Reinterpreting the performance of immigrant wages from panel data

Immigrants differ from the native born in terms of unobserved factors, such as motivation, and observed factors, including those related to the interruption of labour market activity and earning capacity, which may bias estimates of immigrant integration. Using panel data from the Survey of Labour and Income Dynamics, we show that using potential experience, rather than actual experience, exaggerates estimates of the disruption and recovery caused by immigration. More importantly, we find support for omitted variables bias, arising from unobserved fixed effects. Instrumental variable estimates for both pooled and separate samples of immigrant and native born men demonstrate a wage disadvantage for immigrants upon entry that persists through their lifetime. Standard estimates of a modest wage advantage for the children of immigrants also suffer from omitted variables bias arising from unobservables. Contrary to most of the literature to date, our instrumental variable estimates which allow for unobservable fixed effects suggest that immigrants never catch up to otherwise comparable native born workers, but their children do just as well. We would like to thank Statistics Canada for permitting access to the data and solving associated technical problems, the Prairier Centre for Research on Immigration and Integration for financial assistance, and Peter Schnabl for excellent research assistance. An earlier version of this paper was presented to the 10th International Conference on Panel Data in Berlin, July 5–6, 2002. The authors take sole responsibility for errors, omissions and interpretation of the data.     

Designing high commitment — high performance organizations

In this paper the author suggests a number of reasons why in recent years there appears to have been a shift in thinking away from traditional bureaucratic-scientific forms of organization to alternative types of organizational design. In most cases, that thinking has yet to be translated into practial action. Experiments in organizational design are taking place but progress appears to be hindered by the lack of a sufficiently well understood design theory, a clearly existing model to emulate, and not least by a failure to know how we get from “where we are” to “where we want to be”. The author describes some of the basic characteristics of what have been called “high commitment—high performance” organizations, and concludes by offering a step-model towards the creation of such an organization.     

Pricing-to-market tests in instrumental regressions: Case of the transportation equipment industry

Pricing-to-market (PTM) theory suggests that exporting monopolistic firms adjust their destination-specific mark-ups in the face of exchange rate shocks. A large proportion of the existing evidence for PTM comes from Wald tests applied to OLS- and IV-estimated parameters of single-equation models. Such tests can seriously over-reject in the presence of endogeneity and weak instruments so that some of the available results supporting PTM could be spurious. In this paper we revisit the PTM evidence for Japanese and German exporting firms in the transportation equipment industry. Using the model of Marston (1990), we apply exogeneity and LR-LIML-based tests for which the error probability is controlled irrespective of the quality of the available instruments. Our results show right-hand-side endogeneity in almost all of the examined PTM equations. In addition, we find that statistical decisions often differ depending on whether they are based on the traditional Wald test or on our proposed test.The authors would like to thank Philippe Barla, Jean-Thomas Bernard, Christos Constantatos, Larry Schembri, seminar participants at the Bank of Canada, and two anonymous referees for useful comments and suggestions. Thanks also to Richard Marston for providing data. Finally, a special thanks to Marjorie Santos for excellent research assistance. All remaining errors are our own and should not be attributed to the Bank of Canada.First version received: May 2002/Final version received: December 2002     

Problems of Incentives for Employees in the Quality Management of the Service Sector

The paper presented below concentrate on worker’s motivation problems in quality management of the services sector. The problem with motivation is particularly important in management of services. In our publication, we analyze motivation system in McDonald’s restaurants form quality of services point of view.     

Network externalities and long-run market shares

We study a dynamic duopoly model with network externalities. The value of the product depends on the current and past network size. We compare the market outcome to a planner. With equal quality products, the market outcome may result in too little standardization (i.e. too many products active in the long run) but never too much. The potential inefficiency is non-monotonic in the strength of the network effect, being most likely for intermediate levels. When products differ in quality, an inferior product may dominate even when the planner would choose otherwise, but only if the discount factor is sufficiently large     

Toward a Phylogenetic Reconstruction of Organizational Life

Synopsis Classification is an important activity that facilitates theory development in many academic disciplines. Scholars in fields such as organizational science, management science and economics and have long recognized that classification offers an approach for ordering and understanding the diversity of organizational taxa (groups of one or more similar organizational entities). However, even the most prominent organizational classifications have limited utility, as they tend to be shaped by a specific research bias, inadequate units of analysis and a standard neoclassical economic view that does not naturally accommodate the disequilibrium dynamics of modern competition. The result is a relatively large number of individual and unconnected organizational classifications, which tend to ignore the processes of change responsible for organizational diversity. Collectively they fail to provide any sort of universal system for ordering, compiling and presenting knowledge on organizational diversity. This paper has two purposes. First, it reviews the general status of the major theoretical approaches to biological and organizational classification and compares the methods and resulting classifications derived from each approach. Definitions of key terms and a discussion on the three principal schools of biological classification (evolutionary systematics, phenetics and cladistics) are included in this review. Second, this paper aims to encourage critical thinking and debate about the use of the cladistic classification approach for inferring and representing the historical relationships underpinning organizational diversity. This involves examining the feasibility of applying the logic of common ancestry to populations of organizations. Consequently, this paper is exploratory and preparatory in style, with illustrations and assertions concerning the study and classification of organizational diversity.     

On the hellwig method of feasible portfolio construction

The work feasible portfolio is built into the work, that is, the k-dimensional Q column vector with components q_i where q_i 0 for i=1,...,k and q₁+...+q_k=1. We define i=1,...,k in the following way:

Urban Geographies of Hesitant Transition: Tracing Socioeconomic Segregation in Post‐Ceauşescu Bucharest

Scholars have raised concerns about the social costs of the transition from state socialism to capitalism in Central and Eastern Europe, and geographers are particularly interested in the spatial expressions and implications of these costs, including apparently increasing residential segregation. Applying a range of segregation measures to 1992 and 2002 census data, this contribution studies socio‐occupational residential segregation in Bucharest. The conclusion is that Bucharest was relatively socio‐spatially mixed at both times; in fact, a modest, yet fully legible, decreasing overall trend is observable. This is at odds with many popular assumptions of the past 20 years.     

The Oaxaca–Blinder Unexplained Component as a Treatment Effects Estimator

In this paper I use the National Supported Work (NSW) data to examine the finite‐sample performance of the Oaxaca–Blinder unexplained component as an estimator of the population average treatment effect on the treated (PATT). Precisely, I follow sample and variable selections from Dehejia and Wahba (1999), and conclude that Oaxaca–Blinder performs better than any of the estimators in this influential paper, provided that overlap is imposed. As a robustness check, I consider alternative sample (Smith and Todd, 2005) and variable (Abadie and Imbens, 2011) selections, and present a simulation study which is also based on the NSW data.     

The Small Border Traffic Zone between Poland and Kaliningrad Region (Russia): The Impact of a Local Visa-Free Border Regime

After Poland’s accession to the EU, the Polish-Russian border became the EU external border. This significantly changed its nature and started the new type of cross border relation. Since 2012, when the Small Border Traffic (SBT) zone came into force, the border has changed its blockade function and started instead to be treated as a resource. The fundamental loosening of the border crossing regime reduced the social and functional distance between Poland and Kaliningrad, and in a broader sense between EU and Kaliningrad. This paper will try to show how small but meaningful initiative, the SBT, has had an impact on cross-border region. The present paper will describe the relationship between larger geopolitical actors and how they affect local border relations. The aim of this paper is to present phenomenon of new visa regime at the Polish-Russian border. The paper likewise describes the impact of the SBT on local communities and their economies, as well as national relations between adjacent countries. The analysis is based on the interviews and surveys conducted in the Polish-Russian border region in late 2014.