Economic historians have long been interested in the determinants of firm replacement policy under conditions of rapid technological development. This paper develops two models of replacement behavior--one with neutral and one with labor-saving technical change--under conditions of embodiment. Expressions for the optimal life of capital equipment are derived assuming environmental conditions consistent with the British and American textile sectors from the 1820s to the 1850s. The paper explores the influence of technical progress parameters, wages, interest rates, capital goods prices and output prices on the replacement decision. The paper concludes that tariff policy has had a significant impact on replacement and, further, that it helps shed considerable light on the divergent experience of these economies with the growth of industrial productivity.

I. Introduction, 138. — II. A general equilibrium model of the growing low-income economy, 139. — III. The sources of growth paradox, 141. — IV. An analysis of the sources of growth paradox, 144. — V. Conclusion, 147.

The striking difference between the results reached by Charles Link, using published 1970 Census data, and ours, using the 1967 SEO tape, calls for some explanation. In an effort to find the source of the difference, this comment reports our results using the 1970 Census (1969 income and earnings) individual data from the public use tapes. We shall show that the source of the discrepancies lies with the form of the published Census data rather than in underlying economic relationships. Using individual data, we show that the effect of education on earnings is similar for blacks and whites in 1969, a result which confirms our assertions from the 1966 SEO data. We suspect that similar results would be forthcoming from the 1959 Census data. It seems likely that the low apparent return to black education found bv Lester Thurow was also a statistical artifact. At the very least, we conclude that the use of grouped data for policy analysis of this sort is very suspect and that individual data should be used wherever possible. The published census data is beset with numerous flaws. First, it presents data on income rather than earnings from work or self-employment. Income includes welfare transfers, unemployment insurance, and the like. As a result, the effect of education on income is apt to be weak at low levels of education compared with its effect on earnings. Second, the published data excludes persons with zero income. Since these include the unemployed, their exclusion tends to weaken the education-earnings relationship still further. Third, the published data include all males in the armed forces and in institutions (for example, jail). The education-earnings relationship may be biased downwards even further since income in kind is an enormous component of military pay. Each of these flaws in the published data apply to whites as well as blacks, but the distortion is likely to be more severe for blacks since they have higher dependence on transfers, higher unemployment rates, and higher participation in the armed forces. In addition, the published Census data consist of median incomes for age-education groups, and three problems arise as a result. First, the census groups are quite broad. For example, median incomes are reported for those with 1-4 vears of education, 5-7 years of education, etc., and for ages 18-19, 25-29, . . , 36-44, etc. In contrast, the 1967 SEO tape and the 1970 Census public use tapes permit us to use precise age and education data. Second, the Thurow and Link studies gave each age-education cell equal weight, while our study is based on individual data effectively weighted by the number of individuals in a given cell. Third, the published cell medians do not reflect outliers very well, but they are included in our study. Obviously, a grouped data regression will always yield a higher R2. Bevond that, it is not clear what a priori bias is introduced by grouping. In an attempt to evaluate the effect of these differences we grouped the public use tape data following the census procedures, but utilizing alternative measures of income and alternative sample definitions. These results were then compared with those derived from individual data upon which the grouping was based. The results of these experiments appear in Table 1 for those in the North, Table 2 for those in the South, and Table 3 for the nation as a whole. * The University of Wisconsin, Madison. We gratefully acknowledge the superb research assistance of Nancy Williamson. The research was supported by funds granted to the Institute for Research on Poverty at the University of Wisconsin by the Office of Economic Opportunity. The conclusions are the sole responsibility of the authors.

The late nineteenth century saw international mass migrations of capital and labor from the Old World to the New. Factors chased each other and the abundant resources at the frontier. Demographic structure also contributed to the massive capital flows from Britain to the New World. The dependency hypothesis is confirmed by estimation of savings functions in three New World economies (Argentina, Australia, and Canada) in which high dependency rates may have significantly depressed domestic savings rates and pulled in foreign investment: in effect an intergenerational transfer from old savers in the Old World to young savers in the New.

Introduction, 426. — I. The structure of the dual economy, 427. — II. Labor force growth and biased technological progress: comparative statics, 432. — III. Labor force growth and biased technological progress: dynamics, 435. — IV. A numerical experiment, 436. — V. Conclusion, 443. —Appendix A, 445. — Appendix B, 447.

The late nineteenth century saw international mass migrations of capital and labor from the Old World to the New. Factors chased each other and the abundant resources at the frontier. Demographic structure also contributed to the massive capital flows from Britain to the New World. The dependency hypothesis is confirmed by estimation of savings functions in three New World economies (Argentina, Australia, and Canada) in which high dependency rates may have significantly depressed domestic savings rates and pulled in foreign investment: in effect an intergenerational transfer from old savers in the Old World to young savers in the New.

In this paper we develop and estimate a model to explain variations in immigration to the United States by source country since the early 1970s. The explanatory variables include ratios to the United States of source country income and education as well as relative inequality. In addition, we incorporate the stock of previous immigrants and a variety of variables representing different dimensions of the immigration quotas set by policy. We use the results to shed light on the impact of policy by simulating the effects of the key changes in immigration policy since the late 1970s. We also examine the factors that influenced the composition of U.S. immigration by source region over the entire period.