Related link(s): http://www.richmondfed.org/publications/research/region_focus/2009/summer/around_the_fed_weblinks.cfmEconomics

Christina Zajicek

English

Research Papers in Economics

Summer 2009 • Region Focus 11
AROUNDTHEFED
Safety First?
BY CHRISTINA ZAJICEK
“Do Immigrants Work in Riskier Jobs?” Pia M. Orrenius and
Madeline Zavodny, Federal Reserve Bank of Dallas Working
Paper 0901, January 2009.
I
n general, past studies have found that non-native 
workers are not more likely than U.S.-born workers 
to hold jobs with dangerous conditions. In this paper, 
economists Pia Orrenius and Madeline Zavodny cite large
immigrant flows, a relative decline in immigrants’ skills, and
until recently a boom in building construction (a relatively
risky profession that employs considerable immigrant labor)
as contributing to a rise in hazardous working conditions 
for immigrants. The authors found an immigrant-native 
difference in average industry fatality rates of 1.79 deaths per
100,000 workers. Additionally, immigrant women tend to
work in environments with significantly higher injury rates
than native-born women, while immigrant men often work
in industries with higher fatality rates than native-born men. 
Poor English language skills are correlated with higher
injury and fatality rates. Immigrants also may face limited
employment options and, consequently, be more willing to
accept riskier occupations. The authors suggest that provid-
ing safety training in languages other than English and
illustrated safety guidelines may reduce the number of
injuries and deaths among immigrant workers.
“Geographic Variations in a Model of Physician Treatment
Choice with Social Interactions.” Mary A. Burke, Gary M.
Fournier, and Kislaya Prasad, Federal Reserve Bank of
Boston Working Paper 09-5, May 2009.
D
espite improvements in communication technology,
physician treatment choice tends to be relatively 
uniform within geographic regions, yet quite diverse across
regions, leading some observers to argue that national stan-
dards for care should be adopted. In this paper, economists
Mary Burke of the Boston Fed, Gary Fournier of Florida
State University, and Kislaya Prasad of the University of
Maryland argue that region-specific patterns of care result
from social interactions among physicians. 
Physicians may learn and acquire skills from their peers,
a phenomenon known as “knowledge spillover.” They may
also yield to “conformity pressure” and adhere to local prac-
tice norms. Standardization may be harmful if knowledge
spillovers are present because certain patients will be
deprived of gains from specialization. Conversely, under
conformity pressure, there is a tendency to over- or under-
utilize some treatments in certain geographic locations,
contributing to inefficient care and high costs. The authors
argue that their empirical work, using data from Florida 
hospitals, “suggest that knowledge spillovers, rather than
conformity effects, are the primary source of treatment 
variations in our data.” 
“Financial Visibility and the Decision to Go Private.” Hamid
Mehran and Stavros Peristiani, Federal Reserve Bank of New
York Staff Report No. 376, June 2009.
S
ince the mid-1990s, the number of public firms that
have delisted and gone private has increased sharply.
Hamid Mehran and Stavros Peristiani of the New York Fed
investigate the underlying causes of this trend.
Many factors must be considered in the decision to go
public or private. Publicly owned firms can access debt 
and equity markets more easily, a process facilitated by suffi-
cient analyst coverage. However, along with the benefit of
increased financial visibility, publicly traded firms also must
face the explicit and implicit costs of listing fees, disclosure,
and the threat of litigation. 
The authors argue that a driving force behind the deci-
sion of public firms to go private is a failure to attract a
critical mass of analyst coverage and investor interest. This
lack of financial visibility can create investor uncertainty and
may produce an illiquid stock susceptible to mispricing. 
At the same time, the company must bear increased regula-
tory costs and shareholder scrutiny. Therefore, “firms with
declining or smaller-than-anticipated analyst coverage,
falling institutional ownership, and low stock turnover
exhibit a substantially higher probability of going private.”
“How Will Unemployment Fare Following the Recession?”
Edward S. Knotek II and Stephen Terry, Federal Reserve
Bank of Kansas City Economic Review, Third Quarter 2009,
pp. 5-33.
T
raditionally, employment has rebounded quickly 
following a severe recession. Will that be the case this
time? Edward Knotek and Stephen Terry of the Kansas
City Fed argue that unemployment may remain relatively
high, even as the economy begins to show other signs of
recovery. Changes in the nature of layoffs and the rise of
just-in-time labor practices appear to have contributed to
“jobless recoveries” following the last two recessions and
may contribute to continued weak employment numbers
following the current downturn. In addition, this reces-
sion coincides with a banking crisis. International evidence
suggests that such episodes are associated with high and
persistent unemployment rates.  RF

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