Knowledge that Transforms

Because many individuals do not complete their degrees in the standard number of years, previous estimates of diploma effects, which have been based only on an individual's years of education, are biased. Using a data set from a matched sample of the 1991 and 1992 March Current Population Survey that has information on both years of education and diplomas received, this paper improves on earlier estimates and finds that using 'true' information on degree receipt substantially increases estimated sheepskin effects of high school and college degrees. Unlike past research, this paper finds that there are few statistically significant differences in sheepskin effects between race and sex groups. The relative returns to Associates and post-graduate degrees are also examined.

In this paper, we test whether aggregate productivity movements, especially convergence, are also reflected at the industry level.Using a new result on the asymptotic normality of panel unit root estimators, we find evidence for convergence in total factor productivity for sectors such as services and construction in 14 OECD countries from 1970-1987.However, surprisingly, we find that convergence does not hold for the manufacturing sector.Convergence in total industry occurs as a result of the declining share of manufacturing and the growing share of sevices in these countries.

This is one of the first empirical studies of the relationship between a developing country's system of intellectual property protection and the volume and composition of U.S. foreign direct investment in that country. Based on data obtained from almost one hundred U.S. firms regarding their perceptions of how weak or strong such protection is in various countries, the authors' results are consistent with the view that a country's system of intellectual property protection influences the volume and composition of U.S. foreign direct investment.

This paper analyzes the return migration of foreign-born persons in the United States.We argue that return migration may have been planned as part of an optimal life cycle residential location sequence.Return migration also occurs because immigrants based their initial migration decision on erroneous information about opportunities in the United States.The study uses the 1980 Census and administrative data from the immigration and Naturalization Service.Immigrants tend to return to wealthy countries which are not too far from the United States.Moreover, return migration accentuates the type of selection characterizing the immigrant population left in the United States.

Wesley M. Cohen, Steven Klepper, Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D, The Review of Economics and Statistics, Vol. 78, No. 2 (May, 1996), pp. 232-243

The Central and East European (CEE) countries are in their sixth year of a dramatic transition from a centrally planned to a market-based system. In the first phase of the transition, most of these economies have achieved macroeconomic stabilization but also experienced a major decline in officially measured output and a slower but significant decline in employment. The attention has thus shifted to the ability of governments to check the rapid rise in unemployment, induce efficient behavior of firms, and improve the functioning of the infant markets. In particular, while a fundamental feature of the centrally planned economies was full employment, with state enterprises hoarding unproductive labor, a distinguishing feature of the transition has been the emergence of a double-digit unemployment rate, together with varying degrees of restructuring, privatization, and birth of firms. An understanding of these phenomena is essential for grasping the process of transition and formulating appropriate policies. In this paper, I provide a step in this direction by discussing some recent econometric evidence for CEE on (i) enterprise behavior (in the areas of restructuring and privatization, as well as employment and wage setting) and (ii) the flow of individuals from unemployment into employment.

This paper attempts to explain the correlation between money and output at various leads and lags with a model in which money is largely neutral and endogenously responds to output. Money is endogenous because both monetary policy and deposit creation are endogenous. Parameters are selected according to the simulated moments estimation technique. While the estimated model succeeds along some dimensions in matching properties of postwar U.S. data, its failure to match key patterns of lead-lag correlations seems to cast doubt on the ability of endogenous money determination, by itself, to quantitatively account for the observed money-output correlations.