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This paper presents a new approach for estimating the labor market impact of immigration. The existing studies typically exploit the geographic clustering of immigrants and use differences across local labor markets to identify the impact. This approach has not been successful because it ignores the strong currents that tend to equalize economic conditions(More)
The potential for rare economic disasters explains a lot of asset-pricing puzzles. I calibrate disaster probabilities from the twentieth century global history, especially the sharp contractions associated with World War I, the Great Depression, and World War II. The puzzles that can be explained include the high equity premium, low risk-free rate, and(More)
This paper develops and estimates an overlapping generations general equilibrium model of labor earnings, skill formation, and physical capital accumulation with heterogenous human capital. The model analyzes both schooling choices and post-school on-the-job investment in skills in a framework in which different schooling levels index different skills. A(More)
numerous seminar participants, three astute referees and the Editors of this journal for numerous insightful suggestions. We thank Hung-Abstract Between 1984 and 2001, the share of non-elderly adults receiving Social Security Disability Insurance income (DI) rose by 60 percent to 5.3 million beneficiaries. Rapid program growth despite improving aggregate(More)
Research results and conclusions expressed are those of the author and do not necessarily indicate concurrence by the Bureau of the Census or the Center for Economic Studies. This paper has been screened to ensure that no confidential data are revealed. Abstract Tremendous differences in producer productivity levels exist, even within narrowly defined(More)
In 1987 the federal government permitted states to raise the speed limit on their rural interstate roads, but not on their urban interstate roads, from 55 mph to 65 mph for the first time in over a decade. Since the states that adopted the higher speed limit must have valued the travel hours they saved more than the fatalities incurred, this experiment(More)
We explore steady-state inequality in an intergenerational model with altruistically linked individuals who experience privately observed taste shocks. When the welfare function depends only on the initial generation , efficiency requires immiseration: inequality grows without bound and everyone's consumption converges to zero. We study other efficient(More)
This paper studies multi-line pricing and capital allocation by insurance companies when solvency matters to consumers, capital is costly to hold, and the average loss is uncertain. In this environment, product quality concerns lead firms to diversify across markets and charge high prices for risk that threatens company solvency, even if the risk is(More)