Measuring International Skilled Migration: A New Database Controlling for Age of Entry

Recent data on international migration of skilled workers defineskilled migrants by education level without distinguishing whetherthey acquired their education in the home or the host country.This article uses immigrants' age of entry as a proxy for wherethey acquired their education. Data on age of entry are availablefrom a subset of receiving countries that together represent77 percent of total skilled immigration to countries of theOrganisation for Economic Co-operation and Development. Usingthese data and a simple gravity model to estimate the age-of-entrystructure of the remaining 23 percent, alternative brain drainmeasures are proposed that exclude immigrants who arrived beforeages 12, 18, and 22.     

Should smart investors buy funds with high past returns?

We fully characterize the equilibria in a gme between a fundmanager of unknown ability who control the riskiness of hisportfolio and investors who only observe realized returns. Wederive two types of equilibria. The first one is such that (i)investors invest in the fund if the realized return falls withinsome interval, i.e., is neither too low nor too high, (ii) agood manager picks a portfolio of minimal riskiness and (iii)a bad manager picks a portfolio with higher risk, "gambling"on a lucky outcome. The second type of equilibrium is more traditional:(i) investors invest in the fund if the observed return is largerthan some threshold, and (ii) good and bad managers choose thesame risk level.     

What Do the Elderly Do?

The most direct way to find out what elderly Americans do is to study how they occupy their time and, if they are still in the labor force, in what occupations can they be found. This essay focuses on three key issues regarding the activities of those 65 and over: their average use of time in 41 different activities, especially how they employ the greater discretionary time available to them in comparison to younger adults; the factors underlying their rising participation in the labor in the first decade of the twenty-first century; and the occupations that elderly men and women are most likely to be found and how this has changed.     

Informational efficiency: ranking markets

Summary. The paper studies informational properties of three types of imperfectly competitive markets: a one-signal speculative market (OSS market) in which agents have only private information about the fundamental value (v) of the risky asset traded, a two-signal speculative market (TSS market) in which agents have private information about both v and the asset supply, and a market in which agents are endowed with both information about v and shares of the risky asset traded. In this last market (JA market), agents have joint activities: they trade for both speculative and hedging purposes. It is shown that (i) the JA market and the OSS market are the most and the least efficient, respectively, and (ii) the levels of informational efficiency in the three markets are inversely correlated with the intensities with which traders use their private information about the fundamental value of the asset. Received May 28, 1999; revised version: May 28, 1999     

Too many theories,too few facts? What the data tell us about the link between span of control,compensation and career dynamics

In this paper, we use a unique personnel dataset from a large European firm in an high tech manufacturing industry that provides information about hierarchical relationships. This unusually rare feature allows us to identify the chain of command. We provide a few stylized facts about the link between span of control, compensation and career dynamics and relate our findings to the existing theoretical literature of hierarchies in organizations: the assignment model, the incentives model, the information processing model, the supervision model, and the knowledge-based hierarchy model. We observe an increase in the span, an increase in wage inequality between job levels, and the introduction of a new hierarchical level. We also find that higher spans of control are associated with higher wages. The knowledge-based hierarchy provides the most likely explanation for these results when communication costs are decreasing. However, we also find evidence of learning and reallocation of talent within and across job levels, a finding that can not be explained by a static model of knowledge based hierarchy but rather by dynamic models of careers in organizations. Finally, we provide a few suggestions to enrich the existing theoretical literature and reconcile it with the facts.     

Inequality,growth, and environmental quality trade‐offs in a model with human capital accumulation

This paper develops a simple endogenous growth model where pollution exposure and vulnerability are unequally spread across the population, and growth and distribution are endogenous. In this set‐up, we investigate whether trade‐offs between growth, distributional, and environmental concerns may emerge. We show that a tighter environmental policy reduces income inequality and can improve both growth and total welfare. Immediate welfare losses, though, do occur, and are larger for countries that start at low levels of environmental quality (e.g. developing countries).     

Information salience,investor sentiment,and stock returns: The case of British soccer betting

Soccer clubs listed on the London Stock Exchange provide a unique way of testing stock price reactions to different types of news. For each firm, two pieces of information are released on a weekly basis: experts' expectations about game outcomes through the betting odds, and the game outcomes themselves. The stock market reacts strongly to news about game results, generating significant abnormal returns and trading volumes. We find evidence that the abnormal returns for the winning teams do not reflect rational expectations but are high due to overreactions induced by investor sentiment. This is not the case for losing teams. There is no market reaction to the release of new betting information although these betting odds are excellent predictors of the game outcomes. The discrepancy between the strong market reaction to game results and the lack of reaction to betting odds may not only be the result from overreaction to game results but also from the lack of informational content or information salience of the betting information. Therefore, we also examine whether betting information can be used to predict short-run stock returns subsequent to the games. We reach mixed results: we conclude that investors ignore some non-salient public information such as betting odds, and betting information predicts a stock price overreaction to game results which is influenced by investors' mood (especially when the teams are strongly expected to win).     

The Impact of Foreign Trade on the Employment of Unskilled U.S. Workers: Some New Evidence

This paper explores four empirical relationships reflecting the impact of foreign trade on the employment of unskilled workers: (i) the direct relationship between net exports and embodied education of the corresponding goods; (ii) the changes in domestic prices accompanying changes in net exports; (iii) the relationship between real or potential import competition and defensive measures such as more investment or increasing the skill level of the labor force; and (iv) the relationship between foreign trade and domestic prices. None of these exercises suggests that foreign trade has much impact on the employment of less skilled U.S. workers.     

Demographic Effects on Personal Saving in the Future

After briefly examining the various proposed causes for the decline in the U.S. personal saving rate in the past decade, this essay then argues that a shift in the demographic composition of the population will be a much more important cause for a decline in personal saving in the future. A change in the balance between those in the labor force who are saving and retirees who are dissaving will result in a considerable fall in the aggregate saving rate under most assumptions. The simulation model used to examine this phenomenon takes into account the interest rate, the growth rate of the economy, the retirement age. the growth of population, and the life expectancy. Attention is also given to certain consequences of the fall in the saving rate, such as changes in the interest rate, changes in asset prices, and a decline in the GDP growth rate.