Knowledge that Transforms

We examine whether and how variations in the price of recreation goods influence men’s allocation of market work. For the United States, individual‐level data are combined with metropolitan‐area‐level price indices to estimate the male elasticity of intertemporal substitution of market work with respect to the price of recreation goods, which is found around 0.16 and statistically significant. The allocation of market work in response to changes in the price of recreation goods would create movements in the output of an economy. Moreover, it could contribute toward explaining the emerging differences in work and leisure between the United States and Europe.

This article develops a model that examines the role of cultural conflict in immigration and immigration policy. Cultural differences lead to frictions between natives and immigrants unless the latter make a costly investment to assimilate. This article’s key contribution is the joint analysis of the assimilation and migration decisions, which highlights the inefficiency of some commonly advocated policy tools to achieve the first best. U.S. data provide preliminary support for the model’s implications.