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We propose a mechanism for labor-market polarization based on the nonhomotheticity of demand that we call the income-driven channel. Our mechanism builds on a novel empirical fact: expenditure elasticities and production intensities in low- and high-skill occupations are positively correlated...
Persistent link: https://www.econbiz.de/10013309532
With the signing of the North American Free Trade Agreement (NAFTA) in 1994, Mexico entered a bilateral free trade …
Persistent link: https://www.econbiz.de/10013140996
In this paper, I examine the impacts of trade and investment liberalization on the wage structure of Mexico. Part one … of the paper surveys recent literature on the labor-market consequences of Mexico's economic reforms in the 1980?s …. Mexico's policy reforms appear to have raised the demand for skill in the country, reduced rents in industries that prior to …
Persistent link: https://www.econbiz.de/10013246641
We generalize the classic concept of compensating variation and the welfare compensation principle to a general equilibrium environment with distortionary taxes. We show that the problem of designing a tax reform that compensates the welfare gains and losses induced by an economic disruption can...
Persistent link: https://www.econbiz.de/10012954448
One of the leading theories of entrepreneurship is that less risk averse individuals become entrepreneurs and more risk averse individuals become their employees. Kihlstrom and Laffont (1979) formalized this insight in an elegant and widely taught general equilibrium model. However, their model...
Persistent link: https://www.econbiz.de/10013025255
We estimate the general-equilibrium labor market effects of a large-scale randomized intervention in which we designed and marketed a rainfall index insurance product across three states in India. Marketing agricultural insurance to both cultivators and to agricultural wage laborers allows us to...
Persistent link: https://www.econbiz.de/10013060688
In the last quarter century, wage inequality has increased dramatically in the United States. At the same time, the US has become more integrated into the world economy prices of final goods have changed, the capital stock has more than doubled has become steadily more educated. This paper...
Persistent link: https://www.econbiz.de/10013218410
We assess long-term impacts of the Mexican conditional cash transfer (CCT) program on youth employment and earnings. We rely on the original random assignment into early and late treatment localities, which introduced CCTs in 1998 and 2000. We focus on children between 7 and 16 years of age in...
Persistent link: https://www.econbiz.de/10012929008
There has been little rigorous evaluation of immigration barriers intended to improve domestic terms of employment by shrinking the workforce. We study one such barrier, a policy change that excluded almost half a million Mexican bracero seasonal agricultural workers from the United States....
Persistent link: https://www.econbiz.de/10012963750
A controversial issue in the US is how to reduce the number of illegal immigrants and what effect this would have on the US economy. To answer this question we set up a two-country model with search in labor markets and featuring legal and illegal immigrants among the low skilled. We calibrate...
Persistent link: https://www.econbiz.de/10013058244