Natives are expected to respond to the wage impact of immigration by moving across markets. We argue that the observed impact depends not only on the size of the native response but also on which natives choose to respond. Specifically, a nonrandom response produces a selection bias. We document its empirical relevance by showing that the strong feminization of the French immigrant workforce reduced the employment of native women, leading to sizable compositional shifts and no correlation between immigration and female wages. Adjusting for selection bias results in a wage elasticity that becomes negative for women and similar to men.

We study the relationship among occupational employment, occupational wages, and wage inequality. In all occupations, entrants and leavers earn less than stayers, suggesting negative selection effects for growing occupations and positive effects for shrinking ones. We estimate a model of occupational prices and skills that includes specific skill accumulation and endogenous switching. Contrary to uncorrected wages, prices and employment growth are positively related. Forty percent of selection is due to age, as entrants and leavers have had less time to accumulate skills. The remainder is Roy-type selection. Skill prices establish a quantitative connection of occupational changes with surging wage inequality.

Children whose parents were self-employed before China’s socialist transformation were more likely to become self-employed after the economic reform, even though they had no direct exposure to their parents’ businesses. The effect is statistically significant only for sons. The lack of direct exposure to family businesses impedes the transfer of business human capital and motivates us to explore personality traits as the underlying mechanisms. We find that children with self-employed parents are also more likely to invest in risky assets and to consume cigarettes. This suggests that children of self-employed parents inherit personality traits that induce risky behaviors.

We investigate whether selective intermarriage and endogenous ethnic identification interact to hide some of the intergenerational progress achieved by the Mexican-origin population in the United States. In part, we do this by comparing an “objective” indicator of Mexican descent (based on the countries of birth of the respondent and his parents and grandparents) with the standard “subjective” measure of Mexican self-identification (based on the respondent’s answer to the Hispanic-origin question). For third-generation Mexican American youth, we show that ethnic attrition is substantial and could produce significant downward bias in standard measures of attainment that rely on ethnic self-identification.

In the Netherlands, the average exit rate out of welfare is dramatically low. Most welfare recipients have to comply with guidelines on job search effort that are imposed by the welfare agency. If they do not, then a sanction in the form of a temporary benefit reduction can be imposed. This article investigates the effect of such sanctions on the transition rate from welfare to work using a unique set of rich register data on welfare recipients. We find that the imposition of sanctions substantially increases the individual transition rate from welfare to work.

This article uses a hazards model permitting continuous covariates and fixed effects to estimate the effect of local employment opportunity and family background on the cohabitation and childbearing of black youths from low-income households. Support is found for W. J. Wilson's hypothesis that employment opportunity encourages the formation of cohabitational unions, as well as for the "opportunity-cost" hypothesis that employment opportunity discourages childbearing outside such unions. However, the latter effect appears to be larger, suggesting that the opportunity-cost hypothesis is the primary channel through which higher employment rates result in lower rates of illegitimacy among underclass youths.

We report the results of a field experiment in which treated employers could not observe the compensation history of their job applicants. Treated employers responded by evaluating more applicants and evaluating those applicants more intensively. They also responded by changing what kind of workers they evaluated: treated employers evaluated workers with 5% lower past average wages and hired workers with 13% lower past average wages. Conditional on bargaining, workers hired by treated employers struck better wage bargains for themselves.

Much evidence suggests that having more education leads to higher earnings in the labor market. However, there is little evidence about whether having more education causes employees to experience lower earnings volatility or shelters them from the adverse effects of recessions. We use a large British administrative panel data set to study the impact of the 1972 increase in compulsory schooling on earnings volatility over the life cycle. Our estimates suggest that men exposed to the law change subsequently had lower earnings variability and less procyclical earnings. However, there is little evidence that education affects earnings volatility of older men.

Knowledge producers conducting research on a particular set of questions may respond to supply and demand shocks by shifting resources to a different set of questions. Cognitive mobility measures the transition from one location to another in idea space. We examine the cognitive mobility flows unleashed by the influx of Soviet mathematicians into the United States after the collapse of the Soviet Union. The data reveal that American mathematicians moved away from fields that received large numbers of Soviet émigrés. Diminishing returns in specific research areas, rather than beneficial human capital spillovers, dominated the cognitive mobility decisions of knowledge producers.

We consider why the gender division of labor is so often enforced by custom and why customary gender divisions of labor generally involve both direction and prohibition. In our formal model, agents first learn skills and then enter the marriage market. We show that wasteful behavior may emerge due to strategic incentives in specialization choice and human capital acquisition and that both problems may be mitigated through a customary gender division of labor. This division is not Pareto improving. Both the distributional effects and welfare gains of a customary gender division of labor decrease as opportunities for market exchange increase.