoretical models focus on investment efficiency finance and turnover recent developments in the on the job training literature are characterized by strategic interaction between employers and employees and emphasize market imperfections

statistical discrimination productivity and the height of immigrants building on the economic research that demonstrates a positive relationship between height and worker ability the author compares wage returns to height for immigrants and for natives to explore possible explanations for the positive wage height gradient using multiple data sets the article presents a robust empirical finding that the wage gains associated with height are almost twice as large for immigrants as for native born individuals this wage relationship occurs because the productivity gap between tall and short immigrants is greater than the productivity gap between tall and short native born workers the author next tests for the possibility that in the relative absence of other sources of information about immigrants employers place more importance on height for immigrants than for native born individuals the evidence does not support the hypothesis of statistical discrimination based on height

human capital investment specialization and the wage effects of voluntary labor mobility ahstract analyses of voluntary labor mobility suggest that job search facilitates job change while specific training inhibits mobility further given that specific skills cannot be transferred between jobs and since both search and training are costly it is reasonable for workers to specialize in search or specific training on a given job training or search specialization however implies that estimation methods which treat the incidence of a quit as exogenous underestimate mobility effects on wages the larger wage effects reported here result from simultaneous estimation but also reflect more accurate measurement of wage growth between jobs

international labour migration under alternative informational regimes a diagrammatic analysis abstract international migration under asymmetric information usually diners from international migration under symmetric information in this paper we show that when at the lowest skill level migration is desirable the introduction of asymmetric information results in a reduction of the quality and quantity of international migration or has no effect at all when at the lowest skill level migration is not desirable the introduction of asymmetric information may either result in migration by all or by none allowing employers to discover after a while the true productivity of individual migrant workers we obtain the somewhat surprising result that under a reasonable set of assumptions eventual discovery may increase the quantity and quality of migration and also increase the wage enjoyed by the low quality migrants

the fiscal impact of high skilled emigration flows of indians to the u s abstract what are the fiscal consequences of high skilled emigration for source countries this paper develops methodologies for inferring these consequences and applies them to the recent sizable emigration of high skilled workers from india to the u s this wave of emigration from india to the u s is shown to be unusually concentrated amongst the prime age work force the highly educated and high earners in order to calculate the fiscal losses associated with these emigrants estimates of their counterfactual earnings distributions are generated using two distinct methods and integrated with a model of the indian fiscal system to calculate fiscal consequences conservative estimates indicate that the annual net fiscal impact to india of high skilled emigration to the u s is one half of 1 of gross national income or 2 5 of total fiscal revenues the sensitivity of these results to the method of predicting counterfactual incomes and the implications of these estimates for other developing countries is discussed in detail

wage prospects and the existence of job queues when the wage is a sorting device abstract we consider a labor market where information is asymmetric previous research suggests that excess supply may result in this situation we find no excess supply if labor suppliers respond to wage prospects the wage times the probability of employment

100 bills on the sidewalk suboptimal investment in 401 k plans we identify employees at seven companies whose 401 k investment choices are dominated because they are contributing less than the employer matching contribution threshold despite being vested in their match and being able to make penalty free 401 k withdrawals for any reason because they are older than 59 at the average firm 36 of match eligible employees over 59 forego arbitrage profits that average 1 6 of their annual pay or 507 a survey educating employees about the free lunch they are foregoing raised contribution rates by a statistically insignificant 0 67 percent of income among those completing the survey

young workers and quit behaviour a model is set up to explain the quit behaviour of new entrants to the labour market it uses an incentive opportunity approach to integrate existing relevant arguments from search and information theory and human capital analysis it also provides for impetuous quits the model is tested by an examination of a disaggregated data set concerning a single cohort of 16 year old school leavers in the first year after gaining full time work the theory received strong support for example in the main model seven out of the ten coefficients were highly significant interestingly even in a time of deepening recession the existence of the job shopper seemed to be apparent

an economic model of the brain drain asymmetric information in the labor market is discussed as a major cause of the exodus of foreign trained students from developing countries the authors suggest that employers in the country in which the students have been trained have a more accurate judgment of the true productivity of students than have employers in the students native country an illustrative numerical model is developed and its implications are analyzed annotation

on the mechanics of migration decisions skill complementarities and endogenous price differentials abstract why are highly skilled workers more responsive than other workers to productivity differentials when taking migration decisions why do low skilled workers abandon rich regions this paper aims to answer these questions using skill complementarities and endogenous price differentials between rich and poor regions if the skill premium is increasing in the average level of human capital of a location the more skilled the workers are the stronger the economic incentives to migrate to the rich regions become in contrast the low skilled workers have an incentive to migrate to the poor regions to minimize their living costs

labor mobility under asymmetric information with moving and signalling costs abstract information about the true skill level of individual workers may not flow freely across labor markets or between firms and though available to the workers themselves may not be equally available to some employers consequently the level and composition of labor mobility is affected in this paper we derive some results concerning the impact of moving costs in conjunction with informational asymmetry upon the level of labor mobility the skill level of those who move and the effect upon both these variables of costly signalling

general productivity growth in a theory of quits and layoffs an efficient matching model of quits and layoffs is developed to account for several empirical regularities differences between quits and layoffs over the life and business cycles and across demographic groups are generated by differential rates of general productivity growth the standard approach to quits and layoffs based on wage rigidity is shown to be incapable of accounting for many of the empirical regularities although a formal test rejects a structural prediction of the efficient turnover model the specification does well in predicting both the level of and time series variation in the fraction of separations labeled quits