This paper addresses the question: Why and where do immigrants cluster? We examine the relative importance and interaction of two alternative explanations of immigrant clustering: (1) network externalities and (2) herd behavior. We advance the theory by presenting a framework encompassing both...

Empirical studies in the migration literature have shown that migration enclaves (networks) negatively affect the language proficiency of migrants. These studies, however, ignore the choice of location as a function of language skills. Using data on Mexican migration to the US, we show that...

Using data on border enforcement and macroeconomic indicators from the United States and Mexico, we estimate a two-country business cycle model of labor migration and remittances. The model matches the cyclical dynamics of unskilled migration and documents the insurance role of remittances in...

During the last few decades cultural changes have been taking place in many countries due to migration. The degree to which the foreign culture influences the local culture, differs across countries. This paper shows how the willingness of locals and immigrants to intermarry influences the...

Governments do not have perfect information regarding the priorities and the needs of different groups in the economy. This lack of knowledge opens the door for different groups to lobby the government in order to receive the government’s support. We set up a model of hierarchical contests and...

Previous study by Card and Lewis (2005) has found (puzzling) that inflows of Mexican immigrants into new metropolitan areas have had no effect on the relative wages of very low-skill (high school dropouts). Rather, Mexican workers do affect relative wages for high school graduates. Whereas Card...

Using Bulgarian Integrated Household Surveys for 1995, 1997 and 2001 this paper explores determinants of labor force status – not working, public sector employment, private sector employment and self-employment – and earnings for each of the three employment sectors. We find that while...

Labor supply theory predicts systematic heterogeneity in the impact of recent welfare reforms on earnings, transfers, and income. Yet most welfare reform research focuses on mean impacts. We investigate the importance of heterogeneity using random-assignment data from Connecticut's Jobs First...

In a seminal paper Gibbons and Katz (1991; GK) develop and empirically test an asymmetric information model of the labor market. The model predicts that wage losses following displacement should be larger for layouts than for plant closings, which was borne out by data from the Displaced Workers...

We investigate whether the costs of job displacement differ between blue collar and white collar workers. In the short run earnings and employment losses are substantial for both groups but stronger for white collar workes. In the long run, there are only weak effects for blue collar workers but...