The surge in U.S. wage inequality over the past several decades is now commonly attributed to an increase in the returns paid to skill. Although theories differ with respect to why, specifically, this increase has come about, many agree that it is strongly tied to the increase in the relative supply of skilled (i.e., highly educated) workers in the U.S. labor market. A greater supply of skilled labor, for example, may have induced skill-biased technological change or generated greater stratification of workers by skill across firms or jobs. Given that metropolitan areas in the U.S. have long possessed more educated populations than non-metropolitan areas, these theories suggest that the rise in both the returns to skill and wage inequality should have been particularly pronounced in cities. Evidence from the U.S. Census over the period of 1950 to 1990 supports both implications.

Recent influential empirical work has emphasized the negative impact immigrants have on the wages of U.S.-born workers, arguing that immigration harms less educated American workers in particular and all U.S.-born workers in general. Because U.S. and foreign born workers belong to different skill groups that are imperfectly substitutable, one needs to articulate a production function that aggregates different types of labor (and accounts for complementarity and substitution effects) in order to calculate the various effects of immigrant labor on U.S.-born labor. We introduce such a production function, making the crucial assumption that U.S. and foreign-born workers with similar education and experience levels may nevertheless be imperfectly substitutable, and allowing for endogenous capital accumulation. This function successfully accounts for the negative impact of the relative skill levels of immigrants on the relative wages of U.S. workers. However, contrary to the findings of previous literature, overall immigration generates a large positive effect on the average wages of U.S.-born workers. We show evidence of this positive effect by estimating the impact of immigration on both average wages and housing values across U.S. metropolitan areas (1970-2000). We also reproduce this positive effect by simulating the behavior of average wages and housing prices in an open city-economy, with optimizing U.S.-born agents who respond to an inflow of foreign-born workers of the size and composition comparable to the immigration of the 1990s.

Over the course of the twentieth century more than ten million people left the southern United States for the North and West. After five decades of consistent large-scale outmigration, the tide slowly began to shift back to the South in the early 1970s. By the end of the decade, for the first time in more than a century, the South actually showed a net in-migration of both blacks and whites.1 The late-twentieth century return migration has emerged as a vibrant area of investigation in its own right, but millions of southern out-migrantsparticularly southern whitesreturned to the South during the Great Migration.2 We know very little about the return movement that took place during the period primarily associated with the southern out-migration, between World War II and 1970.3 Understanding these return migrants reveals not only the precursors to the now-dominant southbound stream, but it also has implications for our understanding of southern migrants in the North. As numerous studies of return migration in other contexts have suggested, return migrants have an impact on the places they leave. A highly transient migrant stream can inhibit the development of migrant community, for instance, and short-term migrants almost always draw at least some sort of antipathy from both long-term settlers and other local residents alike....

In many Asian countries the ratio of male to female population is higher than in the West-as high as 1.07 in China and India, and even higher in Pakistan. A number of authors (most notably Sen, 1992) have suggested that this imbalance reflects excess female mortality and, as a result, have argued that as many as 100 million women are "missing." This paper proposes an explanation for some of the observed over-representation of males: the hepatitis B virus. I present new evidence, consistent with an existing scientific literature, that carriers of the hepatitis B virus have offspring sex ratios around 1.50 boys for each girl. This evidence includes both crosscountry analyses and a natural experiment based on recent vaccination campagins. Hepatitis B is common in many Asian countries, especially China, where some 10 to 15% of the population is infected. Using data on viral prevalence by country as well as estimates of the effect of hepatitis on sex ratio, I argue that hepatitis B can account for about 45% of the "missing women": around 75% in China, between 20% and 50% in Egypt, and West Asia, and under 20% in India, Bangladesh, Pakistan and Nepal.

Since 1975, the U.S. government has passed several laws to improve the child support system. Contrary to expectations, after adjusting for inflation, average child support income declined over the early part of the reform period, falling by 24.3% between 1975 and 1989. It recovered to increase by 21.7% between 1989 and 2002. This amounts to a 7.9% decrease in child support income between 1975 and 2002. This paper identifies the factors that drive trends in child support income and provides an accounting method to measure their impact. Results show that a fall in fathers incomes was responsible for 76% of the early drop in child support, while 56% of the subsequent rise was due to improvedcompliance.

In many Asian countries the ratio of male to female population is higher than in the West-as high as 1.07 in China and India, and even higher in Pakistan. A number of authors (most notably Sen, 1992) have suggested that this imbalance reflects excess female mortality and, as a result, have argued that as many as 100 million women are "missing." This paper proposes an explanation for some of the observed over-representation of males: the hepatitis B virus. I present new evidence, consistent with an existing scientific literature, that carriers of the hepatitis B virus have offspring sex ratios around 1.50 boys for each girl. This evidence includes both crosscountry analyses and a natural experiment based on recent vaccination campagins. Hepatitis B is common in many Asian countries, especially China, where some 10 to 15% of the population is infected. Using data on viral prevalence by country as well as estimates of the effect of hepatitis on sex ratio, I argue that hepatitis B can account for about 45% of the "missing women": around 75% in China, between 20% and 50% in Bangladesh, Egypt, and West Asia, and under 20% in India, Pakistan and Nepal.

Despite quantitative evidence that cities along the U.S.-Mexico border experienced an economic boom in the early 1900s, the empirical findings based on U.S. Census data in the Integrated Public Use Microdata Series indicate that on average, occupational income on the U.S.-side of the border declined relative to the U.S.-interior between 1900 and 1920. Further evidence suggests that this decline only partly related to the relative shift toward agriculture that occurred along the U.S.-Mexico border during that time. The development of a border earnings penalty in the presence of local economic growth suggests that such growth does not represent a sufficient condition to improve the overall socioeconomic conditions of American cities located on the Mexican border.

The existence and extent of occupational gender segregation is well known. This is commonly taken as an indication of gender inequality, but this is incorrect. In general the more egalitarian countries, in terms of gender, tend to have higher levels of gender segregation. To understand this we must appreciate that occupational gender segregation is the resultant of two components, a vertical dimension which does measure gender inequality, and a horizontal component that measures difference without inequality. The vertical dimension measures the extent of advantage/disadvantage of men compared to women in the stratification structure. The structural inequalities of social stratification are usually understood by sociologists as being represented in a stratification scale, and the most useful scale for analysing gender segregation (or any structure of occupational inequality) is CAMSIS. This measures the general desirability of occupations and so includes the inequalities traditionally conceived as class and status. However, economists and the general public are more likely to see occupational inequality in terms of income from wages and salaries. Although income is only one aspect of occupational attractiveness it is an important one, and tends to be quite well related to other aspects of occupational attractiveness. The paper considers these two stratification measures of vertical segregation, and their contributions to the resultant (of vertical and horizontal segregation) overall segregation. The main countries considered are the USA and Britain. The analysis shows the expected male advantage on income, though rather less than some might expect. In terms of occupations’ general attractiveness (CAMSIS) the situation does not display the ‘expected’ male advantage. The explanation of the observed patterns is then considered.

The first chapter develops a Random Utility Model for Deposits in the US Banking Industry assessing its particular characteristics, such as a large number of participants, a large number of markets and an unbalanced panel (many banks participate in only one market and no bank participates in all markets).We modify the standard models to incorporate the fact that deposit balances are different among consumers, in a relationship proportional to their wealth. Using a unique dataset, we estimate the model and find that characteristics other than the interest rate, such as branch density, state presence, etc. add utility to the consumer. The model is also helpful in offering a more realistic set of elasticities among the many banks present in the sample. It shows how market shares will respond depending on the market demographics and current choice set (i.e. offerings of other banks).The second chapter uses the results of the model to analyze changes in welfare during the 1994-2002 period. By applying a slightly modified version of Small & Rosens equivalent variations, we find that the consolidation process of the late 90s was welfare enhancing, particularly for the middle-income consumer. The chapter also discusses the usefulness of the model in assessing mergers and acquisitions. In general, the predictive capabilities of the model are not superior to the current market share addition method applied by the DOJ, but they are helpful in the sense that they uncover some dynamics that are important when assessing potential welfare and competition effects.Finally, Chapter 3 analyzes how banks manage exchange rate volatility when operating in a dual-currency environment. From a portfolio perspective and using simple mean variance analysis and conjectural variations, we show that banks react to higher uncertainty on the level of depreciation by reducing their exposure to exchange rate volatility. This will probably imply a reduction of the portfolio currency mismatch, unless the sensitivity of dollar denominated NPLs to the exchange rate as well as the level of dollar loans in the portfolio are high enough.

This paper addresses the implications of the winner-take-all economy for income inequality among artists. Using the U.S. census public-use samples, as refined by the Minnesota Population Center, it employs the standard measure of income inequality—the Gini coefficient—to examine income inequality among artists in six major metropolitan areas between 1980 and 2000. The paper compares income inequality among artists with that of other professional workers and among individual categories of artists. Finally, it examines inequality through the lens of ethnicity and gender. The paper concludes that artists are an ‘old’ winner-take-all occupation. In 1980 artists displayed an unusually high degree of within-occupation inequality. However, artists’ inequality did not increase as quickly between 1980 and 2000 as that within the rest of the labor force. By contrast, in the general labor force, African American and female workers had a less unequal income distribution than the general population. Among artists, however, income was distributed more unequally among blacks and women. Finally, the analysis finds significant variation in artists’ income inequality across metropolitan areas. The winner-take-all hypothesis would lead us to expect that metropolitan areas that are ‘global cities’ in the arts world—notably New York and Los Angeles—would have greater inequality than other cities. This is not the case, however. On the one hand, Los Angeles displayed the highest level of income equality among cultural workers. On the other hand, New York— where income inequality among all workers was generally higher than elsewhere—had among the lowest levels of artist income inequality.

The nineties has been a period of increasing migratory flows from less developed countries to industrialized nations. It is instructive to compare the two largest economies in the world, the European Union and the United States, in terms of the magnitude, trends and composition of their migratory inflows. While the two economies are similar in terms of size and level of development, the European Union still lags behind in its ability to attract immigrants and in the degree of internal mobility of its citizens. Moreover we document a general feature that became more prominent during the nineties. While both economies attracted less educated workers (primary school graduates) as well as highly educated workers (college graduates) from less developed countries, the United States have been able to attract talent ( i.e. the best among the skilled workers) from all over the world at a rate unmatched by the European Union. In fact the U.S. attracted a large number of talents from the European Union itself during the nineties. This brain drain (probably driven by the large economic reward granted by the American economy to scientific, technological and professional talent) is worrisome for the European Union. Its ability to keep pace with the economic growth of the United States depends, in fact, on its ability to compete in the scientific and technological fields.

Over the past several decades, the number of lawyers in large cities has doubled, women have entered the bar at an unprecedented rate, and the scale of firms has greatly expanded. This immense growth has transformed the nature and social structure of the legal profession. In the most comprehensive analysis of the urban bar to date,Urban Lawyers presents a compelling portrait of how these changes continue to shape the field of law today.Drawing on extensive interviews with Chicago lawyers, the authors demonstrate how developments in the profession have affected virtually every aspect of the work and careers of urban lawyers-their relationships with clients, job tenure and satisfaction, income, social and political values, networks of professional connections, and patterns of participation in the broader community. Yet despite the dramatic changes, much remains the same. Stratification of income and power based on gender, race, and religious background, for instance, still maintains inequality within the bar.The authors of Urban Lawyers conclude that organizational priorities will likely determine the future direction of the legal profession. And with this landmark study as their guide, readers will be able to make their own informed predictions.

We estimate the aggregate long-run elasticity of substitution between more educated workers and less educated workers (the slope of the inverse demand curve for more relative to less educated workers) at the U.S. state level. Our data come from the (five) 1950-1990 decennial censuses. Our empirical approach allows for state and time fixed effects and relies on time- and state-dependent child labor and compulsory school attendance laws as instruments for (endogenous) changes in the relative supply of more educated workers. We find the aggregate long-run elasticity of substitution between more and less educated workers to be around 1.5. © 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

The Kansas Bureau of Labor and Industry surveyed attitudes towards immigration during the 1890s. The surveys reveal that individuals opposed immigration for cultural and economic reasons. Key correlates were the position in the labor market, the business cycle, and immigrant status. The magnitudes of the effects indicate that economic factors explain twice the variation in opinions across individuals than cultural factors explain. In addition, changes in economic conditions from 1880 to 1920 explain a substantial share of the rise in anti-immigrant sentiments at the end of the nineteenth and during the early twentieth centuries, but other factors, such as the rise of the eugenics movement, must have had at least as large a role.

We study the problem of one dimensional selectivity estimation in relational databases. We introduce a new type of histogram based on information theory. We compare our histogram against a large number of other techniques and on a wide array of datasets. We observe the entropy histograms to fare well on real data. While they do not outperform all methods on all datasets, neither do any other methods. The entropy histograms outperformed all other methods on 4 out of 9 real datasets and tied for first on another two. This conclusion demonstrates that the entropy histograms are an excellent choice of summary structure for selectivity estimation with respect to the state-of-the-art. We also observe that all methods demonstrate a wide variety of behavior across real and synthetic datasets. Along these lines we observe results not consistent with many conclusions drawn in the literature concerning method accuracy ranking. We believe that the literature has not adequately characterized the performance of previous techniques.

Between 1930 and 1970, almost fifteen million Americans left their homes and farms to seek new opportunities in other states, one of the largest population movements in American history. When popular literature and television documentaries describe this migration, the story usually involves black migrants who ride the Illinois Central out of the Mississippi Delta in a desperate escape from the malevolent effects of the mechanical cotton picker. Yet this population movement . . .

Do income taxes levied at a state or regional level affect the after-tax distribution of income? Or do workers merely move between regions, causing pre-tax wages to adjust? This question is relevant both in across states in the United States, and across countries within the European Union. Using the full income tax parameters for all US states from 1977-2002, I create a "simulated tax redistribution index", which captures the mechanical impact of the changes in tax policy on the gini coefficient, but is exogenous to any behavioral response. Analyzing the effect of this redistribution index on inequality, I find that gross wages do not adjust so as to fully offset the effect of more redistributive taxes. Exploring the adjustment process further, I create a new class of tax redistribution measures, based on the S-Gini, which differentially weight effects at the bottom and top of the distribution, and conclude that neither taxes that particularly affect the rich or the poor seem to affect the distribution of wages. Redistributive taxes do not appear to affect interstate migration or total state personal income. From a political economy perspective, I also find some evidence that more inequality leads states to implement more redistributive taxes, which may help explain why earlier studies observed a positive relationship between redistribution and inequality.