Access to Banking Services and Money Transfers by Mexican Immigrants

Increased access to the U.S. financial system through banks’ recognition of the ‘matrícula consular’ identification card may encourage Mexican immigrants to save and transfer more money home. Using data from the Mexican Migration Project, we examine whether immigrants with bank accounts in the U.S. between 1970 and 2002 sent more funds to Mexico than their unbanked counterparts. While having a U.S. bank account does not raise monthly remittances by Mexican immigrants, it boosts the amount brought back home by more than $6000 per trip. These findings suggest that increased usage of banks by immigrants may enhance future flows of funds to Mexico.

The Effects of State Policy Design Features on Take Up and Crowd Out Rates for the State Children’s Health Insurance Program

We evaluate the effects of state policy design features on SCHIP take up rates and on the degree to which SCHIP benefits crowd out private benefits. The results indicate that overall program take up rates range from 10.1 to 10.5 percent. However, there is considerable heterogeneity across states, suggesting a potential role of inter-state variation in policy design. We find that several design mechanisms have significant and substantial positive effects on take up. For example, eliminating asset tests, offering continuous coverage, simplifying the application and renewal processes, and extending benefits to parents all have sizable and positive effects on take-up rates. Mandatory waiting periods, on the other hand, consistently reduce take-up rates. In all, inter-state differences in outreach and anti-crowd out efforts explain roughly one quarter of the cross-state variation in take-up rates. Concerning the crowding out of private health insurance benefits, we find that between one quarter and one third of the increase in public health insurance coverage for SCHIP eligible children is offset by a decline in private health coverage. We find little evidence that the policy-induced variation in take-up is associated with a significant degree of crowd-out, and no evidence that the negative effect on private coverage caused by state policy choices is any greater than the overall crowding out effect. This suggests that states are not augmenting take-up rates by enrolling children that are relatively more likely to have private health insurance benefits.State Children’s Health Insurance Program (SCHIP), Crowd Out, Take Up

The Impact of Amnesty on Labor Market Outcomes: A Panel Study Using the Legalized Population Survey

This paper tests whether amnesty, a provision of the 1986 Immigration Reform and Control Act (IRCA), affected the labor market outcomes of the legalized population. Using the Legalized Population Survey (LPS) and the National Longitudinal Survey of Youth (NLSY79) from 1987-1992, a quasi-experimental framework is developed to assess the differential impact of amnesty on the legalized population relative to a comparison group. After the implementation of the amnesty program, employment fell and unemployment rose for newly legalized men relative to the comparison group of already legal U.S. residents. For women, employment also fell and transitions out of the workforce increased among the newly legalized population. Increasing returns to skill, as captured by English proficiency, only played an important role in explaining the employment of newly legalized women. Finally, newly legalized men and women enjoyed higher wage growth rates than their working native counterparts, perhaps owing to their comparatively growing returns to U.S. educational attainment over this period.

The Impact of Amnesty on Labor Market Outcomes: A Panel Study Using the Legalized Population Survey

This paper tests whether amnesty, a provision of the 1986 Immigration Reform and Control Act (IRCA), affected the labor market outcomes of the legalized population. Using the Legalized Population Survey (LPS) and the National Longitudinal Survey of Youth (NLSY79) from 1987-1992, a quasi-experimental framework is developed to assess the differential impact of amnesty on the legalized population relative to a comparison group. After the implementation of the amnesty program, employment fell and unemployment rose for newly legalized men relative to the comparison group of already legal U.S. residents. For women, employment also fell and transitions out of the workforce increased among the newly legalized population. Increasing returns to skill, as captured by English proficiency, only played an important role in explaining the employment of newly legalized women. Finally, newly legalized men and women enjoyed higher wage growth rates than their working native counterparts, perhaps owing to their comparatively growing returns to U.S. educational attainment over this period.amnesty, legalization, labor market, Legalized Population Survey

The Role of Contingent Work in the War Against Poverty

The 1990s witnessed the success of the work-based welfare reform initiated with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act in reducing welfare caseloads. While welfare reform was effective in lowering immediate welfare dependency, researchers have questioned its long-run success in alleviating poverty partially due to the precariousness surrounding the jobs held by welfare leavers. This paper addresses this concern by examining (1) the likelihood of taking a contingent job given one’s welfare dependency and past poverty status; (2) the probability of being on welfare for different types of contingent workers relative to their non-contingent counterparts; and (3) the likelihood of living in poverty in the near future as a function of past employment in alternative types of contingent jobs.

Who pays the price when housing bubbles burst? Evidence from the American Community Survey

There has been much debate in recent years about whether the Federal Reserve should have taken action against the housing-price bubble as it was forming. One argument in favor of using monetary policy to offset asset-price bubbles is that it may be impossible after the bubble bursts to ease policy hard enough or fast enough to offset a strong contraction. While the fall in housing prices since 2006 has clearly increased unemployment and depressed growth, much less is known about how the costs have been distributed across households of different means. This paper uses data from the Census Bureau's annual American Community Survey (ACS) to examine this question. We first lay out the mechanisms via which a housing-market bust would be expected to affect households, in terms of incomes, employment, assets, and ability to service debt. We then use the ACS data to analyze how the house-price bust has affected households with different characteristics, differentiating between communities in which home prices did and did not boom and bust. Our results suggest that costs of the bubble have tended to fall on households less able to endure periods of financial distress. This lends further support to the argument that monetary policy oriented to social welfare should tackle bubbles ex ante rather than ex post.

Technology, Capital Spending, and Capacity Utilization

Capacity utilization has been a valuable indicator of inflationary pressure. Yet recent technological changes have made relationships between inputs and outputs more flexible, possibly eroding the predictive value of the utilization rate. This paper shows that, conceptually, technological change could either lower average utilization by making it cheaper to hold excess capacity, or raise utilization by making further changes in capacity less costly. Using data on 111 manufacturing industries from 1974 to 2000, we find that, for the average industry, technological change has had a modest but appreciable effect, shaving 0.2 to 2.3 percentage points off the utilization rate.

On the Road to Self-Sufficiency after Welfare Reform: An Assessment of the Impact of Changes in Welfare Asset Limits on Auto- Ownership Rates and Employment

In this paper, we assess the impact of the easing of vehicle exemption limits and asset restrictions after the passage of welfare reform legislation on the rates of car-ownership observed among female headed households with children. Prior to the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996, nearly all states exempted only $1,500 of vehicle equity from the minimum assets test and assets were limited to$1000 in most states. Post-welfare reform, however, nearly all states increased the vehicle exemption limit, with twenty-five states exempting the entire value of a single vehicle. In addition, the overall asset test rose in most states. In this paper, we use micro-level data from the 1993 and 1996 panels of the Survey of Income and Program Participation (SIPP) from the years 1994 to 1999 to examine 1) how changes in state-level welfare rules over this time period affected auto ownership rates among those most likely at risk of receiving welfare and 2) how the resulting change in auto ownership rates affected the probability of being employed for these individuals. To identify the effect of the redefined benefit eligibility rules on auto-ownership rates, we exploit inter-state differences and changes over time in welfare eligibility rules. Once we control for individual level demographics and state-level economic conditions, our results suggest that the probability of owning a car is greater for those who reside in states with higher overall asset limits and in states with exemptions for multiple vehicles. When we look at the sample of female heads with children relative to a control group of male and female household heads without children, we also find that assessing the value of the vehicle on an equity basis (rather than fair market basis) is associated with higher rates of car ownership. Using a two stage least squares approach (2SLS) that instruments car ownership with benefit eligibility rules, we find some evidence that asset-related rules have an effect on employment outcomes via car ownership. Thus, our results shed light on the role of the changes to eligibility rules on the transition from welfare to work.

Updating an ODA policy in Canada: the Role of Global Remittances in Development

The federal government has pledged to update Canada's development assistance (ODA) policy and this paper examines the important role of remittances in the development program. Remittances can serve as a significant form of cross-border capital flows and can have sizable effects on both the sending and receiving countries. This policy piece provides an overview of trends in global remittances and gives a context for the policy discussion on the relationship between remittances and ODA. The paper draws from the authors’ expertise and presents a background on the primary reasons behind global remittances and their impacts on other countries including the United States, Mexico, Nepal and Kenya. Within the context of Canada, the paper also examines how remittances have been able to complement and possibly drive other development reform efforts domestically and abroad.  The goal of the analysis is to help inform the policy discussion in Canada and concludes with a set of policy recommendations for the Canadian federal government

Updating an ODA Policy in Canada: The Role of Global Remittances in Development

The federal government has pledged to update Canada's development assistance (ODA) policy and this paper examines the important role of remittances in the development program. Remittances can serve as a significant form of cross-border capital flows and can have sizable effects on both the sending and receiving countries. This policy piece provides an overview of trends in global remittances and gives a context for the policy discussion on the relationship between remittances and ODA. The paper draws from the authors’ expertise and presents a background on the primary reasons behind global remittances and their impacts on other countries including the United States, Mexico, Nepal and Kenya. Within the context of Canada, the paper also examines how remittances have been able to complement and possibly drive other development reform efforts domestically and abroad. The goal of the analysis is to help inform the policy discussion in Canada and concludes with a set of policy recommendations for the Canadian federal government