LABOR ECONOMICS (LL+ACCESS)
8th Edition
ISBN: 9781264909339
Author: BORJAS
Publisher: MCG
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Chapter 4, Problem 5P
To determine
The importance of human capital externalities.
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The McCarren-Walter Act
adopted a nuanced immigration policy.
converted the quota-based immigration system into a system based on labor needs.
gave continuity to the quota-based immigration system.
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O decided to maintain the quota-based immigration system only in regard to European countries.
Immigration is a multi-faceted phenomenon, with the potential for both large-scale and industry- specific effects. Consider the following two effects of immigration that could occur in a specific market:
• More consumers are now in the market.
• The price of labor goes down due to increased competition in the labor market.
Focusing only on these two effects, what would we expect to happen to prices and quantities in this market? Note labor is used as an input in all industries.
a. Prices will decrease, but quantities could increase, decrease, or stay the same.
b. Prices will increase, but quantities could increase, decrease, or stay the same.
c. Quantities will decrease, but prices could increase, decrease, or stay the same.
d. Quantities will increase, but prices could increase, decrease, or stay the same.
The statements relate to immigration or inequity as it relates to immigration. Identify each statement as either true or false.
Statement 1: Countries with even slightly higher standards of living should expect an influx of immigration from their neighboring countries if those countries have a lower standard of living. Statement 2: There is empirical evidence that immigration leads to large increases in unemployment, which causes wages to drop drastically. Statement 3: As a potential solution to an influx of immigration, Case, Fair, and Oster (2012) cite a study by the International Monetary Fund (IMF) stating that free trade can help to reduce inequity, thereby reducing the need for immigration. Statement 4: Immigration is a local, city‑wide concern as opposed to being a national, country‑wide concern because immigrants stay in the city where they first arrive. Statement 5: Technological change will not cause low‑skilled workers to immigrate to another country with a higher…
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LABOR ECONOMICS (LL+ACCESS)
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