What circumstances lead a government to promote brain drain?

This paper aims to complement the existing theoretical brain drain literature, focusing on the interaction between education, skilled emigration and government intervention in a small open economy. This article first characterises different emigration patterns that may arise in equilibrium, then seeks the conditions that lead a government to promote brain-drain. The model shows that the government may promote skilled emigration among workers with intermediate skills even though the resulting brain drain decreases per capita income. Emigrants remittances outweigh the income they would produce if they did not emigrate. Therefore, the government makes less severe the fall in per capita income that follows the brain drain by encouraging emigration among those skilled workers who are more productive abroad.     

Revisiting the objectives of worker-managed firms: An empirical assessment

This paper provides new evidence on the objectives pursued by worker-managed firms (WMFs). The basic neoclassical model assumes that WMFs maximizes net income per member instead of total profits (Ward, 1958). Even though it has been largely criticized, the Ward model has dominated the self-management literature. Alternative models suggest that WMFs are not only concerned about income per worker but also about the level of employment. However, the empirical content of these competing theoretical models has been rarely analyzed. This paper contributes to fill this gap by estimating the parameters of a generic welfare function, following the methodology proposed by Craig and Pencavel (1993). These parameters determine the relative importance that a WMF places on income per worker vis-a-vis the level of employment. Estimates are based on a long micro-panel of Uruguayan firms covering the entire population of Uruguayan worker-managed firm and conventional firms in 31 3-digit sectors over the period April 1996-December 2005. Following a strictly neoclassical framework, but simply allowing a more general specification of the WMF goals, we show that the assumption of the basic neoclassical model of the WMF is misleading. Our results support the view that WMFs are concerned with both employment and income per worker.     

Labour‐market institutions and their impact on trade partners: A quantitative analysis

Recent theoretical literature studies how labour market reforms in one country can affect labour market outcomes in other countries, thereby rationalizing widely held policy beliefs and empirical evidence. But what is the quantitative relevance of such spillover effects? This paper combines two recent workhorse models: the canonical search‐and‐matching framework and the heterogeneous firms international trade model. Qualitatively, the framework confirms that labour market reforms in one country benefit its trading partners, replicating the stylized facts. However, when wages are bargained flexibly, the model quantitatively underestimates the correlation of structural unemployment rates across countries. Introducing some degree of real wage rigidity remedies this problem.     

THE NONPROFIT SECTOR OF THE U.S. ECONOMY: A METHODOLOGICAL STATEMENT

United States input-output accounts identify and measure the interrelationships between the various industries in the United States economy. However, these accounts do not identify nonprofit activities from their for-profit counterparts in the service-producing sector. This paper, prepared by Gabriel Rudney and Paula Young, presents the methodology and summary data produced by disaggregating the service-producing industries to identify separately nonprofit activities.
The input-output accounts for 1977 produced in this study include 107 industries, but in this paper the results are summarized into 14 industries showing only nonprofit and for-profit components. The GNP and total outputs in this study are consistent with the revised input-output accounts for 1977 prepared by the U.S. Department of Commerce, Bureau of Economic Analysis.     

Natural resources and international labour mobility

We study the relationship between natural resource wealth and (skilled and unskilled) emigration. The source data for international migration rates come from Brücker, Capuano, and Marfouk (2013) and measures of resource wealth from the World Bank database. We find that natural resource abundance reduces skilled emigration regardless of countries’ natural wealth, but that natural resources reduce unskilled emigration only in resource-rich countries.     

SCREENING FOR A CHRONIC DISEASE: A MULTIPLE STAGE DURATION MODEL WITH PARTIAL OBSERVABILITY

We estimate a dynamic multistage duration model to investigate how early detection of diabetes can delay the onset of lower extremity complications and death. We allow for partial observability of the disease stage, unmeasured heterogeneity, and endogenous timing of diabetes screening. Timely diagnosis appears important. We evaluate the effectiveness of two potential policies to reduce the monetary costs of frequent screening in terms of lost longevity. Compared to the status quo, the more restrictive policy yields an implicit value for an additional year of life of about $50,000, whereas the less restrictive policy implies a value of about $120,000.     

Could immigration explain wage inequality in a skill-biased technological model?

The aim of this paper is to evaluate how immigration of high-skilled workers affects the technological-knowledge bias and, in turn, the skill premium in the host countries, in particular bearing in mind the recent experience in a number of European countries. We study a skill-biased dynamic general equilibrium R&D growth model in which the standard R&D technology is modified so wage inequality results from the direction of the technological knowledge, which in turn is induced by the price channel. By solving the transitional dynamics numerically, we show that the rise of the skill premium arises from the price-channel effect, complemented with a mechanism that reflects the impact of immigration on R&D. According to our quantitative results, our model is able to account for a significant proportion of the dynamics of the skill premium in the data for a number of European countries, thus, suggesting that differences in labour skills between immigrants and natives are, in practice, an important source of skill premium variation over time.     

Securitization and regulatory arbitrage within the ABCT framework

This paper discusses the consequences of securitization and how it links to the Austrian Business Cycle Theory (ABCT). The argument that securitization is behind fiduciary credit expansion preceding the 2008 crisis is incomplete. Consolidated balance sheet analysis demonstrates that securitization per se actually sterilizes the inflationary effect of previous fiduciary credits by transforming them into credits backed by voluntary savings. This sterilization stage is subsequently followed by new fiduciary credits issuance as securitization creates excess reserves and excess capital for banks. However, when securitization is used as a tool to implement arbitrage strategies of the Basel prudential rules, it enables banks to create more fiduciary credit while time preference remains unchanged. This creates the conditions for business cycle amplification.     

An investigation of the effects of exchange rate volatility on exports in East Asia

This study investigates the effects of the exchange rate volatility on the export flows of Indonesia, Malaysia, Republic of Korea, Singapore, Thailand, and the Philippines during 1974–2011. Towards this goal a trade weighted real effective (rather than the bilateral) exchange rate and three different measures of volatility, i.e. obtained from an ARCH model, a GARCH model and a moving-average standard deviation measure are used in this study. Specifically, the export flows between six Asian countries and the rest of the world are investigated rather than focusing on trade with only one country. Our findings reveal that the exchange rate volatility has a significant impact on export flows in the short run as well as in the long run for all the countries in the sample. The impact in the long run is predominantly negative with the exception of Singapore, but in the short run the impact varies across countries. Moreover, our results are robust to the alternative measures of volatility used and most of the findings in the long run and short run are also robust to the crisis period.