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We estimate the effects of technology investments on the demand for skilled workers using longitudinally integrated employer-employee data from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics Program infrastructure files spanning two Economic Censuses (1992 and 1997). We estimate the distribution of human capital and its observable and unobservable components within each business for each year from 1992 to 1997. We measure technology using variables from the Annual Survey of Manufactures and the Business Expenditures Survey (services, wholesale and retail trade), both administered during the 1992 Economic Census. Static and partial adjustment models are fit. There is a strong positive empirical relationship between advanced technology and skill in a cross-sectional analysis of businesses in both sectors. The more comprehensive measures of skill reveal that advanced technology interacts with each component of skill quite differently: firms that use advanced technology are more likely to use high-ability workers, but less likely to use high-experience workers. These results hold even when we control for unobservable heterogeneity by means of a selection correction and by using a partial adjustment specification.

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This paper identifies the types of immigrants that Canada has recruited to foster modern Canadian economic development and assesses how effective Canada has been in recruiting and retaining these required immigrants in the 21st century. Evidence from both ‘balance of trade’ and ‘balance of payments’ exercises indicates that it is difficult to determine if there actually exist positive net inflows of managers and professionals during the 1982-2001 period. The entry of these highly skilled immigrants resulted from a series of distinct labour market policies adopted by Citizenship and Immigration Canada and its predecessor agencies. The paper presents evidence to support that between 1976-1990 a ‘tap on-tap off’ policy admitted skilled immigrants to Canada only if a labour vacancy was anticipated. However, after 1990 tests reveal that the previous year’s economic immigrant admissions determined the contemporary immigrant flows with a 10 month lag. Offsetting this robust admission of economic immigrants in the 1990s was the substantial outflows of previous Canadian immigrants as part of the rising phenomenon of ‘brain circulation’. Of particular note is the large number of highly skilled Chinese who have returned to Hong-Kong after 1997. Given this ‘brain circulation’ and the chronic underutilization of its highly trained immigrants I conclude that Canada’s traditional use of immigrants as an ‘engine of growth’ is very limited in the 21st century and suggest recruitment of foreign graduate students to revitalize the role of immigrants in Canadian development.

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We develop a simple search equilibrium model of workplace training and education based on two features. First, investment in education improves job-related learning skills and reduces training costs burdened by firms. Second, firms with vacant skilled job slots can choose between recruitment from the market and training. Compared to Germany and Japan, the US [United States] has both a higher inflow rate into unemployment and a higher efficiency of the matching process. While the combined effort of these differences on the share of educated labour is ambiguous, the effect on the percentage of firms undertaking workplace training is to unambiguously reduce it.

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This article applies recent advances in productivity and efficiency measurement to the evaluation of skill-biased technical change. Using the general index approach we are able to establish an explicit and unconstrained time path for non-neutral technical change between production and non-production labour in US manufacturing industries over the 1959-1996 period. Our findings confirm the prevailing interpretation in the labour economics literature that substantial reductions in the relative share of production labour are attributable to a sustained period of non-neutral technical change. However, we find that skill-biased technical change effects are most evident prior to 1983. This pre-dates the diffusion of personal computer technologies in the workplace and the dramatic wage structure changes associated with the 1980s. In contrast to prevailing alternatives, the general index approach also permits us to explain observed shifts in relative labour demand as a combination of price-induced substitution, non-homothetic output effects and skill-biased technical change responses to a range of proposed elements.

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This paper provides both a theoretical and an empirical investigation into the impact of job skill types on the black/white pay differentials. The theoretical analysis derives that the more intensively ‘soft’/’hard’ skills are used in an occupation, the greater/smaller the black/white pay differential is there in that occupation. Moreover, in response to the differential pay gaps across jobs requiring different levels of ‘soft’/’hard’ skills, blacks are more likely to self-select themselves into the jobs that use ‘hard’ skills more intensively, ceteris paribus. Using NLSY [National Longitudinal Survey of Youth] data, we find consistent empirical evidence to our theoretical predictions. Hence, the paper bridges the existing literature on racial pay gaps and cognitive vs. non-cognitive skills by explicitly testing the impact of job skill types on racial pay gaps.

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This paper reviews four decades of economics research on the brain drain, with a focus on recent contributions and on development issues. We first assess the magnitude, intensity and determinants of the brain drain, showing that brain drain (or high-skill) migration is becoming the dominant pattern of international migration and a major aspect of globalization. We then use a stylized growth model to analyze the various channels through which a brain drain affects the sending countries and review the evidence on these channels. The recent empirical literature shows that high-skill emigration need not deplete a country's human capital stock and can generate positive network externalities. Three case studies are also considered: the African medical brain drain, the recent exodus of European scientists to the United States, and the role of the Indian diaspora in the development of India's IT sector. We conclude with a discussion of the implications of the analysis for education, immigration, and international taxation policies in a global context.

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The paper links finance theory to labor economics and political economy in the context of migration and immigration policy. Most research treating the impact of immigration has focused on the consequences for employees as measured by wages, earnings, and employment. Less is known about the impact on employers. We lack answers to basic questions concerning the quantitative impact of immigrants on employer profit, and which employers are most likely to gain (suffer) increased (reduced) profits as a result of immigration. Using event study analysis, I measure the impact of immigration policy on the profit of employers and shareholders, particularly in those industries with high needs for skilled immigrants. The American Competitiveness and Workforce Improvement Act (ACWIA) of 1998 nearly doubled the available number of H-1B visas for skilled foreign workers in [financial year] FY 1999. It was the first time that the U.S. government raised the annual cap of H-1B visa since 1990. I focus on this bill and analyze whether and by how much its passage increased shareholders' profit. The empirical results show that employers and shareholders in the top H-1B visa user industries enjoyed significant and positive returns with the passage of the ACWIA of 1998. Shareholders in high-tech industries (the top users of H-1B visa, 80 per cent of total) such as 'Computers and related equipment', and 'Computer and data processing services' gained, respectively, an average 21.54 per cent (15.88 if weighted) and 22.77 per cent (18.11 if weighted) in cumulative excess returns in the month after the Act was passed, while industries with little need for H-1B visas experienced no significant changes in cumulative excess returns. Robustness testing including international factor comparisons, semi-parametric modeling and a sample-split Chow structural break test support the results.

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A great deal of attention has been paid in the literature to estimating the impacts of training programs. Much less attention has been devoted to how training agencies assign participants to training programs, and to how these allocation decisions vary with agency resources, the initial skill levels of participants and the prevailing labor market conditions. This paper models the training assignment problem faced by welfare agencies, deriving empirical implications regarding aggregate training policies and testing these implications using data from Welfare-to-Work training programs run by California counties during the 1990s. I find that county welfare agencies do not seem to follow a simple returns-maximization model in their training assignment decisions. The results show that, as suggested by political economy models, the local political environment has a strong effect on training policies. In particular, I find that going from a Republican to a Democratic majority in a county's Board of Supervisors has a strong effect on training policies, significantly increasing the proportion of welfare recipients receiving human capital development training.

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Over the last several decades, two of the most significant developments in the US labor market have been: (1) rising inequality; and (2) growth in both the size and the diversity of immigration flows. Because a large share of new immigrants arrive with very low levels of schooling, English proficiency, and other skills that have become increasingly important determinants of success in the US labor market, an obvious concern is that such immigrants are a poor fit for the restructured American economy. In this chapter, we evaluate this concern by discussing evidence for the United States on three relevant topics: the labor market integration of immigrants, the socioeconomic attainment of the US-born descendants of immigrants, and the impact of immigration on the wages and employment opportunities of native workers. We show that low-skilled immigrants have little trouble finding paid employment and that the wages they earn are commensurate with their skills. Overall, the US-born second generation has achieved economic parity with mainstream society; for some Hispanic groups, however, this is not the case. Finally, we survey the pertinent academic literature and conclude that, on the whole, immigration to the United States has not had large adverse consequences for the labor market opportunities of native workers.

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This paper analyses the impact of formal training on worker mobility. Using data from the Swiss Labour Force Survey, we find that on-the-job search activities and, to a smaller extent, actual job separations are significantly affected by both employer-provided and general training. Moreover, while the separation probability of searching workers is strongly affected by previous firm-provided training, no such effect shows up for non-searchers. This is consistent with the hypothesis that workers bear most of the cost of specific training.

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