There is a large body of evidence indicating that cross-country differences in income levels are associated with differences in productivity. If workers are much more productive in one country than in another, restrictions on immigration lead to large efficiency losses. The paper quantifies...

This paper studies the impact of income inequality on fiscal conservatism when an increase in inequality essentially affects the bottom of the income distribution. It is argued that, contrary to what is generally assumed in the economic literature, inequality will then be associated will less,...

This paper assesses the trade-off between acquiring specialized skills targeted for a particular occupation and acquiring a package of skills that diversifies risk across occupations. Individual-level data on college credits across subjects and labor market dynamics reveal that diversification...

This paper construct a two-sector model of two-period lived overlapping generations with endogenous occupational choice where ability-heterogeneous agents choose whether to become educated when young. We show that the steady-state equilibrium can be locally indeterminate even under linear...

A dynamic general equilibrium model is constructed to examine the impact of mass immigration on capital accumulation in life-cycle economies. The model is calibrated to match Canadian demographic characteristics over 1861-1913. This was a period when Canada experienced a dramatic shift in...

We study the effects of German unification in a model with capital accumulation, skill differences and a welfare state. We argue that this event is similar to a mass migration of low-skilled agents holding no capital into a foreign country. Absent a welfare state, we observe an investment boom,...

We present a dynamic model in which firms accumulate wealth to avoid bankruptcy and to overcome financing constraints that affect their fixed operational costs and the costs of becoming an exporter. Financing constraints not only affect firms directly when they are binding, but also indirectly,...

The international mobility of low-skilled workers is constrained by immigration restrictions set by rich countries, preventing extreme poverty from declining in the developing world. Under aversion to extreme poverty, one country's immigration policy affects the welfare of other countries:...

In a Bewley model with endogenous price volatility, home ownership and mobility across locations and jobs, we assess the contribution of financial constraints, housing illiquidities and house price risk to home ownership over the life cycle. The model can explain the rise in home ownership and...

This paper develops a dynamic structural model of migration decisions that is aggregated to describe the behavior of interregional migration. Our structural approach allows us to deal with dynamic self-selection problems that arise from the endogeneity of location choice and the persistence of...