From 1981 to 1991 the mean earnings of immigrants fell further behind those of natives in Hong Kong, with the earnings gap widening from 11.3% to 25.5%. Earnings divergence of this magnitude is rather unusual among countries that receive many immigrants. We show that earnings divergence in Hong...

In this paper a general equilibrium model is constructed to explain the emergence of firms and change in firm size by the tradeoff between economies of specialization and transaction cost. We show that firms emerge from the development of division of labor if the transaction efficiency for labor...

It is often believed that spouses’ wages are positively related even when other traits such as age and education are controlled. This is mainly based on the observation of two-earner couples. This paper uses the standard sample selection technique to correct for the sample censoring and to...

The paper provides some empirical evidence for the relationship between average firm size and the relative transaction efficiency and per capita income as hypothesized by Liu and Yang in Journal of Economic Behavior and Organization 42(2) (2000):145-65. The empirical data of 11 industries in...