In this paper, we quantify the effects of the Earned Income Tax Credit (EITC) from a macroeconomic perspective. We use an incomplete markets model to analyze jointly the labor supply and saving responses to changes in tax credit generosity and their aggregate and distributional implications. In line with existing literature, our results show that the EITC is an effective policy instrument to ra...

Union membership displayed a ∩-shaped pattern over the 20th century, while the distribution of income sketched a U. A model of unions is developed to analyze these phenomena. There is a distribution of firms in the economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a costly process. A union decides how many firms to organize and its members’ wage rate. Simulation of ...

In this paper, using a production framework in which skilled and unskilled labor are imperfect substitutes, I analyze the time paths of the efficiencies of skilled and unskilled labor and their implications for economic growth and wage inequality in the US between 1950 and 2005. There are two main findings. First, I find that skilled labor efficiency has grown more slowly since the mid 1970s. S...

STUDY OBJECTIVE To study differences in total life expectancy and in occupationally active life expectancy in relation to social class and marital status in men classified as healthy as young adults. DESIGN Historical cohort study. SETTING Finland. PARTICIPANTS Altogether 1662 men classified as completely healthy at the time of induction to military service (mean birth year 1923), who had...

This study analyzes the impacts of further tariff reductions resulting from proliferation regional trade agreements on wage inequality between skilled and unskilled workers in Chile 2000s. I match panel data industry-level effective rates other industry variables calculated plant-level microdata to pooled individual cross-section national household surveys at level. Based this unique set, estim...

Migration and pollution are two defining features of China's impressive growth performance over the last 30 years. In this paper we study migration response to in Chinese cities, its consequences for productivity welfare. We document a robust pattern which skilled workers emigrate more than unskilled. Their greater sensitivity air quality holds up cross-sectional variation across panel with ind...

This paper reviews some puzzling economic aspects of globalization and argues that they cannot be satisfactorily addressed in perfectly or monopolistically competitive models. Drawing on recent work, a model of oligopoly in general equilibrium is sketched. The model ensures theoretical consistency by assuming that firms are large in their own markets but small in the economy as a whole, and ens...

Opportunities for skilled and unskilled workers in the UK diverged over the last quarter of the twentieth century. We develop an empirical framework consistent with these trends that highlights the importance of skill heterogeneity in both wage setting and labour demand in explaining aggregate labour market outcomes. The framework enables us to quantify the macroeconomic effects of shocks that ...

This paper studies the effects of unemployment policies in a simple static general equilibrium model with adverse selection in the labor market. Firms offer a contract that induces the selfselection of workers. In equilibrium, all unskilled workers are screened out and some skilled workers are rationed out. It is shown that the provision of unemployment insurance (UI) raises involuntary unemplo...