does working from home work evidence from a chinese experiment about 10 of us employees now regularly work from home wfh but there are concerns this can lead to shirking from home we report the results of a wfh experiment at ctrip a 16 000 employee nasdaq listed chinese travel agency call center employees who volunteered to wfh were randomly assigned to work from home or in the office for 9 months home working led to a 13 performance increase of which about 9 was from working more minutes per shift fewer breaks and sick days and 4 from more calls per minute attributed to a quieter working environment home workers also reported improved work satisfaction and experienced less turnover but their promotion rate conditional on performance fell due to the success of the experiment ctrip rolled out the option to wfh to the whole firm and allowed the experimental employees to re select between the home or office interestingly over half of them switched which led to the gains from wfh almost doubling to 22 this highlights the benefits of learning and selection effects when adopting modern management practices like wfh

does education affect risk aversion evidence from the british education reform individual risk attitudes are frequently used to predict decisions regarding education however using risk attitudes as a control variable for decisions about education has been criticized because of the potential for reverse causality causality between risk aversion and education is unclear and disentangling the different directions it may run is difficult in this study we make the first attempt to investigate the causal effects of education on risk aversion by examining the british education reform of 1972 which increased the duration of compulsory schooling from age 15 to age 16 using regression discontinuity design we find that this additional year of schooling increases the level of risk aversion which is contrary to previous findings in the literature and we also find that this result is particularly strong for individuals with less education this positive causal effect of education on risk aversion might alleviate concerns regarding the endogeneity reverse causality issue when using risk aversion as an explanatory variable for decisions about education the sign would remain credible because the coefficients are underestimated

health expenditure growth looking beyond the average through decomposition of the full distribution explanations of growth in health expenditures have restricted attention to the mean we explain change throughout the distribution of expenditures providing insight into how expenditure growth and its explanation differ along the distribution we analyse dutch data on actual health expenditures linked to hospital discharge and mortality registers full distribution decomposition delivers findings that would be overlooked by examination of changes in the mean alone the growth rate of hospital expenditures is greatest at the middle of the distribution and is driven mainly by changes in the distributions of determinants pharmaceutical expenditures increase most rapidly at the top of the distribution and are mainly attributable to structural changes including technological progress making treatment of the highest cost cases even more expensive changes in hospital practice styles make the largest contribution of all determinants to increased spending not only on hospital care but also on pharmaceuticals suggesting important spill over effects

nonparametric bounds on the returns to language skills this paper applies the theoretical literature on nonparametric bounds on treatment effects to the estimation of how limited english proficiency lep affects wages and employment opportunities for hispanic workers in the united states i analyse the identifying power of several weak assumptions on treatment response and selection and stress the interactions between lep and education occupation and immigration status i show that the combination of two weak but credible assumptions provides informative upper bounds on the returns to language skills for certain subgroups of the population adding age at arrival as a monotone instrumental variable also provides informative lower bounds copyright 2005 john wiley sons ltd

individual risk attitudes measurement determinants and behavioral consequences this paper studies risk attitudes using a large representative survey and a complementary experiment conducted with a representative subject pool in subjects homes using a question asking people about their willingness to take risks in general we find that gender age height and parental background have an economically significant impact on willingness to take risks the experiment confirms the behavioral validity of this measure using paid lottery choices turning to other questions about risk attitudes in specific contexts we find similar results on the determinants of risk attitudes and also shed light on the deeper question of stability of risk attitudes across contexts we conduct a horse race of the ability of different measures to explain risky behaviors such as holdings stocks occupational choice and smoking the question about risk taking in general generates the best all round predictor of risky behavior

health shocks and risk aversion we empirically assess whether a health shock influences individual risk aversion we use grip strength data to obtain an objective health shock indicator in order to account for the non random nature of our data regression adjusted matching is employed risk preferences are traditionally assumed to be constant however we find that a health shock increases individual risk aversion the finding is robust to a series of sensitivity analyses and persists for at least four years after the shock income changes do not seem to be the driving mechanism

long term and spillover effects of health shocks on employment and income abstract we use matching combined with difference in differences to identify the causal effects of sudden illness represented by acute hospitalizations on employment and income up to six years after the health shock using linked dutch hospital and tax register data an acute hospital admission lowers the employment probability by seven percentage points and results in a 5 percent loss of personal income two years after the shock there is no subsequent recovery in either employment or income there are large spillover effects household income falls by 50 percent more than the income of the disabled person

immigrant participation in the welfare system this paper presents a systematic analysis of immigrant participation in the us welfare system using the 1970 and 1980 us censuses in contrast to the previous studies the researchers focused on changes in welfare use across immigrant cohorts over time for a single immigrant cohort as it assimilates to the us furthermore it develops a theoretical model of the migration decision that explicitly incorporates the income insurance aspect of the us welfare system the analysis revealed that recent immigrant cohorts use the welfare system more intensively than earlier immigrant waves also the immigrant welfare participation was greater the longer an immigrant household had resided in the us and those characteristics of the immigrants country of origin were important determinants of welfare participation in addition the theoretical model of the migration decision which explicitly incorporated the presence of a welfare system in the destination country and this model could account for some of the ways in which source country characteristics were found to affect immigrant welfare participation

the economic consequences of health shocks evidence from vietnam this paper finds that the incomes of urban households are more vulnerable to health shocks than rural households that health shocks may precipitate increases in unearned income that partially offset reductions in earned income and large increases in medical spending even among insured households it also finds that households spend less on food following a health shock but more on budget items such as housing and electricity measures of household health shocks used include a recent death of a working age household member a long inpatient spell and a recent sizeable drop in the body mass index of the household head

immigration and the family this article studies the role of the family in determining the skill composition and labor market experiences of immigrants in the united states our theoretical framework based on the assumption that family migration decisions maximize household income shows that the family attenuates the selection characterizing the skills of the immigrant population the empirical analysis uses the 1970 and 1980 public use samples of the u s census and reveals that an immigrant s skills and labor market performance are greatly influenced by the composition of the household at the time of migration and by his placement in the immigration chain

the impact of the 1962 repatriates from algeria on the french labor market this paper uses census data to examine the impact on the french labor market of the 900 000 people repatriated from algeria in 1962 repatriates settled in regions culturally and climatically simil

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

institutions health shocks and labour market outcomes across europe this paper investigates the relationship between health shocks and labour market outcomes in 9 european countries using the european community household panel matching techniques are used to control for the non experimental nature of the data the results suggest that there is a significant causal effect from health on the probability of employment individuals who incur a health shock are significantly more likely to leave employment and transit into disability the estimates differ across countries with the largest employment effects being found in the netherlands denmark spain and ireland and the smallest in france and italy differences in social security arrangements help to explain these cross country differences

violence and risk preference experimental evidence from afghanistan we investigate the relationship between violence and economic risk preferences in afghanistan combining i a two part experimental procedure identifying risk preferences violations of expected utility and specific preferences for certainty ii controlled recollection of fear based on established methods from psychology and iii administrative violence data from precisely geocoded military records we document a specific preference for certainty in violation of expected utility the preference for certainty which we term a certainty premium is exacerbated by the combination of violent exposure and controlled fearful recollections the results have implications for risk taking and are potentially actionable for policymakers and marketers

unemployment hysteresis in canada an approach based on long memory time series models long memory univariate time series models known as arfima are applied to measure shock persistence for canada and the usa both output and unemployment exhibit higher persistence in canada than in the usa the finding that the rate of unemployment in canada exhibits high shock persistence supports the notion of hysteresis in unemployment the analysis of disaggregated canadian unemployment rates indicates that hysteresis is most pronounced for adult male workers the same class of models is used to obtain a generalization of the beveridge nelson decomposition of time series into a permanent and a cyclical component the permanent component of the canadian unemployment rate exhibits a kink in the early 1970s

entrepreneurship social mobility and income redistribution in south india development economists have been preoccupied with the problem of increasing the size of the gnp pie to the relative neglect of its distribution despite the recent disenchantment with the viewpoint that all classes share in the benefits of industrial growth empirical data on the distribution of income business opportunity and economic power are in short supply many of the studies on entrepreneurship and economic development when they are not apologetics for ruthless capitalist exploitation as paul baran suggests extol the achievements of the capitalist entrepreneur without examining class origins and monopoly advantage joseph schumpeter sees entrepreneurs irrespective of class origin as heroic figures with the dream and will to found a private kingdom to conquer adversity to achieve success for its own sake and to experience the joy of creation for gustav papanek 1967 the private entrepreneur who is frugal diligent far sighted remarkably able and willing to take political risks is in large part responsible for the success of pakistan in achieving rapid industrialization

undocumented immigration and unemployment of u s youth and minority workers econometric evidence we use census based data on the state distribution of the undocumented alien population in analyzing the relationship between that population and unemployment among youth and minority workers in the united states regression results from our two equation models do not support commonly expressed fears that undocumented immigration has caused any substantial increases in joblessness among these presumably vulnerable groups although small amounts of displacement are indicated a sizeable reverse effect is evident undocumented immigrants tend to concentrate in states where labor markets for these marginal groups are most favorable excerpt

regional labor markets and the determinants of wage inequality from 1972 to 1990 the united states experienced the largest increase in wage inequality of any developed country the spread in log wages between the 90th and 10th percentiles of the male wage distribution increased by about 60 points and inequality increased within virtually every demographic or skill category of the labor force see chinhui juhn et al 1993 various explanations have been offered including changes in the relative demand for skill intensive goods international trade immigration of less skilled workers and increased labor force participation of women yet attempts to quantify the relative importance of these factors have not met with much success this leaves skill biased technical change as the residual claimant that rationalizes the data this paper uses regional differences in the evolution of wage inequality to provide new evidence on the determinants of relative wages using a model of factor demand in geographic markets i isolate contributions of i changing skill ratios in the labor force ii increased participation of women iii technical change and iv changes in the industrial composition of labor demand the data indicate that changing skill ratios and women s labor supply have affected the wages of low skilled men in the west the data indicate that increased immigration of less skilled hispanic and asian workers has adversely affected the wages of natives causing a greater increase in inequality there than in any other region of the country i modeling wage inequality in regional markets

diverging patterns with endogenous labor migration abstract the standard neoclassical model cannot explain persistent migration flows and lack of cross country convergence when capital and labor are mobile here we present a model where both phenomena may take place assuming increasing returns and perfect capital mobility the driving forces behind labor migration are the size and the composition of the workforce the size of the workforce produces divergence a larger workforce in one country implies higher wages the wage gap induces in migration and this makes the wage gap even larger in this case migration is only beneficial for the labor importing country the evolution in the composition of the workforce due to migration may have opposite effects in one case in migration keeps the wage of skilled workers high enough to induce people to qualify for skilled jobs this improves the composition of labor in the receiving country only and it makes divergence a likely outcome in another case labor migration keeps the relative wage of unskilled workers in the rich country high enough to induce all migrants to take unskilled jobs and reduce the skilled to unskilled ratio in that country then migration is beneficial to the country which was first exporting labor

bouncing back from health shocks locus of control and labor supply abstract many studies have demonstrated a causal effect of ill health on labor supply in this study i explore the personality related heterogeneity measured by differences in control beliefs in the labor supply response to health shocks to identify such behavioral differences i follow the labor supply trajectories of 649 initially full time employed and healthy men who experience at some point in time an episode of ill health when compared with men who have positive control beliefs men with negative control beliefs are on average 100 more likely to drop out of the labor force a drop out unrelated to early retirement and work on average 12 less hours per week the year after the health shock these behavioral differences remain robust to alternative estimation samples and health shock definitions they are strongest for men from low socioeconomic backgrounds who do not have access to private health insurance or who experience high intensity shocks heterogeneous labor supply responses are also observed for conscientiousness and risk tolerance traits that have been linked with willingness to invest and treatment compliance an important conclusion from the findings is that a small set of non cognitive skills produces long term labor market benefits in the advent of adversity

differential economic opportunity transferability of skills and immigration to the united states and canada studies concerned with u s and canadian immigration after world war ii have been based on cross sectional data or on limited time series data and have stressed the importance of differential economic opportunity as a cause of migration in this study four vectors of variables are used to explain annual immigration to both the united states and canada 1962 1984 from a number of specific source countries economic opportunities transferability of skills level of economic development and political conditions and institutional controls that reflect the immigration policies of the two nations wage differentials several measures of skill transferability political conditions in source countries and the policy variables prove to be important determinants of u s and canadian immigration excerpt

the changing labor market position of canadian immigrants this paper uses pooled 1971 1981 and 1986 canadian census data to evaluate the extent to which 1 the earnings of canadian immigrants at the time of immigration fall short of the earnings of comparable canadian born individuals and 2 immigrants earnings grow more rapidly over time than those of the canadian born variations in the labour market assimilation of immigrants according to their gender and country of origin are also analysed the results suggest that recent immigrant cohorts have had more difficulty being assimilated into the canadian labour market than earlier ones an apparent consequence of recent changes in canadian immigration policy labour market discrimination against visible minorities and the prolonged recession of the early 1980s summary in fre excerpt

telework urban form energy consumption and greenhouse gas implications a primary motivation of telework policy is to reduce energy consumption and greenhouse gas emissions using a numerical simulation of the standard urban model we show telework causes sprawl calling into question the idea that telework decreases energy consumption overall effects depend on wage changes due to telework land use regulation such as height limits or greenbelts and the telework participation rate while energy consumption increases in some scenarios emissions may fall due to changes in the energy mix between gasoline and other sources jel r11 r28 c60

regression toward mediocrity in economic stature this paper provides estimates of the correlation in lifetime earnings between fathers and sons intergenerational data from the national longitudinal survey are used earlier studies conducted for the united states report elasticities of children s earnings with respect to parent s earnings of 0 2 or less suggesting extensive integenerational mobility these estimates however are biased downward by error contaminated measures of lifetime economic status estimates presented in this paper correct for the problem of measurement error and find the intergenerational correlation in income to be on the order of 0 4 this suggests considerably less intergenerational mobility than previously believed jel j62

are risk aversion and impatience related to cognitive ability is the way that people make risky choices or tradeoffs over time related to cognitive ability this paper investigates whether there is a link between cognitive ability risk aversion and impatience using a representative sample of the population and incentive compatible measures we conduct choice experiments measuring risk aversion and impatience over an annual time horizon for a randomly drawn sample of roughly 1 000 german adults subjects also take part in two different tests of cognitive ability which correspond to sub modules of one of the most widely used iq tests interviews are conducted in subjects own homes we find that lower cognitive ability is associated with greater risk aversion and more pronounced impatience these relationships are significant and robust to controlling for personal characteristics educational attainment income and measures of credit constraints we perform a series of additional robustness checks which help rule out other possible confounds

immigration from poor to wealthy countries experience of the united states the u s experience with immigration from poor countries is examined using the results of two projects carried out by the national bureau of economic research questions considered include what determines the supply of immigrants how such immigrants fare in the u s job market and how this immigration affects the prospects of native born workers annotation

intergenerational income mobility in the united states social scientists and policy analysts have long expressed concern about the extent of intergenerational income mobility in the united states but remarkably little empirical evidence is available the few existing estimates of the intergenerational correlation in income have been biased downward by measurement error unrepresentative samples or both new estimates based on intergenerational data from the panel study of income dynamics imply that the intergenerational correlation in long run income is at least 0 4 indicating dramatically less mobility than suggested by earlier research copyright 1992 by american economic association

unemployment in britain male unemployment in britain has risen from around 2 per cent in the 1950s to around 17 per cent in 1985 see figure 1 the figures are for male unemployment because there is no consistent series for women 1 even more remarkably unemployment has fallen in only three years out of the last twenty 1973 1978 and 1979 to account for this we need a model that explains both changes in the natural or non accelerating inflation rate of unemployment nairu and deviations from it we use a three equation supply side model centred on the labour market this has two main features the first concerns the determination of employment in the short run the labour demand function that we use cuts through the fruitless debate now raging especially in europe as to whether current unemployment is classical or keynesian according to the classical view employment is too high because real wages are too high according to the keynesian view real wages are not binding and unemployment is high because the product market does not clear with prices too high relative to nominal demand the whole debate is set in the framework of perfect competition yet in perfect competition prices are set by impersonal forces and it is not clear what could possibly stop prices clearing the market it is much more reasonable to think of prices as being set by imperfectly competitive firms existing prices being the best they can think of given the demand they face in this context firms demand for labour will depend on both the real product wage and the level of real aggregate demand this is the demand function we estimate and it conforms both to common sense and to the data however this does not imply that employment can be made to grow without limit by pumping up real demand for in the medium term when price surprises are eliminated our model determines three variables employment real wages and real demand on the basis of three equations an employment equation a price equation and a wage equation thus in the medium term there is a natural level of employment and corresponding to this a natural level of real aggregate demand the second key feature of our model concerns the medium term determination of unemployment in the medium term the planned mark up of wages over prices in wage settlements must be consistent with the mark up of prices over wage costs in employers pricing behaviour for if wage setters try to set real product wages higher than is consistent with employers pricing behaviour this generates ever increasing inflation thus the key to understanding unemployment in the medium term is the behaviour of wage setters if events occur that push them towards too high real wages then unemployment has to rise to offset these influences we shall call these influences wage pressure variables or push factors and they are clearly crucial in understanding unemployment the variables here include the social security system employment protection

hyteresis in import prices the beachhead effect this paper shows that temporary real exchange rate fluctuations can have persistent hysteretic effects on trade specifically when market entry costs are sunk sufficiently large exchange rate shocks alter domestic market structure and thereby induce hysteresis this simple result has strong implications for exchange rate theory t rade policy and estimation of trade equations empirical evidence su ggests that the recent dollar overvaluation induced hysteresis in u s import prices namely the aggregate pass through equation of exchange rates to import prices shifted in the 1980s the shift s nature and timing is broadly consistent with the hysteresis hypothesis copyright 1988 by american economic association

hysteresis and the earnings function hysteresis in wages is modelled and a tractable earnings function is derived estimation using a recent cross section of uk data provides support for this function which also outperforms rival specifications on the basis of goodness of fit

evidence for countercyclical risk aversion an experiment with financial professionals countercyclical risk aversion can explain major puzzles such as the high volatility of asset prices evidence for its existence is however scarce because of the host of factors that simultaneously change during financial cycles we circumvent these problems by priming financial professionals with either a boom or a bust scenario subjects primed with a financial bust were substantially more fearful and risk averse than those primed with a boom suggesting that fear may play an important role in countercyclical risk aversion the mechanism described here is relevant for theory and may explain self reinforcing processes that amplify market dynamics jel e32 e44 g01 g11 g12

the incidence and wage consequences of home based work in the united states 1980 2000 abstract this study documents the rapid growth in home based wage and salary employment and the sharp decline in the home based wage penalty in the united states between 1980 and 2000 these twin patterns observed for both men and women in most occupation groups suggest that employer costs of providing home based work arrangements have decreased consistent with information technology it advances being an important source of these falling costs i find that occupation gender cells that had larger increases in on the job it use also experienced larger increases in the home based employment share and larger declines in the home based wage penalty

another look on earnings functions abstract in this paper we examine three different specifications of earnings functions based on human capital thurow s version of a segmented labor market and assignment theory using french data and considering education as an endogeneous variable contrary to hartog 1985 the human capital and assignment approaches are rejected in favor of the thurow s version of a segmented labor market

shocks individual risk attitude and vulnerability to poverty among rural households in thailand and vietnam summary we examine whether the experience of shocks influences individual risk attitude we measure the risk attitude of more than 4 000 households in thailand and vietnam via a simple survey item the experience of adverse shocks which is typical for poor and vulnerable households is related to a higher degree of risk aversion even when controlled for a large set of socio demographic variables therefore shocks perpetuate vulnerability to poverty via their effect on risk attitude we extend this general finding to various categories of shocks and find differences between thailand and vietnam this suggests that risk coping strategies profit from case specific design

the intergenerational transmission of risk and trust attitudes recent theories endogenize the attitude endowments of individuals assuming that they are shaped by the attitudes of parents and other role models this paper tests empirically for the relevance of three aspects of the attitude transmission process highlighted in this theoretical literature 1 transmission of attitudes from parents to children 2 an impact of prevailing attitudes in the local environment on child attitudes and 3 positive assortative mating of parents which enhances the ability of a parent to pass on his or her attitudes to the child we focus on two fundamentally important attitudes willingness to take risks and willingness to trust others we find empirical support for all three aspects providing an empirical underpinning for the literature an investigation of underlying mechanisms shows that socialization is important in the transmission process various parental characteristics and aspects of family structure are found to strengthen the socialization process with implications for modeling the socialization production function and for policies focused on affecting children s non cognitive skills the paper also provides evidence that the transmission of risk and trust attitudes affects a wide variety of child outcomes implying a potentially large total effect on children s economic situation

telecommuting traffic congestion and agglomeration a general equilibrium model abstract we develop a fully closed general equilibrium model of a monocentric city in which land is allocated to production housing and roads cbd workers and telecommuters are imperfectly substitutable in production cbd workers contribute to the cbd s agglomeration economies but cause traffic congestion in commuting telecommuters do not cause congestion and do not contribute to agglomeration the effects of telecommuting on the urban economy and land use pattern are studied the first best optimal policy in the presence of agglomeration economies congestion and telecommuting is derived and its impacts are compared with the effects of different second best policies

empirical age earnings profiles the human capital earnings function in which earnings are expressed as a quadratic in potential experience is probably the most widely accepted empirical specification in economics in spite of its widespread acceptance the human capital earnings function provides a very poor approximation of the true empirical relationship between earnings and experience the standard formulation understates early career earnings growth by about 30 50 and overstates midcareer growth by 20 50 however simple alternative specifications that fit the data are available

assimilation changes in cohort quality and the earnings of immigrants this paper reexamines the empirical basis for two facts that seem to be found in most cross section studies of immigrant earnings 1 the earnings of immigrants grow rapidly as they assimilate into the united states and 2 this rapid growth leads to many immigrants overtaking the earnings of the natives within 10 15 years after immigration using the 1970 and 1980 u s censuses this paper studies the earnings growth experienced by specific immigrant cohorts during the period 1970 80 it is found that within cohort growth is significantly smaller than the growth predicted by cross section regressions for most immigrant groups this differential is consistent with the hypothesis that there has been a secular decline in the quality of immigrants admitted to the united states

the legacy of immigration labour market performance and education in the second generation previous research finds that the children of immigrants or the second generation earn at least as much as other native born but that there are persistent ethnic differences in the intergenerational transmission of education and wages we explain why these results are not incompatible and extend the empirical evidence in several directions using the canadian survey of labour and income dynamics first we estimate a model of wages earnings and hours worked using modern econometric techniques to corroborate earlier us results of complete integration by the second generation in the labour market we find that ethnic differences in labour market performance are significant but that these difference do not alter conclusions about the relative performance of the second generation second we find a source of superior labour market performance for the second generation in higher educational attainment which constitutes an important legacy of immigration that should not be ignored third we find that the de

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

immigrant and emigrant earnings a longitudinal study this paper analyzes the relationship between earnings and the extent of assimilation cohort quality change and return migration experienced by the foreign born population the study uses the longitudinal data available in the survey of natural and social scientists and engineers the analysis reveals that there was a sizable decline in the skills of this population over the last two decades in addition the study shows that return migration is more likely among immigrants who did not perform well in the u s labor market

the labor market skills of recent male immigrants evidence from the current population survey using data from special supplements to the current population survey cps the authors track the education and hourly earnings of recent male immigrants to the united states in terms of these measures of labor market skills the cps data suggest that immigrants who came in the late 1980s were more skilled than those who arrived earlier in the decade this pattern represents a break from the steady decline in immigrant skill levels observed in 1940 80 census data despite the encouraging trend over the 1980s however the average skills of recent immigrants remain low by historical standards

immigrants in the american labor market quality assimilation and distributional effects this paper provides evidence on immigrants performance and impact in the u s labor market we document that new immigrants do bring fewer marketable skills to the united states than did earlier cohorts and that changes in the source countries of recent immigrants account for all of this decline in immigrant quality we find no important evidence that quality has declined within immigrant ethnic groups we also show that immigrants assimilate rapidly in the u s market 10 years of u s experience offsets most of the earnings disadvantage of new immigrants and that assimilation is more rapid for groups who start with lower initial wages excerpt

earnings convergence does it matter where immigrants come from or why recent immigrants to the us are starting their economic lives at substantially lower earnings than previous cohorts of immigrants this decline attributed to high family admissions and changes in the country of origin composition of us immigrants has fostered concerns about the quality of recent immigrants and motivated changes in us immigration law as well as calls for further change the importance of these concerns depends upon whether immigrants starting with low earnings remain at a disadvantage throughout their working lives this paper summarizes the research concerning the relationship between immigrant entry earnings and earnings growth and the effect on immigrant earnings growth of kinship admission and country of origin for cohorts from the same country of origin education group and age group the authors find strong evidence of a systematic inverse relationship between initial earnings and subsequent earnings growth with regard to the effect of greater admissions on the basis kinship the authors find that declines in admissions on the basis of occupational skills and corresponding increases in admissions on the basis of family are associated with both a decrease in initial earnings and an increase in earnings growth finally they find that the importance of country of origin as a determinant of immigrant earnings diminishes with time in the us the earnings of demographically comparable immigrants regardless of origin converge with time in the us authors

labor market discrimination against hispanic and black men h ispanic american men have lower average wage rates than white non hispanics in 1975 the average white non hispanic male wage earner in the united states earned 5 97 an hour mexican men earned 4 31 72 as much as white non hispanics puerto rican men earned 4 52 76 as much and cuban men earned 5 33 89 as much as white non hispanics by way of comparison black men s average wages in 1975 were 4 65 78 of the white male wage several possible reasons for the hispanics lower wages come to mind among them are age and education geographic location immigration language difficulties and discrimination for example as shown in table 1 mexicans and puerto ricans are younger on average than the white non hispanic population and earnings tend to rise with age hispanics have lower average levels of education than white non hispanics and wages are positively associated with education many mexican americans live in the southwest where prices are relatively low moreover hispanics are more likely to be recent immigrants and to lack fluency in english than white non hispanics and so to be at a disadvantage in the labor market in addition there is a widespread belief that hispanics suffer from employment discrimination and cannot obtain the wages that their human capital would command if they were non hispanic whites how much of the wage differentials described above are due to each of these factors and to other inter group differences in wage related characteristics in particular how much impact does labor market discrimination have on the average hispanic man s wage and how does this compare with discrimination against blacks this paper provides answers to these questions a few other efforts have been made to analyze the relative earnings of hispanic and white nonhispanic men using 1960 and 1970 census data fogel 1966 poston and alvirez 1973 poston alvirez and tienda 1976 long 1977 and gwartney and long 1978 we use more recent data from the 1976 survey of income and education this data set enables us to measure wage rates more accurately and to specify the wage function more completely than does the census unlike previous analysts in estimating the wage function we take account of possible selectivity bias due to the distinction between average wage offers and average observed wages thus we hope to obtain a more accurate and up to date measure of labor market discrimination against hispanic men section ii explains the method used to separate the minority white non hispanic wage differential into the portions due to differences in average characteristics and the portion due to differences in unobserved factors and discrimination taking into account the possibility of selectivity bias in the observed wage sample section iii describes the data used in the study and the specification of the wage equation the breakdown of the observed wage differentials into components due to differences in participation in the wage and salary sector local price levels average characteristics and discrimination are presented in section iv section v summarizes our findings and discusses their implications for efforts to improve the economic situation of hispanics in the united states

immigrant earnings relative to what the importance of earnings function specification and comparison points immigrant relative earnings estimates are sensitive to the choice of comparison point and the specification of earnings non sample mean comparisons borjas 1985 understate relative earnings simple earnings specifications linear education quadratic experience overstate relative earnings for both poorly and well educated immigrants specifications which ignore omitted variables understate the relative earnings of poorly educated immigrants and overstate those of well educated ones although measures of assimilation and changes in immigrant quality are insensitive to earnings specification they indicate strong earnings growth for post 1964 immigrants an overall decrease in immigrant quality and an increase in mexican immigrant quality

an empirical analysis of risk aversion and income growth risk aversion enters many theoretical models of human capital investment but attitudes toward risk have not been incorporated in empirical models of human capital investment this article develops a model of the joint investment in financial wealth and human wealth to show that human capital investment is an inverse function of the degree of relative risk aversion using data from the survey of consumer finances i find that wage growth is positively correlated with preferences for risk taking more educated individuals are also more likely to be risk takers thus risk taking explains a portion of the returns to education

immigrants in the u s labor market 1940 80 this paper explores the extent and causes of the decline in immigrant skills in the united states during the postwar period prior to 1965 immigration to the united states was guided by the national origins quota system this visa allocation system awarded visas to countries based on the representation of the national origin group in the u s population as of 1920 the 1965 amendments abolished the national origins formula thus redistributing visas across source countries and established a system where visas are mainly given to relatives of u s citizens or residents the empirical analysis shows that a single factor the changing national origin mix of the immigrant flow is mainly responsible for the decline in immigrant skills excerpt

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

the earnings of mexican immigrants in the united states abstract this paper documents the trends in the earnings of mexican immigrants during the 1970 1990 period the empirical evidence indicates that there has been a decline in the relative wage of successive mexican immigrant waves in the past three decades and that little wage convergence occurs between the typical mexican immigrant and the typical native worker the data also suggest that the increasing importance of mexican immigration is partly responsible for the deterioration in relative skills observed in the aggregate immigrant population but that there has also been a decline in relative skills even among non mexican immigrants

partition migration and jute cultivation in india abstract we show that refugees can play positive roles in receiving economies by looking at the partition of india we use an instrumental variables strategy to show that migrants played a major part in india s take up of jute cultivation our estimates suggest that migrants fully explain post partition jute cultivation consistent with migrants bringing jute specific skills with them we find that migrants did not depress jute yields did not increase the cultivation of other crops and did not lower native wages our results are robust to migrant selection into districts with the best markets for jute

the general equilibrium effects of the residential property tax incidence and excess burden abstract an urban general equilibrium model is used to explore the efficiency effects and distributional consequences of the residential property tax in a model of a small open city the replacement of a nondistortionary land tax with the residential property tax reduces the land area density and population of the city the aggregate net return on land falls by an amount equal to 164 93 of total tax revenue in a model of a closed region when city q replaces the land tax with the residential property tax production and employment shift to other cities in the region the net return on land decreases in city q and increases in other cities in the region in aggregate landowners are made better off by the change in tax policy while residents are made worse off the excess burden of the property tax is computed as 6 5197 of tax revenue

job search and immigrant assimilation an earnings frontier approach this study examines labor market assimilation by measuring the information utilized by immigrants during job search assimilation is assumed to occur whenever such information increases with length of residence in the united states and repeated job searches the authors assert that information utilized during job search reduces differentials between actual and potential maximum attainable earnings coauthors are henry w herzog jr richard a hofler and alan m schlottmann copyright 1992 by mit press

the energy implications of city size and density abstract this paper develops a new open city urban simulation model capable of showing the urban form and energy consumption effects of variation in city size the model is able to consider city size differences caused by wage and amenity differentials both with and without housing and land use regulation the surprising conclusion is that per capita energy use is relatively invariant to city size when growth is driven by wages but falls modestly with growth induced by rising amenity common land use policies specifically density limits and greenbelts can positively or negatively affect both city welfare and energy use

immigration and wages evidence from the 1980s this paper presents new evidence on the effects of immigration based on changes in the distributions of wages in 24 major u s cities during the 1980s we concentrate on measuring the effects of immigration at the lower tail of the wage distribution in particular we ask whether recent declines in the real earnings of the least skilled workers in the u s economy are related to immigration our empirical analysis reveals large differences across cities in the relative growth rates of wages for low and high paid workers nevertheless these differences bear little or no relation to the size of immigrant inflows excerpt

immigrant worker assimilation is it a labor market phenomenon the work in this paper contributes to the debate on the economic assimilation of immigrant workers in the u s labor market a model of simultaneous occupational choice and earnings is estimated for foreign born hispanic men foreign born east asian men and for native white men to test the general hypotheses of assimilation an important distinction is made between those who migrated as adults and those who migrated as children the results suggest that the appearance of assimilation may be the outcome of pre labor market experiences of individuals who migrate as children along with changes in u s immigration law that have relaxed skill criteria for entering immigrants

estimating risk preferences from deductible choice we develop a structural econometric model to estimate risk preferences from data on deductible choices in auto insurance contracts we account for adverse selection by modeling unobserved heterogeneity in both risk claim rate and risk aversion we find large and skewed heterogeneity in risk attitudes in addition women are more risk averse than men risk aversion exhibits a u shape with respect to age and proxies for income and wealth are positively associated with absolute risk aversion finally unobserved heterogeneity in risk aversion is greater than that of risk and as we illustrate has important implications for insurance pricing

pareto improving immigration in an economy with equilibrium unemployment economists from around the industrialized world demonstrate the strength of both theories about the rise of economic inequality that is it the mechanical consequence of changes in such economic fundamentals as technology and demographic parameters and that it is the contingent consequence country specific and time specific changes in institutions they find that though institutions always play a crucial role in shaping inequality and sometimes preventing it still it creeps in

hysteresis and the earnings of immigrants in the united states labour market the paper analyses the role of hysteresis in explaining the slow wage convergence between certain immigrant groups and native workers using the 1990 integrated public use microdata samples ipums the analysis reveals that past earnings history in the country of origin has a relatively smaller effect on post migration earnings when compared to past earnings history in the us in addition the paper suggests that the earnings history in the country of origin is more productive in the us labour market for immigrants from advanced economies as compared to those from less developed countries in particular we find that us labour market does not value the past earnings history of mexican immigrants as high as that of other ethnic groups with similar socioeconomic characteristics across successive cohorts

why do tougher caseworkers increase employment the role of programme assignment as a causal mechanism abstract previous research found that less accommodating caseworkers are more successful in placing unemployed workers into employment this paper explores the causal mechanisms behind this result using semi parametric mediation analysis analyzing rich linked job seeker caseworker data for switzerland we find that the positive employment effects of less accommodating caseworkers are not driven by a particularly effective mix of labor market programs but rather by other dimensions of the counseling process possibly including threats of sanctions and pressure to accept jobs

why do mexican americans earn low wages using current population survey data from november 1979 and 1989 i find that mexican americans earn low wages primarily because they possess less human capital than other workers not because they

estimation of optimal human capital accumulation parameters for the netherlands abstract using the theory of optimal investments in human capital in general and rosen s 1975 1976 version of it in particular we tried to model and explain aggregate life cycle income profiles for the netherlands in 1965 1972 and 1979 the model allowed us to estimate and impute human capital accumulation parameters and paths changes in rates of return depreciation rates the value of the human capital stock and of lifetime human wealth could be identified and compared for the sample years it was found that in terms of some of these parameters public sector employees gained compared with private sector employees and employees with higher vocational training gained ground over university trained employees

direct evidence of risk aversion as a source of advantageous selection in health insurance abstract using the self stated degree of risk aversion regarding health from the gsoep we find some evidence for risk aversion being a source of advantageous selection risk averse men more often procure supplementary insurance for hospital visits despite needing the additional coverage less

canadian immigration policy the effectiveness of the point system and other instruments this paper examines the effects of changes in canadian immigration policy on the occupational composition of immigration we focus on 1967 changes that created a regulatory system including the point system that still forms the framework of canadian immigration policy we find that the point system provides some control over occupational composition but that its effectiveness in fine tuning is limited by the large number of other characteristics it seeks to control we also find that entry class and source country composition of inflow have impacts that have swamped the effects of the point system in the last two decades summary in fre

undocumented mexico u s migration and the returns to households in rural mexico this paper presents estimates of net income gains to a sample of households in rural mexico from sending migrants illegally to the united states correcting for sample selectivity bias and it examines the role of expected income gains in driving illegal mexico u s migration there is no evidence that people who migrate illegally to the united states are above average contributors to household income either as workers in mexico or as mexico u s migrants however other things being equal villagers who are in the best position to contribute to household income as workers in mexico are positively selected not to migrate to the united states

on the wage growth of immigrants israel 1990 2000 this paper develops a descriptive methodology for the analysis of wage growth of immigrants that is based on human capital theory the sources of the wage growth are 1 the rise of the return to imported human capital 2 the impact of accumulated experience in the host country and 3 the mobility up the occupational ladder in the host country the model implies a nonlinear wage function that includes interactions between imported skills and local wage growth using data on native israelis and immigrants from the former soviet union of israel we estimate wage equations jointly for the two groups we find that upon arrival immigrants receive non return for imported skills in the ten years following arrival wages of highly skilled immigrants grow at 8 percent a year rising prices of skills occupational transitions accumulated experience in israel and an economy wide rise in wages account for 3 4 1 1 1 5 and 1 5 percent each in the long run the return for schooling converges to 0 027 substantially below the 0 069 return for natives we do not reject the hypothesis that the return for experience converges to that of natives and that immigrants receive a higher return for their unmeasured skills we find that there is some downgrading in the occupational distribution of immigrants relative to that of natives moreover the average wages of immigrants approach but do not converge to the wages of comparable natives the main reason for this is the low return to their imported skills jel j24 j31 j60