Nicole B. Simpson

Unsecured debt with public insurance: From bad to worse ☆

In U.S. data, income interruptions, the receipt of public insurance, and the incidence of personal bankruptcy are all closely related. The central contribution of this paper is to evaluate both bankruptcy protection and public insurance in a unified setting where each program alters incentives in the other. Specifically, we explicitly allow for distortion created by the default option and public insurance to affect 1) risk-taking, 2) borrowing, and 3) search effort. Our analysis delivers two striking conclusions. First, we find that U.S. personal bankruptcy law is an important barrier to allowing the public insurance system to improve welfare. Second, contrary to popular belief, we find that increases in the generosity of public insurance will lead to more, not less, bankruptcy.

The Effects of International Migration on the Well-Being of Native Populations in Europe

Very little is understood about how immigrants affect the happiness, or subjective well-being of natives. We use the European Social Survey to analyze the effects of aggregate immigration flows on the subjective well-being of native-born populations in a panel of 26 countries between 2002 and 2010. We find that recent immigrant flows have a nonlinear, yet overall positive impact on the well-being of natives, with the largest effects coming from immigrant flows arriving in the previous year. Our results are small in magnitude and in practical application; only large immigrant flows would affect native well-being significantly.JEL codesF22, I31, O15

Mexican migration to the United States Pacific Northwest

The migration of Mexicans to the Pacific Northwest region(PNW) of the United States has received little attention in scholarly literature. This is unfortunate, as Mexican migration has significantly affected this region, both economically and culturally. Using data supplied by the Mexican Migration Project, we compare the characteristics of Mexican migrantsto the Pacific Northwest with characteristics of Mexicans who migrate to other parts of the U.S. The data reveal significant differences between the two groups: Mexican migrants to the PNW earn lower U.S. wages, are less likely to migrate illegally, and more commonly work in agriculture. They also are more transitory in nature, making more frequent, shorter trips to the U.S. Most interesting is that PNW migrants send significantly more money back home compared to Mexican migrants in other parts of the U.S., even after controlling for the aforementioned differences in individual characteristics.

Recent Trends in the Skill Composition of Legal U.S. Immigrants

We examine fluctuations in the predicted educational attainment of newly arrived legal U.S. immigrants between 1972 and 1999 by combining data from the U.S. Immigration and Naturalization Service with the Current Population Survey. A mid-1980s decline gave way to a noticeable improvement in the skill base of the immigrant population between 1987 and 1993. A short decline in the quality of immigrant skills—less severe than that of the mid-1980s—took place in the mid-1990s. In 1998, the trend reverses once more: The labor market quality of new legal U.S. immigrants improves. The primary sources of the fluctuations include changes in the quality and quantity of immigrants obtaining an adjustment and variations in the distribution of source regions and entry class types among new legal U.S. immigrants.

The Short‐ and Long‐Run Determinants of Less‐Educated Immigrant Flows into U.S. States

We use a gravity model of migration and alternative estimation strategies to analyze how income differentials affect the flow of immigrants into U.S. states using annual data from the American Community Survey. We add to existing literature by decomposing income differentials into short- and long-term components and by focusing on newly arrived less-educated immigrants between 2000 and 2009. Our sample is unique in that the vast majority of our observations take zero values. Models that include observations with zero-flow values find that recent male immigrants respond to differences in (short-term) GDP fluctuations between origin countries and U.S. states, and perhaps to (long-term) trend GDP differences as well. More specifically, GDP fluctuations pull less-educated male immigrants into certain U.S. states, whereas GDP trends push less-educated male immigrants out of their countries of origin. Effects for less-educated women are less robust, as GDP coefficients tend to be much smaller than for men.

A Classroom Experiment on Exchange Rate Determination with Purchasing Power Parity

The authors developed a classroom experiment on exchange rate determination appropriate for undergraduate courses in macroeconomics and international economics. In the experiment, students represent citizens from different countries and need to obtain currency to purchase goods. By participating in an auction to buy currency, students gain a better understanding of currency markets and exchange rates. The implicit framework for exchange rate determination is one in which prices are perfectly flexible (in the long run) so that purchasing power parity (PPP) prevails. Additional treatments allow students to examine the effects of price changes, tariffs, and nontradable goods on the exchange rate and to explore the possible resulting deviations from PPP. The experiment is suitable for classes of 8 to 50 students and can be run in as short a period as 30 minutes.

The economics of immigration

Preface 1: Why Study Immigration? 2: Who Becomes an Immigrant? 3: Where Immigrants Go 4: Labor Market Effects: Theory 5: Labor Market Effects: Evidence 6: Effects on Other Markets 7: Fiscal Effects 8: Assimilation 9: The Second Generation 10: Immigration Policy 11: Immigration in a Global Context: Developed Countries 12: Immigration in a Global Context: Developing Countries 13: Conclusion

What should be taught in Intermediate Macroeconomics

A lack of consensus remains on what should form the theoretical core of the undergraduate intermediate macroeconomic course. In determining how to deal with the Keynesian/classical divide, instructors must decide whether to follow the modern approach of building macroeconomic relationships from micro foundations, or to use the traditional approach based on aggregate models of the macroeconomy. In this article, the authors discuss the advantages and shortcomings of each approach in the context of course objectives. Because there is significant heterogeneity in textbook coverage, the authors summarize some of the approaches taken in current intermediate-level textbooks, which should serve as a useful starting point for new instructors. The authors also discuss how each approach can be extended to analyze the recent recession in the United States.

Chapter 1 - Migration Theory*

This chapter provides a comprehensive expository survey and synthesis of the theoretical determinants of migration. Early work beginning with Adam Smith, running through the pioneering research of Larry Sjaastad in the 1960s, and continuing through the end of the twentieth century established the broad themes that persist in the literature. Migration is an act of human capital investment. Whether migration occurs across internal or international borders is largely irrelevant from a theoretical standpoint, as both types of flows are primarily driven by a desire to exploit geographic variation in the return to labor. We go on to show that while the earliest models treated migration as a static decision determined by exogenous wages that vary across different levels of human capital, more recent models emphasize the endogenous and dynamic nature of the migration decision and wages. We conclude the chapter with suggestions of further extensions of the human capital/migration model.