Controlling Illegal Immigration: Border Control vs. Domestic Enforcement

This paper presents a two-country general equilibrium model where international mobility of labor is prohibited. Illegal immigration nevertheless occurs. The probability of success at illegal immigration depends on resources allocated to border control and domestic enforcements. We examine the effects of switching resources form border control to domestic enforcement on illegal immigration and on welfare levels. We characterize the allocation of resources between the two methods of immigration control, that minimizes illegal immigration, and find that, starting from this allocation, moving resources from border control to domestic enforcement is unambiguously welfare improving for the destination country.

     

A Model of Smuggling and Trafficking of Illegal Immigrants with a Host Country Policy

This paper deals with illegal immigration via two distinct activities—smuggling and trafficking of workers. A destination–source model determines economic pay‐offs and a standard labor market policy works as a deterrent. Tax paid by legal unskilled workers at the destination is determined endogenously and it finances inland monitoring against illegal immigration, holding the border patrol at a given level. The tax also finances unemployment benefit to legal workers at the destination. The number of immigrant smugglers and traffickers is also determined endogenously along with employer penalty and market wage for illegal immigrants. Higher unemployment benefits may reduce illegal wages, raise traffickers’ rent and reduce flow of illegal immigrants from the source countries.     

Liberalism,nationalism, and self-determination: Ludwig von Mises’s Nation,State, Economy after 100 years

This year, 2019, marks the 100th anniversary of the publication of Ludwig von Mises’s lesser known book, Nation, State, and Economy, which appeared in the immediate aftermath of the First World War. One of its leading themes was to trace out the interactions between language, nationalism, and the emergence of the political movement for national self-determination. On this basis, Mises formulated an explanation of nationalist imperialism within parts of, especially, Central and Eastern Europe where there were territories with overlapping linguistic or ethnic groups. Out of this came his proposed answer to national and ethnic conflicts through a system of plebiscites for a greater degree of individual self-determination to minimize intergroup tensions between and within nation-states. His proposal is then applied for an analysis of the recent international controversies over the Russian annexation of Crimea and the United Kingdom’s vote to secede from the European Union.

     

Impact of a step-therapy protocol for pregabalin on healthcare utilization and expenditures in a commercial population

Abstract

Objective:

To compare changes in healthcare resource utilization and costs among members with painful diabetic peripheral neuropathy (pDPN), postherpetic neuralgia (PHN), or fibromyalgia (FM) in a commercial health plan implementing pregabalin step-therapy with members in unrestricted plans.

Methods:

Retrospective study of outcomes associated with implementation of a pregabalin step-therapy protocol using claims data from Humana (‘restricted’ cohort) and Thomson Reuters MarketScan (‘unrestricted’ cohort). Members aged 18–65 years receiving treatment for pDPN, PHN, or FM during 2008 or 2009 were identified; cohorts were matched on diagnosis and geographic region. Baseline to follow-up changes in healthcare resource utilization and costs were determined using difference-in-differences (DID) analysis. Statistical models adjusting for covariates explored relationships between restricted access and outcomes.

Results:

A total of 3876 restricted cohort members were identified and matched to 3876 unrestricted cohort members. FM was the predominant diagnosis (84.7%). The unrestricted cohort was older (mean?=?49.0 (SD?=?10.4) years vs 47.6 (SD?=?10.5) years; p?<?0.001), and had greater comorbidity (RxRisk-V score?=?5.4 (SD?=?3.2) vs 4.4 (SD?=?2.9), p?<?0.001) than the restricted cohort. Compared with the unrestricted cohort, the restricted cohort demonstrated a greater year-over-year decrease in pregabalin utilization (?2.6%, p?=?0.008), and greater increases in physical therapy and disease-related outpatient utilization (3.7%, p?=?0.010 and 3.6%, p?=?0.022, respectively). There were no statistically significant net differences in all-cause or disease-related total healthcare, medical, or pharmacy costs between cohorts. After adjusting for baseline compositional differences between cohorts, restricted plan membership was associated with a net increase in all-cause medical ($1222; p?=?0.016) and disease-related healthcare costs ($859; p?=?0.002). Limitations include use of a combined analysis for pDPN, PHN, and FM, especially since the observed results were likely driven by FM; an inability to link the prescribing of a medication with the condition of interest, which is common to claims analyses; and lack of pain severity information.

Conclusions:

Implementation of a pregabalin step-therapy protocol resulted in lower pregabalin utilization, but this restriction was not associated with reductions in total healthcare costs, medical costs, or pharmacy costs.     

“Why historians have failed to recognize Mises’s <Emphasis Type="Italic">Theory and History</Emphasis>”

Theory and History is often said to be Ludwig von Mises’ least read and least appreciated book. This article argues that historians in the Anglo-American world generally did not understand the German and Austrian traditions that Mises drew on, and that their early reviews of the book therefore fundamentally misunderstood its purpose. Most saw it as a political tract. Some commented on Mises’ contribution to the debate about the autonomy of the discipline of history. Few, however, understood Mises’ apriorism or logical approach. To understand why Theory and History has not been recognized for its a contribution to historical methodology, we must first understand Mises’ place as an outsider in the debates on historiography in the 1950s.     

The export effect of immigration into the USA

Much has been written on the connection between migration and international trade. Human history provides important examples of migrations leading to increased trade activity, with perhaps the most well-known example of the ‘Overseas Chinese’. This study investigates the trade-related importance of Chinese and other immigrants into the USA. Previous studies may have underestimated (or overestimated) the relationship between trade and migration with nations treated as featureless plains rather than as varied landscapes. This study contends that an understanding of the immigration–trade relationship can be improved upon by examining the specific pattern and destination of immigration into specific US states. Using state level export data to 28 immigrant source countries in 1993, a strong immigration–trade link is found, reinforcing conclusions made by previous research using country level data. The compelling connection between immigration and trade found in this study and others suggests that future changes to US immigration policies necessitate that their trade effects also be taken into account.     

The deep roots of economic development in the U.S. states: an application of Putterman and Weil (2010)

The “Deep Roots” literature investigates the effects of ancient cultural variables on economic outcomes. We extend Putterman and Weil’s (Q J Econ 125(4):1627–1682, 2010) inquiry into the effects of State History and Agricultural History to the economic output in ethnically and racially diverse fifty U.S. States. The ethnic and racial differences across the populations of the fifty U.S. states vary considerably due to historical immigration and slave flows that, as a result, produced radically different State History and Agricultural History scores across the states. Results derived from Putterman and Weil’s methodology do not robustly predict per capita levels of economic output across U.S. States. We also investigate the institutions channel, and find that they impact some measures of institutions, but they do not impact the quality of economic institutions which may be essential for promoting economic growth and development.     

GENDER DIFFERENCES IN NATIVE PREFERENCES TOWARD UNDOCUMENTED AND LEGAL IMMIGRATION: EVIDENCE FROM SAN DIEGO

The literature has noted that native views about legal as opposed to undocumented immigration in the United States differ. Furthermore, native views about immigration are known to vary by gender. Yet, most surveys do not inquire native men and women about their views with regards to the two distinct immigrant groups, thus impeding an analysis of differences in preferences toward legal and undocumented immigrants from the same sample of natives. Using a recent San Diego County survey, we examine differences in native male and female opinions with regard to legal and undocumented immigration and their determinants. Native preferences toward immigration appear to significantly differ by gender as well as according to immigrants' legal status. In addition, public finance and welfare concerns are among the key factors driving native male and female preferences toward legal and undocumented immigration. However, native women's attitudes are also impacted by concerns regarding the social integration and economic assimilation of undocumented immigrants possibly related to the alleged prejudice factor. (JEL J61, F22)     

Controlling Illegal Immigration: On the Scope for Cooperation with a Transit Country

We consider the implications of cooperation with respect to immigration control between a final‐destination country (D) and its poorer neighbor (T). Assuming that the latter serves as a transit country for undocumented immigrants, a key question is how much aid should D provide to T for the purpose of strengthening its immigration controls. The problem for T is to determine what proportion of aid to use strictly for immigration control rather than trying to meet other border‐security objectives. We examine the Nash equilibrium values of the policy instruments of both countries and compare them with those which are optimal when international cooperation on immigration control extends to maximization of joint welfare. We also consider a two‐stage game in which D first decides on how much aid to transfer to T, with the latter subsequently choosing how to use it.     

American institutionalism and its British connections

Abstract

This paper examines the connections between American institutionalists and a number of ‘non-Marshallian’ British economists and social scientists, several of whom were associated with the Fabian Society or the London School of Economics or both. Specifically, the links between institutionalists such as Walton Hamilton and Wesley Mitchell and British social scientists such as John A. Hobson, Henry Clay, R.A. Tawney, William Beveridge and Graham Wallas. It is argued that these connections were related to common views on the importance of institutions, compatible methodological views, common interest in questions of social value, shared policy concerns (particularly unemployment and the coal industry), shared interests in the development of new institutions for education and research in economics and shared connections with the funding activities of the Rockefeller Foundation. These connections were much more extensive than has usually been realized. Some reasons for this British group not to form into a movement similar to American institutionalism are explored.     

Austrian Economics,Socialism and Impure Forms of Economic Organisation

Modern supporters of the Austrian school of economics maintain that their critical stance towards impure forms of economic organisation - such as the mixed economy - grew out of the arguments of Mises and Hayek during the socialist calculation debate of the 1930s. The paper assesses the two theorists, contributions in the debate and argues that their ideas cannot provide the basis for a general rejection of impure forms of economic organisation. First of all, and contrary to most modern Austrians, who consider the contributions of Mises and Hayek as essentially consistent, it is argued that Hayek's critique of socialism is much more effective than Mises' as it rests on his concept of tacit knowldge and on an evolutionary account of the emergence of capitalist institutions. However, the paper goes on to argue that, if Hayek's critique of state intervention is to have any relevance for contemporary capitalist economies, it must be in a position to show the non-viability not only of a fully centrally planned economy of the Soviet type but also of the mixed economy. It is argued that it is precisely in this that Hayek's evolutionism fails, for his teleological approach is not persuasive in ruling out the possibility of impure forms of capitalism in a manner that is consistent with truly evolutionary - i.e. non-teleological - ideas.     

Aging,Factor Returns,and Immigration Policy

Immigration has various economic and non‐economic effects on the destination country's inhabitants. In this paper, we focus on the impact of immigration on factor returns and analyze how aging affects immigration policy, employing a dynamic political‐economy model of representative democracy. Aging, that is, a decline in the growth rate of the native population, has an expansionary effect on immigration in this framework. This immigration effect may even overcompensate the initial contraction of the labor force. We show that the immigration rate in the representative democracy equilibrium exceeds the immigration rate that would maximize welfare of current and future generations, and we also discuss the influence of social security on immigration policy.     

A Crook is a Crook … But is He Still a Crook Abroad? On the Effect of Immigration on Destination‐Country Corruption

This paper analyzes the impact of migration on destination‐country corruption levels. Capitalizing on a comprehensive dataset consisting of annual immigration stocks of OECD countries from 207 countries of origin for the period 1984–2008, we explore different channels through which corruption might migrate. We employ different estimation methods using fixed effects and Tobit regressions in order to validate our findings. Moreover, we also address the issue of endogeneity by using the Difference‐Generalized Method of Moments estimator. Independent of the econometric methodology, we consistently find that while general migration has an insignificant effect on the destination country's corruption level, immigration from corruption‐ridden origin countries boosts corruption in the destination country. Our findings provide a more profound understanding of the socioeconomic implications associated with migration flows.     

PAY EQUITY AND COMPARABLE WORTH

An important and emerging public policy consideration… generally called equal pay for comparable worth…has received great attention from those who influence or report public policy initiatives. The comparable worth movement is directed at pay equity issues, primarily between men and women. The source of controversy surrounding comparable worth concerns the mechanism for determining wages in the economy…either an unrestricted market process or a subjective valuation process by designated "pay equity experts." Although the pay and allocation mechanisms and their side effects are controversial, other important questions concern the actual method of equity determination to be used in implementing comparable worth. This paper analyzes, from a general public policy perspective, many of the issues and much of the evidence surrounding comparable worth initiatives.     

Science,innovation, and public services: editorial introduction

ABSTRACT

The quality of public services is critically influenced by innovation and, ultimately, by advances in basic research, which however embeds the feature of a global public good. Two broad issues emerge. The first concerns the evaluation of the socio-economic impact of science. What are the benefits and spillovers that R&D investments, research infrastructures and big science can bring to society? The second concerns which type of institutions and policies are most suitable for supporting R&D activities. These topics discussed in this article represent the core of the special issue “Innovation and Public Services: from the lab to enterprises and citizens”     

The Immigration Policy Puzzle

This paper revisits the puzzle of immigration policy: standard economic theory predicts that free immigration improves natives' welfare, but (with few historical exceptions) an open door policy is never implemented in practice. What rationalizes the puzzle? We first review the model of immigration policy where the policy maker maximizes national income of natives net of the tax burden of immigration. We show that this model fails to provide realistic policy outcomes when the receiving region's technology is described by a standard Cobb–Douglas or CES function. Then we describe three extensions of this basic model that reconcile theory with evidence. The first introduces a cost of integration of the immigrant community in the destination country; the second takes into account the policy maker's redistributive concern across different social groups; the last extension considers positive spillover effects of (skilled) migrants on the receiving economy.     

Local Labor Supply Responses to Immigration

How natives adjust is central to an understanding of the impact of immigration in destination countries. Using detailed labor force data for Malaysia for 1990–2010, we provide estimates of native responses to immigration on multiple extensive margins and rare evidence for a developing country. Instrumental variable estimates show that increased immigration to a state causes substantial internal inward migration, consistent with the fact that immigration increases the demand for native workers. Relocating Malaysian workers are accompanied by their spouses (three‐quarters of whom are housewives) and children who attend school. We find that these effects are concentrated among middle‐ and lower‐skilled Malaysians.     

Immigration and economic growth: do origin and destination matter?

This article assesses the heterogeneous effects of immigration on economic growth depending on both the origin and the destination countries. Following the development of a growth model augmented by human capital of immigrants, we estimate it in a dynamic panel setup using the system-GMM estimator. We find that the growth-enhancing effect of immigration is significantly larger when immigration flows from developed to developing economies than when it does to those that include both developed and developing economies. We interpret these results as evidence of immigrants from developed countries bringing with them their advanced knowledge into the developing countries.     

Refugee Immigration and Total Factor Productivity

This paper uses panel cointegration and causality techniques to examine the long-run relationship between refuge immigration and total factor productivity (TFP), a relationship that has not yet been examined in the literature. It is found that refugee immigration has, on average, a positive long-run effect on TFP, suggesting that refuge immigration increases the diversity of skills and ideas available to society as a whole, which in turn promotes specialization and innovation. It is also found that causality is unidirectional from refugee immigration to TFP, suggesting that refugees are primarily motivated by the push factor of persecution in the source country rather than by productivity (and hence welfare) gains as a potential pull factor in the destination country.     

Germany,the problem of leadership,and institution-building in EMU reform

ABSTRACT

This article examines the extent to which Germany has provided leadership in creating institutions to overcome the euro area crisis. Under which conditions does Germany act as a driver of institutional change, and what are the implications for the Economic and Monetary Union? Germany’s leadership record is mixed: while it took the lead in enhancing austerity, it refrained from fostering burden-sharing. As a result, EMU faces a persistent imbalance between enhanced institutions of supervision and insufficient institutions of financial assistance. Moreover, the article points out that current conditions for the emergence of German leadership in the euro area are unfavourable.