African-American economic progress in urban areas: a tale of 14 American cities

How significant was the economic progress of African-Americans in the U.S. between 1970 and 2000? In this paper we examine this issue for black men 25-55 years old who live in 14 large U.S. metropolitan areas. We present the evidence that significant racial disparities remain in education and labor market outcomes of black and white men. We discuss changes in industrial composition, migration, and demographic changes that might have contributed to the stagnation of economic progress of black men between 1970 and 2000. In addition, we show that there was no progress in a financial well-being of black children, relative to white children, between 1970 and 2000.African Americans - Economic conditions

Are We Understating the Impact of Economic Conditions on Welfare Rolls?

In this brief we argue that welfare participation is more sensitive to economic conditions than previously believed. Why? Prior research focused on short-term economic fluctuations and ignored differences between high- and low-skilled workers. As welfare is long-term (i.e., permanent) it makes more sense to make comparisons with long-term economic trends. Also, since low-skilled workers are more likely to end up on welfare, it is proper to focus on their economic opportunities. Thus, we focus on the long-term impact of economic conditions on welfare participation, and we concentrate our analysis on low-skilled workers. Specifically, we analyze long-term changes in the supply of high-paying jobs for coal and steel workers as they affect certain heavy coal- and steel-producing regions of the United States during the 1970s and 1980s. Our findings indicate that welfare participation in these regions closely mirrors the long-term local availability of high-paying jobs for low-skilled workers. This has serious policy implications for the long-term success of welfare reform.

Local price variation and labor supply behavior

In standard economic theory, labor supply decisions depend on the complete set of prices: wages and the prices of relevant consumption goods. Nonetheless, most theoretical and empirical work in labor supply studies ignore prices other than wages. We address the question of whether the common practice of ignoring local price variation in labor supply studies is as innocuous as generally assumed. We describe a simple model to demonstrate that the effects of wage and nonlabor income on labor supply typically differ by location. In particular, we show that the derivative of the labor supply with respect to nonlabor income is independent of price only when the labor supply takes a form based on an implausible separability condition. Empirical evidence demonstrates that the effect of price on labor supply is not a simple "up-or-down shift" that would be required to meet the separability condition in our key proposition.Labor supply ; Price levels

Are Children "Normal"?

We examine Becker's (1960) contention that children are "normal." For the cross section of non-Hispanic white married couples in the U.S., we show that when we restrict comparisons to similarly-educated women living in similarly-expensive locations, completed fertility is positively correlated with the husband's income. The empirical evidence is consistent with children being "normal." In an effort to show causal effects, we analyze the localized impact on fertility of the mid-1970s increase in world energy prices – an exogenous shock that substantially increased men's incomes in the Appalachian coal-mining region. Empirical evidence for that population indicates that fertility increases in men's income.economics of fertility, location choice, Appalachian fertility

Competing for a duopoly : international trade and tax competition

Oligopoly is empirically prevalent in the industries where MNEs operate and national governments compete with fiscal inducements for their FDI projects. Despite this, existing formal treatments of fiscal competition generally focus on the polar cases of perfect competition and monopoly. We consider the competition between two potential host governments to attract the investment of both firms in a duopolistic industry. Competition by identical countries for a monopoly firm's investment is known to result in a 'race to the bottom' where all rents are captured by the firm through subsidies. We demonstrate that with two firms, both are taxed in equilibrium, despite the explicit non-cooperation between governments. When countries differ in size, a single firm will be attracted to the larger market. We explore the conditions under which both firms in the duopoly co-locate and when each nation attracts a firm in equilibrium. Our results are consistent with the observed stability of effective corporate tax rates in the face of ongoing globalization, and our analysis readily generalizes to many specifications with oligopoly in the product markets

College Quality and the Wages of Young Men

Using the rich data from the National Longitudinal Survey of Youth, we show that several dimensions of college quality have substantial positive impacts on young men’s wages. This finding is robust to a wide array of alternative specifications. Controlling for ability reveals that sorting of more able persons into better colleges accounts for only a modest portion of the unconditional quality effect. We find that young black men reap larger gains to quality than do young white men. Our results also indicate that attending a college with a racially diverse student body increases the later earnings of both white and black men