U.S. IMMIGRATION REFORM: POLICY ISSUES AND ECONOMIC ANALYSIS

In recent years, legal U. S. immigration has approached historically high levels, and illegal immigration has been thought to be high and perhaps rising. Consequently, the Select Commission on Immigration and Refugee Policy proposed sweeping changes in the nation's immigration laws. During 1984, both the Senate and House passed the Immigration Reform and Control Act (Simpson-Mazzoli Bill). This bill subsequently died in the conference committee that was established to reconcile differences between the bill's two versions. The proposed act has three major provisions: (1) control of illegal immigration, (2) legalization of alienstatus, and (3) reform of legal immigration. Both the House and Senate versions would maintain the present orientation of U.S. immigration policy toward family reunification, but the Senate proposed significant changes in legal immigration restrictions that would shift policy slightly more toward labor considerations. These proposed changes were eliminated in the compromise made in the conference committee. Employer sanctions and legalization of illegal aliens were left as the two most prominent alterations to existing policy. During 1985, the 99th Congress is likely to reconsider the Simpson-Mazzoli Bill, perhaps in a streamlined version which emphasizes employer sanctions, legalization, and a substantial increase in border enforcement.     

Bargaining Effects of the Mandatory-Permissive Distinction

This study uses a laboratory experiment to examine empirically the effect of the mandatory permissive distinction on the negotiation of wages, employment guarantees, and advertising expenditures. Results suggest that negotiators spend more time bargaining over a smaller settlement range when an issue is mandatory than when it is permissive. Further, tentative findings provide no evidence that negotiators can circumvent the distinction through the use of tradeoffs across issues or bargaining power.     

DISINFLATION AND HOUSING INVESTMENT: A REVISIOIIIST ANALYSIS

The pattern of housing investment through the Seventies was a product of high and variable rates of inflation, a financing system that was segmented from other capital markets and restricted in scope, and a tax system that abetted the demand for housing relative to other investments. In the early Eighties, each of these elements changed. Financial reform brought the housing name system into tune with the rest of the financial sector, and tax cuts increased the demand for forms of investment other than housing. Most important, the rate of inflation slowed dramatically, falling below 4 percent in both 1982 and 1983. The result of all these occurrences was fairly predictable: A decline in the demand for housing as an investment. However, this declining demand has been offset by two factors. The first is the drop in nominal interest rates that accompanied declining inflation. This increased the "affordability" of homing. Second, large numbers of households entered prime home-buying years and spurred demand for housing as shelter. The current situation is a housing market driven more by consumption demand than by investment demand     

An Equilibrium Model of Asset Trading with Sequential Information Arrival

In an effort to better understand the dynamic market price adjustment process, this paper develops a model which describes the impact of new information on a financial market. The primary emphasis is on the price change-volume relationship in the presence of a margin requirement. We find that the margin requirement significantly affects the relation of price change to volume. Furthermore, this relationship is shown to be affected by the number of investors in the market, the degree of information dissemination, differences in interpretation of information and the implicit cost of the margin requirement.     

Stability of the U.S. Short-Run Money Demand Function, 1959–81

Stability tests are performed for the conventional U.S. money demand equation using switch regression techniques. This methodology provides for the identification of the shift point and the type of shift (abrupt or drift), and is conducive to hypothesis testing to determine the sources of the shift for the regression equation. Our findings do not support the contention that the 1974 change in money demand equation is a downward shift in the constant term, as suggested by many recent empirical money demand studies.     

The Turn-of-the-Year in Canada

A number of investigators have reported that January stock returns in the U.S. exceed returns for other months of the year. This paper documents a similar finding for Canadian stocks over the period 1951–1980. However, Canada did not introduce a capital gains tax until 1973 and the paper reports that January returns in Canada exceed returns for other months of the year before and after this date. Thus, these data do not support the tax-loss-selling-pressure hypothesis as the entire explanation for the turn-of-the-year effect in stock returns, nor, by implication, do they support the tax-loss-selling-pressure hypothesis as the complete explanation for the “small firm” effect in U.S. stocks returns.