Qualifications,discrimination, or assimilation? An extended framework for analysing immigrant wage gaps

In this paper, we analyze immigrant wage gaps and propose an extension of the traditional wage decomposition technique, which is a synthesis from two strains of literature on ethnic/immigrant wage differences, namely the assimilation literature and the discrimination literature. We estimate separate wage equations for natives and a number of immigrant groups using panel data sample selection models. Based on the estimations, we find that the immigrant wage gap is caused by a lack of qualifications and incomplete assimilation, and that a large fraction of that gap would disappear if only immigrants could find employment and thus accumulate work experience.First version received: June 2001 / Final version received: October 2003The project has been supported financially by the Danish Research Agency (the FREJA grant) and TSER. Furthermore, the first author received support from the Danish Social Science Research Council (SSF) while this work was undertaken. We are grateful for comments from the editor of Empirical Economics, Bernd Fitzenberger, two anonymous referees, several seminar and conference participants, and for the research assistance done by Thomas H. Jensen.     

Optimal unemployment benefit policy and the firm productivity distribution

This paper provides a novel justification for a declining time profile of unemployment benefits that does not rely on moral-hazard or consumption-smoothing considerations. We consider a simple search environment with homogeneous workers and low- and high-productivity firms. By introducing a declining time profile of benefits, the government can affect the equilibrium wage profile in a manner that enhances the sorting of workers across low- and high-productivity firms. We demonstrate that optimal government policy depends on the dispersion and skewness of the firms’ productivity distribution.     

Selective versus Random Moose Harvesting: Does it Pay to be a Prudent Predator?

Seeking to act as prudent predators in many biological systems, humans try to harvest in a sustainable manner. In Sweden, wildlife managers and moose hunters use information about the future contribution of individual moose to population growth (i.e., their reproductive value), in order to harvest low-and non-reproductive animals. This selective harvest strategy results in a significantly faster overall population growth rate. To investigate whether this selective harvest policy is economically beneficial, we calculated the present value of the selective moose hunting policy used in Sweden compared to the present value of a non-regulated (i.e. random) moose harvest. Present values of the moose hunting produced by the different hunting regimes were calculated for a period of ten years and at interest rates ranging between 1% and 10%. The difference in present value between the selective hunting policy and the average outcome of random harvesting was SEK 310 million ($ 36 million) and SEK 300 million ($ 34 million), or SEK 1 321 ($ 154) and SEK 1 279 ($ 149) for an average moose hunter, when using interest rates of 3% and 4%, respectively. To determine whether the current selective moose hunting policy is economically profitable or not, benefit estimates like these should be weighted against the costs of upholding the policy. Most of the costs probably lie in providing the hunters with information about the future harvesting prospects and reducing the risk of divergences from the policy. The welfare effects of a hunting policy will also be dependent on the individual hunter's preferences, for instance in terms of their attitudes towards risk. This revised version was published online in August 2006 with corrections to the Cover Date.     

On a class of loans with a systematic amortisation schedule

Abstract

In this paper we show that a single set of formulas will characterise a wide range of standard loans. This makes it possible to describe these loans in a compact manner and facilitates the design of computer programs calculating their characteristics. The characterisation includes the entire amortisation schedule before and after tax and the duration and convexity measures.     

THE DRIVERS OF STRUCTURAL CHANGE

The main goal of this paper is to provide an integrated survey of the literature devoted to identifying the drivers of structural change, broadly defined as the process of reallocation of economic activity across the three broad sectors agriculture, manufacturing and services. Using the GGDC 10‐Sector Database, this paper first presents the empirical facts associated with structural change in different regions of the world – that is Europe and the USA, Asia, Latin America, and Africa – then reviews four determinants of structural change: (i) changes in income, (ii) changes in relative (sectoral) prices, (iii) changes in input–output linkages and (iv) changes in comparative advantage(s) via globalization and trade.     

Energy advice service as perceived by Swedish homeowners

External actors can influence potential adopters to adopt energy efficiency measures. In Sweden municipality energy advisers are one such actor group who provides energy advice and information to the end users. The success of energy advice service for improvement of energy efficiency of detached houses depends on homeowners' perception towards it. In this context, we conducted a national survey of about 3000 owners of detached houses through stratified random sampling method in the summer of 2008. We found that majority of owners of detached houses consider energy advisers as an important source of information. Furthermore, many homeowners who contacted energy advisers for advice had implemented the suggestions. However, only a few homeowners had contacted an energy adviser. Our findings suggest that it is beneficial to continue the energy advice service, but more efforts are needed to increase homeowners' awareness of and satisfaction with such services.     

Moose Hunting Values in Sweden Now and Two Decades Ago: The Swedish Hunters Revisited

This paper is based on two national contingent valuation studies dealing with the extent and economic values of hunting in Sweden. The first valuation study was conducted in 1987 and the second in 2006. Both the game resource and the hunter community have undergone changes in the two decades covered by the surveys. An important purpose of the latter survey was to repeat relevant parts of the former one, which created a rare opportunity to compare valuations covering a very long time span. Moose hunting value and its determinants were compared between the two studies, showing that significant changes have taken place. Our analysis suggests caution in using results from old contingent valuation studies for e.g. benefits transfer exercises.     

Option pricing with quadratic volatility: a revisit

This paper considers the pricing of European options on assets that follow a stochastic differential equation with a quadratic volatility term. We correct several errors in the existing literature, extend the pricing formulas to arbitrary root configurations, and list alternative representations of option pricing formulas to improve computational performance. Our exposition is based entirely on probabilistic arguments, adding a fresh perspective and new intuition to the existing PDE-dominated literature on the subject. Our main tools are martingale methods and shifts of probability measures; the fact that the underlying process is typically a strict local martingale is carefully considered throughout the paper.