Kusum Mundra

Social networks and their impact on the earnings of Mexican Migrants

We examine the impact of different types of social networks on the wages earned by unauthorized and legal Mexican migrants during their last U.S. trip. Familial ties raise unauthorized and legal migrants’ hourly wages by an average of 2.6% and 8%, respectively, and friendship ties increase their wages by 5.4% and 3.6%, correspondingly. Furthermore, family ties seem to comparatively favor legal migrants in terms of earnings, raising their wages by approximately 0.9% more than for similar unauthorized migrants. These results underscore the potentially important role of social networks in raising Mexican migrants’ earnings, particularly among unauthorized migrants. By increasing the returns to migration, social networks may provide a stimulus to continued emigration.

Immigration and International Trade: A Semiparametric Empirical Investigation

This paper examines the effect of immigration on the US trade flows. The model hypothesizes that immigration facilitates international trade with home countries by lowering transaction costs. Immigrants also demand products from their country of origin and thus stimulate trade. Using a panel data set we estimate a dynamic semiparametric fixed-effect model. The immigrant stock, a proxy for transaction costs, enters the model non-parametrically, whereas other variables enter the model log-linearly, as implied by the gravity model of international trade. To estimate this semiparametric model, we develop a new instrumental variable estimator with desirable asymptotic properties. The results indicate that the immigration effect on imports is positive for both finished and intermediate goods, but the effect on exports is positive only for finished goods. The findings supports the hypothesis that for finished goods where country specific information is crucial for trading, immigrants have a pro trade effect for both US imports and US exports. This pro trade effect of the information and knowledge carried by the immigrants is not observed for the US exports in the intermediate goods. Immigrants also have a strong demand effect both for the consumer and intermediate imports.

Suicide Bombing as a Strategic Weapon: An Empirical Investigation of Hamas and Islamic Jihad

Using twice-yearly data from 1991 to 2003, we analyze the incidents of suicide attacks by Hamas and Islamic Jihad within Israel and the Palestinian territories of the West Bank and the Gaza Strip. Given the exploratory nature of the question, we have first estimated the relevant coefficients by using a Quasi-Maximum Likelihood Ratio and then checked their robustness by reestimating the model with the help of a Seemingly Unrelated Regression (SUR) as an interrelated system. The results indicate that the two groups deliberately use suicide bombings as strategic weapons within the larger Israeli-Palestinian political milieu. With the Western world locked in an armed struggle with the militant extremists of Islam based on millenarian ideologies, this study emphasizes the need to develop appropriate analytical capabilities to distinguish among terrorist groups and their motivations, ideologies, and tactics. At times, Palestinian politics are dizzyingly incoherent,…at times bloody, at other times perfectly clear.—Edward W. Said

Immigrant Homeownership and Immigration Status: Evidence from Spain

Because of the many advantages of homeownership for immigrants and for the communities where immigrants reside, a variety of countries have implemented policies that facilitate immigrant homeownership. Although these policies hinge on immigration status, the link between immigration status and homeownership is yet to be carefully explored. Using a recent survey of immigrants in Spain, we find that permanent residents from the EU15 enjoy the highest homeownership rates, even after accounting for a wide range of individual and family characteristics known to impact housing ownership. Permanent residents from countries outside the EU15, temporary residents and undocumented immigrants are, respectively, 12 percentage-points, 29 percentage-points and 33 percentage-points less likely to own a home than permanent residents from the EU15. Overall, the findings highlight the differences in homeownership by immigrant status, possibly reflecting differences in cultural adaptation and integration across immigrants in host country.

Skyscraper Height and the Business Cycle: Separating Myth from Reality

This paper is the first to rigorously test how height and output co-move. Because builders can use their buildings for non-rational or non-pecuniary gains, it is widely believed that (a) the most severe forms of height competition occur near the business cycle peaks and (b) that extreme height are examples of developers “gone wild.�? We find virtually no support for either of these popularly held claims. First we look at both the announcement and completion dates for record breaking buildings and find there is very little correlation with the business cycle. Second, cointegration and Granger causality tests show that height and output are cointegrated and that height does not Granger cause output. These results are robust for the United States, Canada, China and Hong Kong.

Impact of Immigration on Prenatal Care Use and Birth Weight: Evidence from California in the 1990's

The mid-1990’s witnessed the passage of two legislative measures restricting noncitizens’ use of public services in response to the extensive and costly use of public assistance by immigrants reported by earlier studies (Jane L. Ross, 1996). First, the Immigration Control and Financial Responsibility Act restricted illegal immigrants’ access to medical services and to other forms of public assistance. In addition, the Personal Responsibility and Work Opportunity Reconciliation Act extended the restriction to legal immigrants entering the country after its enactment for at least five years after entry and effectively until they naturalize. However, some states with large immigrant populations, like California, chose to institute state-funded substitute benefits for immigrants losing federal assistance. In spite of these states’ assistance possibly working as an “immigrant magnet” (George J. Borjas, 2001), the literature emerging after welfare reform has often found a greater decline in the use of public assistance, particularly Medicaid, among noncitizen households relative to citizens. This finding has been attributed to the “chilling effects” of welfare reform (Wendy Zimmermann and Michael Fix, 1998). In light of these findings, should we now expect greater noncitizenship rates to ease access to public services or, rather, to impose a burden on access to public services? In this paper, we look into this question and examine the impact of noncitizenship rates on women’s use of prenatal care (PNC) over the period 1991–2000 in California. We focus on women’s PNC use given the health implications that PNC can have for both mother and infant, and yet the lack of studies examining the role of noncitizenship rates, even in high immigration areas, on women’s PNC use. We use 1991 and 2000 to assess significant changes in the effect of noncitizenship rates on women’s PNC use before and after the 1996 reform. Additionally, we focus on California due to its population size and its large immigrant population, of whom approximately 61 percent are noncitizens. Finally, given the implications of adequate PNC on newborns’ birth weight through the early detection and treatment of any existing health problems, we examine how PNC, in turn, has affected the birth weight of babies born in California over the examined time period. In sum, this study addresses the following questions: Has the effect of noncitizenship rates on women’s PNC use changed before and after the 1996 reform? In particular, do greater noncitizenship rates result in reduced PNC use due to increased competition for public services, or do they lead to increased PNC use due to welfare reform’s “chilling effect” and increased awareness of the importance of PNC? Furthermore, how does PNC use affect birth weight?

Determinants of Homeownership among Immigrants: Changes during the Great Recession and Beyond

In this paper, we explore factors correlated with immigrant homeownership before and after the Great Recession. We focus solely on immigrants because of recent evidence that suggests homeownership rates declined less for immigrants than natives in the United States during the recession and onward. Specifically, we examine to what extent an immigrants income, savings, length of stay in the destination country, citizenship status, and birthplace networks affected the probability of homeownership before the recession, and how these impacts on homeownership changed since the recession. We examine these questions using microdata for the years 2000–2012. Our results suggest that citizenship status, birthplace network, family size, savings, household income, and length of stay are significant for an immigrants homeownership. In comparing the pre‐recession period to the period afterward, we find that the impact of birthplace networks on homeownership probabilities doubled while the impact of savings slightly declined.

Immigration and Trade Creation for the United States: Role of Immigrant Occupation

Using a sample of 63 U.S. trading partners that constitute the major immigrant sending countries over the years 1991–2000 and using instrumental variable estimation this paper finds that the immigrant trade elasticity varies with the share of the immigrants in various occupation groups. The share of professional immigrants significantly increases the immigrant trade elasticity for all types of trade due to their ability to effectively use their network for trade creation. This effect is strongest for the Rauch’s differentiated imports where the immigrant specific home country information and immigrant demand for goods play a key role in increasing trade.

Direct and dual elasticities of substitution under non-homogenous technology and nonparametric distribution

Purpose - – This paper revisits the derivation and properties of the Allen-Uzawa and Morishima elasticities. Using a Swiss dataset, this paper empirically estimates various elasticities both in a dual and primal framework using a production theory open economy model and tests for linear homogenous technology. In addition to reporting elasticity at the mean, the standard practice in the literature, this paper also calculates nonparametric distribution of various elasticities. The paper aims to discuss these issues. Design/methodology/approach - – To assess the effect of price change on input, the paper estimates a translog cost function and to assess the effect of quantity change on price, the paper estimates the translog distance function using the data on Swiss economy. The paper estimates Allen-Uzawa and Morishima elasticity both under homogenous and non-homogenous technology using the Swiss dataset of one aggregate gross output and four inputs (resident labor, non-resident labor, imports, and capital) over 1950-1986. Elasticities are reported and compared at the mean as well as explored by looking at the range and nonparametric distribution. Findings - – This paper shows that constant returns to scale are easily rejected in this dataset and that the elasticities, both qualitatively and quantitatively, are very different under homogenous and non-homogenous technology. These elasticities can switch from complements to substitutes or vice versa when one moves away from the mean of the sample. The equality of the nonparametric elasticity distributions under homogenous vs non-homogenous technology is rejected in all cases except one. Originality/value - – This paper gives a clear derivation and interpretation of different elasticities as well as demonstrates using a dataset how to systematically go about empirically estimating these elasticities in a dual and primal framework. It shows that linear homogenous technology can be easily rejected and the elasticities, both quantitatively and qualitatively, are very different under homogenous and non-homogenous technology. This paper is also very valuable because it shows that the standard practice of reporting elasticity at the mean might not be adequate and there is a possibility that these elasticities can switch from complements to substitutes or vice versa when one moves away from the mean of the sample.

Is the downturn in maquiladora employment cyclical or structural

Purpose - The purpose of this paper is to examine the effect of cyclical and structural factors on the decline of maquiladora employment. In addition to the US industrial production, the cyclical factors examined are relative Mexican US wages, the Mexican exchange rate relative to the US, and US foreign direct investment (FDI). The paper also explores the effect of competition from China, a structural effect, on the decline of maquiladora employment. Design/methodology/approach - A vector error correction (VEC) model of maquila employment for the period 1980-2002 is estimated and controlled for US industrial production, FDI flows, relative wage rates of Mexico and USA. To empirically investigate the structural differences of lower costs in Mexico vs China a seemingly unrelated regression (SUR) is estimated across three sectors: apparel and textile, electronic, and transportation. Findings - From the VEC maquila employment model it is found that, in addition to the strong effect of US industrial production on the maquila employment, there exist significant short- and long-run effects of Mexico US exchange rate and Mexican wages relative to USA on maquila employment. The sectoral (SUR) model shows that competition from China has a bigger adverse effect on relatively labor-intensive good and commodities which are cheaper to transport (such as textiles) over more bulky transportation goods. The transportation sector has a location advantage, though is more sensitive to the cyclical fluctuations in the US industrial production. Research limitations/implications - Future research should investigate the role of USA and world FDI exclusively into Mexico and maquiladora sector. Practical implications - Well designed controls, output choice, and location advantage are important for the growth and viability of small scale manufacturing industries. Originality/value - The VEC model for maquila employment and the SUR framework across main maquila sectors is the first to account for wages, exchange rate, and FDI in addition to the US industrial production in understanding the decline in maquiladora employment.