In this paper, another aspect of optimizing behavior is considered. Specifically, it asks whether variations in levels of attained schooling across groups can be explained by a model that assumes that capital markets are perfect and that individuals maximize wealth. The logic of the analysis...

One of the economic benefits of immigration is that the diversity of the population is enhanced. Diversity, it is argued, enriches the environment in which individuals live and trade and may contribute to greater creativity. What does diversity mean? Do current immigration policies enhance...

What happens when a firm switches from paying hourly wages to paying piece rates? The theory developed below predicts that average productivity rises, that the firm will attract a more able work force and that the variance in output across individuals at the firm will rise as well. The theory is...