Palestinian residents of the West Bank and Gaza Strip who work in Israel generally earn more than Palestinians employed locally, but this wage premium is highly volatile. Beginning with the 1987 Palestinian uprising, changes in wage differentials by work location parallel Palestinian absences from work in Israel. This article interprets changing location differentials in response to exogenous shocks as movements along an Israeli demand curve for migrant workers. Estimates of a model of the West Bank and Gaza Strip labor market are used to evaluate the effect of policies governing Palestinian access to the Israeli labor market.

Within diversified firms, the negative impact of leverage on investment is significantly greater for high q than for low q segments and significantly greater for non-core than for core segments. This differs substantially from focused firms and is consistent with the view that diversified firms allocate a disproportionate share of their debt service burden to their higher q and non-core segments. We also find that, among low-growth firms, the positive relation between leverage and firm value is significantly weaker in diversified firms than in focused firms. We conclude that the disciplinary benefits of debt are partially offset by the additional managerial discretion in allocating debt service that is provided by the diversified organizational structure.

This study uses Treasury bond triplets, which consist of three different Treasury issues with a common maturity date, to investigate the theoretical and empirical influence of tax strategies on Treasury prices. The tax-option effect, which arises from the right to optimally realize gains and losses for tax purposes, is found to induce convexity in the relation among triplet bond prices, but the effect is too small to create an arbitrage opportunity. A previous study [Litzenberger and Rolfo (1984)] is shown to incorrectly isolate the tax-option effect and hence misstate some key result; a correction is provided.

D. D. Hester, Aspects of Monetary and Banking Theory and Moral Hazard: Discussion, The Journal of Finance, Vol. 37, No. 2, Papers and Proceedings of the Fortieth Annual Meeting of the American Finance Association, Washington, D.C., December 28-30, 1981 (May, 1982), pp. 395-397