Knowledge that Transforms

In this paper, we assess the likely contribution of immigration over the past three and a half decades to poverty in the U.S. We first document trends in poverty rates among the native-born by race and ethnicity and poverty trends among all immigrants, recent immigrants, and immigrants by their region and (in some instances) country of origin. Next, we assess how poverty rates among immigrants change with time in the United States. Finally, we simulate the effects of competition with immigrant labor on native wages and the likely consequent effects on native poverty rates. We find that international immigration to the U.S. between 1970 and 2005 has increased the overall poverty rate due to the facts that immigrants are more likely to be poor and that an increasing proportion of the U.S. resident population that is foreign born. This effect, however, is modest (it increases U.S. poverty rates by half a percentage point) and transitory, as immigrant poverty rates decline quickly with time in the U.S. Our wage simulations indicate that competition with immigrants does adversely impact those natives, and only those natives, with the least education. However, the impact of wage competition with immigrants on native poverty rates is negligible.

We study ex post efficient policy responses to a run on the banking system and the ex ante incentives these responses create. We show that the efficient response to a run is typically not to freeze all remaining deposits, since doing so imposes heavy costs on some individuals. Instead, once a run is underway, (benevolent) government institutions would allow additional deposit withdrawals, placing further strain on the banking system. When depositors anticipate these extra withdrawals, their incentive to participate in the run increases. In fact, ex post efficient interventions can generate the conditions necessary for a self-fulfilling run to occur. (JEL G21, G8)

The use of microeconomic data has become extremely widespread in applied economics. Household and firm level data are now routinely used not only in labour and industrial organization, but also in macroeconomics. The use that is made of the data is extremely varied, ranging from simple comparison of means in the evaluation literature based on Randomized Control Trials, to the matching of some data moments to calibrate the structural parameters of complex models of individual behaviour to the structural estimation of dynamic optimization models. At the same time, partly as consequences of technology advances, many more data sets are available. And much more detailed and high quality data are being collected. From a methodological point of view, important advances have been made in the techniques aimed at the elicitation in surveys of information about a variety of factors that constitute important inputs in the empirical analysis of economic behaviour. A good example, for instance, is the collection of information on household financial and non financial wealth, which was thought to be a very difficult if not impossible variable to measure accurately in a household survey and, instead, is now collected routinely and satisfactorily in many surveys, thanks to the development and standardization of new

We examine the effect of early-life rainfall on the health, education, and socioeconomic outcomes of Indonesian adults. We link historical rainfall for each individual's birth year and birth location with adult outcomes from the 2000 Indonesia Family Life Survey (IFLS). Higher early-life rainfall has large positive effects on the adult outcomes of women, but not of men. Women with 20 percent higher rainfall (relative to the local norm) are 0.57 centimeters taller, complete 0.22 more schooling grades, and live in households scoring 0.12 standard deviations higher on an asset index. Schooling attainment appears to mediate the impact on adult women's socioeconomic status. (JEL I12, I21, J16, O15)

Rich people, women, and healthy people live much longer than their poor, male, and sick counterparts. Two extremes, taken from our analysis of single people in the Assets and Health Dynamics of the Oldest Old (AHEAD) dataset, illustrate this point: an unhealthy 70-year-old male at the twentieth percentile of the permanent income distribution expects to live only 6 more years, that is, to age 76. In contrast, a healthy 70-year-old woman at the eightieth percentile of the permanent income distribution expects to live 16 more years, thus making it to age 86.] Such significant differences in life expectancy could, all else equal, lead to significant differ ences in saving behavior. A related observation is that people with high permanent incomes keep large amounts of assets until very late in life. Table 1, also based on the

This paper shows that the price of a painting sold at an art auction and the experts' pre-sale valuations are anchored on the price at which the painting previously sold at auction. We are able to separate anchoring from rational learning by using the identifying strategy that the unobservable component of quality for a particular painting remains constant between the last auction sale and the current auction sale. We interpret these results as anchoring on the part of the buyers, with the sellers and auctioneers either anticipating anchoring on the part of the buyers or exhibiting anchoring effects themselves. (JEL D44, Z11)

This paper studies the second-moment properties of offshoring, the arrangement whereby firms carry out particular stages of production abroad. It documents a new empirical regularity: maquiladora industries in Mexico that are associated with US offshoring experience fluctuations in employment that are twice as volatile as the corresponding industries in the United States. This finding is not attributable simply to higher volatility in the overall Mexican economy, nor to the smaller size of Mexico's industries compared to US counterparts. (JEL F14, F23, L24, L25, L60, O14)

Yet research that examines the poverty reduction and labor supply effects of disability programs has taken place exclu-sively in developed countries with relatively low unemployment and high labor force participa-tion rates. In developing countries with high unemployment rates, the disincentive effect of cash transfers on labor supply has often been assumed to be economically insignificant (Anne Case and Angus Deaton 1998). In this paper, I provide initial evidence on, and draw attention to, the effect of the South Africa Disability Grant (DG) program on labor supply, in the context of a policy change in disability screening. I use a difference-in-differences estimator to assess the effect of a change toward a less intensive dis-ability screening on labor force nonparticipation for older individuals.If screening for disability benefit programs were perfect, the supply of disability benefits would be independent of labor supply decisions, and only those unable to work due to health con-ditions would receive benefits. However, the dis-ability screening process is imperfect because it is, in practice, difficult to determine whether a person is able to work, which is the typical test of eligibility for disability benefit programs. Recent evidence suggests that the work disincen -tive effects of disability benefits are expected to