Migration,FDI, and Welfare

We investigate migration and foreign direct investment (FDI) for a small trading economy. Historically, immigration in small countries has been accompanied by FDI inflows (complementary capital movements). Based on the skill composition of migrants, empirical evidence finds that skilled immigration is accompanied by FDI inflows but unskilled immigration is accompanied by FDI outflows (substitutable capital movements). We prove that the Heckscher-Ohlin model cannot reconcile these apparently contradictory observations. We introduce a theoretical model in which capital and unskilled labor are sector specific, and demonstrate that this model can reconcile the historical and empirical observations on migration and FDI.     

Running the Numbers on Lotteries and the Poor: An Empirical Analysis of Transfer Payment Distribution and Subsequent Lottery Sales

State lottery revenues are shown to increase during the week transfer payments are distributed. The timing of the increase in lottery purchases suggests a portion of the transfer payments is used to purchase lottery tickets. In addition to providing information on the timing of lottery purchases, this study finds sales of Pick 3 and Pick 4 tickets increase during the period, while sales of Pick 5 and Pick 6 games do not, suggesting a general preference for the relatively higher probability, smaller jackpot games for the group.

The roles of insurance and well-specified standards in dealing with environmental risks

The present liability system for managing environmental risks has had huge transaction costs through the courts with limited funds actually utilized for compensation (except to the lawyers) and cleanup of wastes. This paper discusses the use of insurance coupled with well-specified standards as an alternative to the current system. It illustrates the potential for the use of these policy tools in the context of two environmental risk management problems: providing liability protection to contractors involved in asbestos removal and protecting commercial property lenders and owners from liabilities associated with environmental contamination.     

TRAINING AND LABOUR MARKET SEGMENTATION

A two period model of the training decision is analysed using a human capital approach. The segmented labour market model where training opportunities distinguish entrants is compared with a competitive structure with homogeneous entrants. The main conclusions in the paper are the clear effects of training wages and the different effects in the two market structures of both wages and employment prospects in the unskilled market on training.     

Can tourism be part of the decarbonized global economy? The costs and risks of alternate carbon reduction policy pathways

Global leaders agree on the need to substantially decarbonize the global economy by 2050. This paper compares potential costs associated with different policy pathways to achieve tourism sector emission reduction ambitions (?50% by 2035) and transform the sector to be part of the mid-century decarbonized economy (?70% by 2050). Investment in emissions abatement within the tourism sector, combined with strategic external carbon offsets, was found to be approximately 5% more cost effective over the period 2015–2050 than exclusive reliance on offsetting. The cost to achieve the ?50% target through abatement and strategic offsetting, while significant, represents less than 0.1% of the estimated global tourism economy in 2020 and 3.6% in 2050. Distributed equally among all tourists (international and domestic), the cost of a low-carbon tourism sector is estimated at US$11 per trip, equivalent to many current travel fees or taxes. Exclusive reliance on offsetting would expose the sector to extensive and continued carbon liability costs beyond mid-century and could be perceived as climate inaction, increasing reputational risks and the potential for less efficient regulatory interventions that could hinder sustainable tourism development. Effective tourism sector leadership is needed to develop a strategic tourism policy framework and emission measurement and reporting system.