Institute for the Study of Labor

About: Institute for the Study of Labor is a nonprofit organization based out in Bonn, Germany. It is known for research contribution in the topics: Wage & Unemployment. The organization has 2039 authors who have published 13475 publications receiving 439376 citations.

Behavioral Economics as Applied to Firms: A Primer

Abstract: We discuss the literatures on behavioral economics, bounded rationality and experimental economics as they apply to firm behaviour in markets. Topics discussed include the impact of imitative and satisficing behavior by firms, outcomes when managers care about their position relative to peers, the benefits of employing managers whose objective diverges from profit-maximization (including managers who are overconfident or base pricing decisions on sunk costs), the impact of social preferences on the ability to collude, and the incentive for profit-maximizing firms to mimic irrational behavior.

Quantifying International Migration: A Database of Bilateral Migrant Stocks

Abstract: This paper introduces four versions of an international bilateral migration stock database for 226 by 226 countries and territories. The first three versions each consist of two matrices, the first containing migrants defined by country of birth, that is, the foreign-born population; the second, by nationality, that is, the foreign population. Wherever possible, the information is collected from the 2000 round of censuses, though older data are included where this information was unavailable. The first version of the matrices contains as much data as could be collated at the time of writing but also contains gaps. The later versions progressively use a variety of techniques to estimate the missing data. The final matrix, comprising only the foreign-born, attempts to reconcile all of the available information to provide the researcher with a single and complete matrix of international bilateral migrant stocks. The final section of the paper describes some of the patterns evident in the database. For example, immigration to the United States is dominated by Latin America, whereas Western European immigration draws heavily on Eastern Europe, Central Asia, and the Mediterranean region. Over one-third of world migration is from developing to industrial countries and about a quarter between developing countries. Intra-developed country and intra-FSU (former Soviet Union) flows each account for about 15 percent of the total. Over half of migration is between countries with linguistic ties. Africa accounts for 8 percent of Western Europe's immigration and much less of that to other rich regions.

A Simple, Analytically Solvable Chamberlinian Agglomeration Model

Abstract: This paper presents a simple, analytically solvable Chamberlinian agglomeration model. As in the canonical core-periphery (CP) model, two agglomerative forces are at work. However, the present model exhibits a 'pitchfork bifurcation' rather than the 'tomahawk bifurcation' of the CP model.

Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector

Abstract: This paper proposes a new mechanism linking trade and wage inequality in developing countries - the quality-upgrading mechanism - and investigates its empirical implications in panel data on Mexican manufacturing plants. In a model with heterogeneous plants and quality-differentiated goods, only the most productive plants in a country like Mexico enter the export market, they produce higher-quality goods to appeal to richer Northern consumers, and they pay high wages to attract and motivate a high-quality workforce. An exchange-rate devaluation leads initially more-productive, higher-wage plants to increase exports, upgrade quality, and raise wages relative to initially less-productive, lower-wage plants within each industry. Using the late-1994 peso crisis as a source of variation and a variety of proxies for plant productivity, I find that initially more-productive plants increased the export share of sales, white-collar wages, blue-collar wages, the relative wage of white-collar workers, and ISO 9000 certification more than initially less-productive plants during the peso crisis period, and that these differential changes were greater than in periods without devaluations before and after the crisis period. A factor-analytic strategy that relies more heavily on the theoretical structure and avoids the need to construct proxies finds similar results. These findings support the hypothesis that differential quality upgrading induced by the exchange rate shock tended to increase within-industry wage inequality.

Brother Correlations in Earnings in Denmark, Finland, Norway and Sweden Compared to the United States

Abstract: The correlation in economic status among siblings is a useful "omnibus measure" of the overall impact of family and community factors on adult economic status In this study we compare brother correlations in long-run (permanent) earnings between the United States, on one hand, and the Nordic countries (Denmark, Finland, Norway and Sweden) on the other Our base case results, based on very similar sample criteria and definitions for all countries, show that this correlation is above 040 in the United States and in the range 015-028 in the Nordic countries Even though these results turn out to be somewhat sensitive to some assumptions that have to be made, we conclude that the family and community factors are more important determinants of long-run earnings in the United States than in the Nordic countries