Doctors with borders: occupational licensing as an implicit barrier to high skill migration

Research on the political economy of immigration overlooks the specificity of human capital in skilled occupations and its implications for immigration preferences and policymaking. Conclusions that skilled Americans are unconcerned about labor market competition from skilled migrants build on a simple dichotomy between high and low skill migrants. In this article we show that natives turn to occupational licensing regulations as occupation-specific protectionist barriers to skilled migrant labor competition. In practice, high skill natives face labor market competition only from those high-skill migrants who share their occupation-specific skills. Licensure regulations ostensibly serve the public interest by certifying competence, but they can simultaneously be formidable barriers to entry by skilled migrants. From a collective action perspective, skilled natives can more easily secure sub-national, occupation-specific policies than influence national immigration policy. We exploit the unique structure of the American medical profession that allows us to distinguish between public interest and protectionist motives for migrant physician licensure regulations. We show that over the 1973–2010 period states with greater physician control over licensure requirements imposed more stringent requirements for migrant physician licensure and, as a consequence, received fewer new migrant physicians. By our estimates over a third of all US states could reduce their physician shortages by at least 10 percent within 5 years just by equalizing migrant and native licensure requirements. This article advances research on the political economy of immigration and highlights an overlooked dimension of international economic integration: regulatory rent-seeking as a barrier to the cross-national mobility of human capital, and the public policy implications of such barriers.     

Interstate Banking: Current Status and Unfinished Agendas

In 1986, most of the centuries-old barriers against interstatebranch banking fell. By the end of the year, thirty-seven stateshad passed legislation authorizing some form of interstate branchbanking. Moreover, two federal judicial decisions had clearedthe way for interstate banking by restricting state regulatoryauthority over interstate branch banking when it is conductedeither through a shared-use automatic teller machine or by a"nonbank bank." These developments have dramatically changedthe nature of the business of banking, creating an entirelynew legislative agenda for states. High on the list of the itemsthat states must now consider are regulatory and tax parityamong competing financial institutions; multiple taxation offinancial institutions that do business in several states; taxavoidance by out-of-state banks; and out-dated jurisdictionalstandards.     

The introduction of professional regulation and labor market conditions

There has been increasing concern by policy makers about the impact of occupational regulation and the process by which it is introduced. This paper examines the introduction of mandatory licensure laws to replace public certification of registered nurses at the state level. Historical analysis supports the hypothesis in economic models that small groups with concentrated interests like occupations will dominate the introduction of laws and suggests examining changes in labor market conditions may be useful in predicting future demands for legislation. Estimates of an empirical model of the diffusion of licensure across states for nurses suggests this type of quality assurance regulation was introduced first where the quality of services was probably already relatively high and that policies reducing the impact of licensure on geographical mobility may reduce pressure for new laws. Patterns in the introduction of laws also have implications for evaluating their impact.     

WOMEN, LABOR MARKETS. AND COMPARABLE WORTH

This article reviews various theories about labor markets in the United States and traces the arguments that accompany each theory concerning why women earn less than men. To test some of these arguments, the paper uses aggregate statistics on the sex composition of occupations and industries during the decade 1970–1980 t o identify trends. Findings show that the sex segregation of occupations decreased slightly while the sex segregation of industries increased. The earnings differential between men and women remained substantially the same. The paper offers an explanation using labor market theories for these empirical findings and, in light of this explanation, assesses the implications for the effectiveness of comparable worth policies.     

An empirical investigation of interstate AFDC benefit competition

Claims that states which offer generous welfare benefits attract the poor and that some states pay low benefits intending to drive the poor away are neither uncommon nor entirely unfounded. This paper employs a two player (state) generalized game to model states' choice of a benefit level in the Aid to Families with Dependent Children (AFDC) program. Migration by the poor in response to interstate differentials in earnings and welfare opportunities, and the subsequent changes in AFDC caseloads, drive this game. Estimation of the model (using 1979 data) suggests that states within approximately 750 miles of each other do engage in a benefit-setting game. The rival's initial number of poor and preference for non-AFDC consumption appear to be the more influential rival characteristics. These findings, while derived from a different methodological approach, are consistent with previous studies which indicate that welfare recipients tend to move toward higher benefit states. Such migration may impede the efficient spatial allocation of labor. The results also indicate that states will tend to offer lower benefits given recipient migration than would be the case otherwise. State jurisdiction over benefits consequently leads to underprovision of AFDC. Federalization of the AFDC program would improve efficiency in terms of the spatial allocation of labor and the provision of AFDC.     

Public wage differentials and the treatment of occupational differences

Past research demonstrates that the estimated size of the federal government earnings differential shrinks substantially with the addition of detailed occupational controls. Possible explanations for this reduction are: controlling for the differing sectoral distributions of common occupations, and controlling for detailed occupations unique to each sector. While occupational detail does not eliminate the federal differential, more than two‐thirds of the reduction in the federal differential comes from controlling for unique occupations and, moreover, this is equivalent to excluding all observations in unique occupations. This finding is contrasted with that for the local sector in which the differing distribution of common occupations largely explains the pattern of the differential. © 2004 by the Association for Public Policy Analysis and Management.     

Fiscal Competition Among States in Australia: The Demise of Death Duties

This study examines interstate migration in Australia for theperiod 1972–1985 to determine if it was influenced byTiebout-style fiscal competition. In particular, it examinesthe impact of Queensland's abolition of death duties in themid-1970s. The evidence presented is consistent with the commonwisdom surrounding the event as well as with the Tiebout hypothesis.Interstate migration during this period appears to have beenin favor of Queensland and at the expense of those states thatdelayed following the Queensland example. Queensland's populationgrowth during the first three years after abolishing death dutieswas an average 0.20 percent higher due to migrants avoidingthe death duties of the other five states. On average, populationgrowth in each of these states was 0.04 percent lower as a resultof the tax.     

"Welfare Magnets" and Benefit Decline: Symbolic Problems and Substantive Consequences

In response to concern about "welfare migration," some stateshave been freezing benefit levels and trying to institute lowerbenefits for newly arrived out-of-state applicants. There isalso evidence that rising welfare rolls lead states not to raisebenefits. Yet, interstate variation in welfare benefits hasnarrowed over the last two decades. There is also evidence thatwhile interstate competition, or comparison of benefit levels,discourages high-benefit states from raising benefits, stateslook more at themselves then they look at each other. The mostsignificant factor affecting AFDC benefit-levels appears tolie in the intergovernmental arrangements for financing publicassistance (i.e., states often allow Food Stamps and Medicaidto substitute for AFDC). In addition, the migration of poorfemale headed families is patterned after the migration of thepopulation in general; they move to where there is job growth.A major political consequence of stressing welfare migrationmay be its symbolic value in reinforcing prejudices againstwelfare recipients.     

State Taxation of Interstate Sales: Enforcement Problems and Prospects

In their search for additional revenues, state governments in recent years have turned greater attention to collection of use taxes. Growth in interstate mail order sales has vastly increased the potential yield from use taxes, but Supreme Court decisions have limited the ability of states to effectively collect the tax. States have attempted to overcome enforcement barriers by joining in interstate use tax compliance compacts, and promoting congressional legislation to overcome constitutional prohibitions.     

Through a Glass Darkly: Afrocentrism,War, and World Politics

While the two dominant Eurocentric paradigms of world politics, realism and idealism, place greater emphasis on power and regime type, respectively, in their analyses of war, a recently promulgated Afrocentric paradigm of world politics suggests that cultural characteristics of states are significantly associated with the likelihood of interstate war. Drawing on these competing perspectives, I conduct a data analysis of the relationship between cultural homogeneity and interstate conflict in order to determine the extent to which Afrocentric theses on international conflict are borne out empirically. I find that cultural factors are significant correlates of interstate war as Afrocentrists suggest, although realist and idealist factors are more strongly associated with the likelihood of interstate war. In addition, the findings suggest that multiculturalism—especially ethnic diversity—is a more auspicious path for interstate peace.     

Projecting immigrant earnings: the significance of country of origin

This article asks whether information about immigrants beyond their age, education, and years since migration can be productively used to project their earnings. Although many factors could affect immigrant earnings, what is most useful for Social Security modelling purposes is relevant information that is readily available on a continuous basis. Country of origin is a good candidate, as it is regularly and readily available from several administrative and survey data sources. In this article, microdata samples from the 1960-90 censuses are used to examine the relationship between country of origin and the earnings of immigrants. By following cohorts of immigrants over 10-year intervals, we learn how country of origin affects the initial earnings of immigrants and how the relationship between country of origin and immigrant earnings changes as immigrants continue to live in the United States. The article also presents theoretical insights and empirical evidence about the underlying causes of the link between country of origin and immigrant earnings.     

Characteristics of the longest job for new retired workers: findings from the New Beneficiary Survey

This article describes the duration and type of employment, occupational and industrial classification, and pension coverage associated with the longest job ever held by new social security retired-worker beneficiaries and nonretired persons enrolled only for Medicare. The Medicare-only enrollees usually had their retired-worker benefits withheld because their earnings exceeded exempt amounts under the social security earnings test. They were more likely to be self-employed and to be in executive, administrative, managerial, or professional occupations. By contrast, new retired-worker beneficiaries closely resembled the general labor force with respect to occupation, industry, and employer type. Persons who claimed benefits before age 65 differed from older retirees in that they were more likely to be in service and blue-collar occupations and less likely to be self-employed. Both sexes increased their pension coverage between the late 1960's and the early 1980's. By the latter period, the majority of retired workers reported employee pension coverage and, of those covered, most received a monthly benefit. Fewer women than men indicated pension coverage. Married women who retired early were least likely to indicate pension coverage and, when covered, were more likely than other retirees to report the receipt of a lump sum payment in lieu of monthly payments.     

Lifetime earnings patterns, the distribution of future Social Security benefits, and the impact of pension reform

In order to assess the effect of Social Security reform on current and future workers, it is essential to accurately characterize the initial situations of representative workers affected by reform. For the purpose of analyzing typical reforms, the most important characteristic of a worker is the level and pattern of his or her preretirement earnings. Under the current system, pensions are determined largely by the level of the workers' earnings averaged over their work life. However, several reform proposals would create individual retirement accounts for which the pension would depend on the investment accumulation within the account. Thus, the pension would also depend on the timing of the contributions into the account and hence on the exact shape of the worker's lifetime earnings profile. Most analysis of the distributional impact of reform has focused, however, on calculating benefit changes among a handful of hypothetical workers whose relative earnings are constant over their work life. The earnings levels are not necessarily chosen to represent the situations of workers who have typical or truly representative earnings patterns. Consequently, the results of such analysis can be misleading, especially if reform involves introducing a fundamentally new kind of pension formula. This article presents two broad approaches to creating representative earnings profiles for policy evaluation. First, we use standard econometric methods to predict future earnings for a representative sample of workers drawn from the Survey of Income and Program Participation (SIPP). Our statistical estimates are based on a simple representation of typical career earnings paths and a fixed-effect statistical specification. Because our estimation file contains information on each worker's annual earnings from 1951 through 1996 as reported in the Social Security Administration's earnings files, we have a record (though an incomplete one) of the actual earnings that will be used to determine future benefit payments. Our estimates of the earnings function permit us to make highly differentiated predictions of future earnings for each member of our sample. By combining the historical information on individual earnings with our prediction of future earnings up through the normal retirement age, our first approach produces tens of thousands of predicted career earnings paths that can be used in microsimulation policy analysis. Our second approach to creating lifetime earnings profiles is similar in some ways to the traditional method. For example, it is based on the creation of only a handful of "stylized" career earnings patterns. An important difference with the traditional method, however, is that we define the career earnings patterns so that they are truly representative of patterns observed in the workforce. We use simple mathematical formulas to characterize each stylized earnings pattern, and we then produce estimates of the average path of annual earnings for workers whose career earning path falls within each of the stylized patterns we have defined. Finally, we calculate the percentage of workers in successive birth-year cohorts who have earnings profiles that match each of the stylized earnings patterns. Although this method may seem simple, it allows the analyst to create stylized earnings patterns that are widely varied but still representative of earnings patterns observed among sizable groups of U.S. workers. The effects of policy reforms can then be calculated for workers with each of the stylized earnings patterns. Our analysis of U.S. lifetime earnings patterns and of the impact of selected policy reforms produces a number of findings about past trends in earnings, typical earnings patterns in the population, and the potential impact of reform. The analysis focuses on men and women born between 1931 and 1960. Along with earlier analysts, we find that men earn substantially higher lifetime wages than women and typically attain their peak career earnings at a somewhat earlier age. However, the difference in career earnings patterns between men and women has narrowed dramatically over time. Workers with greater educational attainment earn substantially higher wages than those with less education, and they attain their peak career earnings later in life. For example, among men with the least education, peak earnings are often attained around or even before age 40, whereas many men with substantial postsecondary schooling do not reach their peak career earnings until after 50. Our tabulations of the lifetime earnings profiles of the oldest cohorts (born around 1930) and projections of the earnings of the youngest profiles (born around 1960) imply that the inequality of lifetime earnings has increased noticeably over time. Women in the top one-fifth of female earners and men in the top one-fifth of male earners are predicted to receive a growing multiple of the economy-wide average wage during their career. Women born between 1931 and 1935 who were in the top fifth of female earners had lifetime average earnings that were approximately equal to the average economy-wide wage. In contrast, women born after 1951 who were in the top fifth of earners are predicted to earn almost 50 percent more, that is, roughly 150 percent of the economy-wide average wage. Women with a lower rank in the female earnings distribution will also see gains in their lifetime average earnings, but their gains are predicted to be proportionately much smaller than those of women with a high rank in the distribution. Men with high earnings are also predicted to enjoy substantial gains in their relative lifetime earnings, while men with a lower rank in the earnings distribution will probably see a significant erosion in their typical wages relative to the economy-wide average wage. That is mainly the result of a sharp decline in the relative earnings of low-wage men born after 1950. In creating stylized earnings profiles that are representative of those of significant minorities of U.S. workers, we emphasized three critical elements of the earnings path: the average level of earnings over a worker's career, the upward or downward trend in earnings from the worker's 30s through his or her early 60s, and the "sagging" or "hump-shaped" profile of earnings over the worker's career. That classification scheme yields 27 characteristic patterns of lifetime earnings. Surprisingly, the differnce between men and women within each of those categories is quite modest. The main difference between men and women is in the proportions of workers who fall in each category. Only 14 percent of men born between 1931 and 1940 fall in earnings categories with the lowest one-third of lifetime earnings, whereas 53 percent of women born in those years have low-average-earnings profiles. On the other hand, women born in those years are more likely to have a rising trend in lifetime earnings, while men are more likely to have a declining trend. We find that the distribution of lifetime earnings contains relatively more workers with below-average earnings and relatively fewer with very high earnings than assumed in the Social Security Administration's traditional policy analysis. For example, the "low earner" traditionally assumed by the Office of the Chief Actuary is assigned a level of average lifetime earnings that we find to be higher than the average earnings of persons in the bottom one-third of the lifetime earnings distribution. The stylized earnings profiles developed here can be used for policy evaluation, and the results can be compared with those from the more traditional analysis. That comparison produces several notable findings. Because earnings profiles that are actually representative of the population tend to have lower average earnings than assumed in the traditional analysis, workers typically accumulate somewhat less Social Security wealth than implied in the traditional analysis. On the other hand, because the basic benefit formula is tilted in favor of lower-income workers, the internal rate of return on Social Security contributions is somewhat higher than detected in the traditional analysis. Moreover, the primary insurance amount measured as a percentage of the worker's average indexed earnings tends to be higher than implied by the traditional analysis. Finally, the stylized earnings patterns can be used to compare benefit levels enjoyed by workers under the traditional Social Security formula and under an alternative plan based on individual investment accounts. That comparison shows, as expected, that the traditional formula favors low-wage workers and one-earner couples, while an investment account favors single, high-wage workers. Comparing two workers with the same lifetime average earnings, the traditional formula favors workers with rising earnings profiles (that is, with lifetime earnings heavily concentrated at the end of their career), while investment account pensions favor workers with declining earnings profiles (that is, with earnings concentrated early in their career).     

The more the merrier? Sino-Japanese security relations in the context of complex interstate rivalry in the Asia-Pacific region

Abstract

This paper analyses the evolution of Sino-Japanese rivalry in the security sphere concentrating on the Chinese perspective, and placing it within the wider context of complex interstate rivalry between China, Japan and the United States. From a theoretical viewpoint, this research contributes to the literature on interstate rivalry from multiparty perspective, which has been overlooked in existing research. China–Japan–US complex interstate rivalry includes elements of positional, spatial and ideological rivalry simultaneously. When rivalries mix two or more rivalry types, they become more difficult to resolve. The two broad trends of China’s military build-up and deepening US–Japan alliance evolve in tandem intensifying rivalry dynamics and increasing positional elements of rivalry. There are many indications on various levels that for China, controlling Japan’s international ambitions has become less important and more attention is paid to ways in which Japan helps the United States in reaching its objectives in Asia through their alliance agreement. The cases analysed to display complex interstate rivalry include the Taiwan question, territorial disputes in the East and South China Seas, and the North Korean nuclear issue.     

Interstate Spillovers,Fiscal Decentralization,and Public Spending on Medicaid Home‐ and Community‐Based Services

This article examines the interstate spillover effect of Medicaid expenditures for home‐ and community‐based services (HCBS) and tests the relationship between fiscal decentralization and public spending. Based on the theory of interstate strategic interaction, an empirical model is specified that explicitly accounts for interdependence in states’ spending decisions. The model is estimated by applying spatial econometric methods to panel data for the 50 U.S. states for 2000–2010. Findings show a positive interdependence in state HCBS expenditures that is contingent on similarity in citizen ideology between states. Fiscal decentralization, measured by transfer dependence and revenue autonomy, is positively related to Medicaid HCBS spending.     

Incentives,challenges, and dilemmas of TANF: A case study

This paper compares the incentives inherent in TANF (Temporary Assistance for Needy Families), the U.S. welfare system in place after the 1996 reforms, with those of TANF's predecessor, AFDC (Aid to Families with Dependent Children), using the experience in one state, Wisconsin, as an example. Is the new program successful in avoiding the “poverty trap” of the old welfare system, in which the marginal tax rates imposed on earnings and benefits were so high that they discouraged work effort outside a narrow earnings range? As women receiving assistance begin working more hours and earning more, income‐conditioned benefits (Food Stamps, EITC, Medicaid, and subsidies for child care) are reduced and withdrawn, in effect constituting a “tax” on earnings. Under TANF, there is more support for these families, at least in Wisconsin, and so economic well‐being should be higher for most women with earning in this range than it was under AFDC. But marginal tax rates under TANF remain high, and in some income ranges they are higher than under AFDC. Once in the work force, former TANF recipients have earnings over the long run that expose them to very high marginal tax rates, which decrease the benefits of working harder and make it very difficult to gain full eonomic independence. Evidence from other sources suggest that most low‐skilled women have earnings in the same range and so are likely to face similar reductions in benefits such as child care subsidies or the EITC as their earnings increase, even if they are not receiving welfare‐related benefits. © 2002 by the Association for Public Policy Analysis and Management.     

How Does Regulation Affect the Risk Taking of Banks? A U.S. and Canadian Perspective

This historical study utilizes annual insured bank data from 1936 through 1989 to empirically evaluate the impact of bank regulation on bank risk taking in a cross-country comparison of the United States and Canada. Risk is hypothesized to be determined, in part, by the regulatory environment in which a bank operates. The findings of this analysis contributes to the contemporary deregulation policy debate, since both branch banking restrictions and deposit insurance variables are found to be detrimental to bank stability. More specifically, these results support the 1994 Riegle–Neal Interstate Banking and Branching Efficiency Act, which removed legislative barriers to interstate branching. These results also confirm expectations that deposit insurance increases risk taking and supports the 1991 mandate by regulators that risk-based deposit insurance be created. Further, these findings support the 1988 Basel Accord to standardize bank capital requirements internationally and to link these standards to bank risk taking.     

Earnings histories of SSI beneficiaries working in December 1997.

Disabling conditions previously considered to be permanent and total are no longer viewed as automatic barriers to work. Medical advances, improved accommodations in the workplace, and changes in the nature of work for the working disabled have allowed many disabled people to rejoin the workforce. The Social Security Administration (SSA) has followed those developments with a view toward encouraging people receiving disability benefits to consider returning to work. To effectively target SSA's efforts and evaluate their success, information about previous work histories of the Supplemental Security Income (SSI) beneficiary population is used to provide baseline data. This article examines the earnings histories of 300,000 disabled SSI beneficiaries--one of the populations targeted by the expanded work-incentive measure under Public Law 106-70--who were working in December 1997. The article also investigates whether beneficiaries who are working have significant lifetime earnings and whether earnings patterns exist that might assist with SSA's work-support activities. SSI program records were matched to data in the Master Earnings File to explore the characteristics and earnings patterns before and after a person applies for benefits. The article addresses several questions: What are the general characteristics of disabled SSI beneficiaries? What are their earnings histories? Did they have an earnings record when they applied for SSI? Of the SSI beneficiaries working in December 1997, most tended to be younger than other disabled beneficiaries, to have some sort of mental disability, and to have earnings well below levels that would suggest their eventual, complete independence from the SSI cash benefits program. A look at past covered earnings revealed that the vast majority of SSI workers had a history of earnings before they applied for SSI benefits. Despite their severe impairments and age at the time of first eligibility, nearly 40 percent had earnings in 11 years or more. The amounts of those earnings were quite low, however, and were usually not high enough to preclude SSI eligibility. Examining the years immediately before and after the point of application indicated whether recent pre-application earnings were consistent with post-application return to work. Results were a bit surprising. They revealed that one-third of the 1997 SSI workers had no earnings, and another 28 percent returned to work despite having no earnings in the 4-year period before application. Persons receiving SSI because of mental retardation seemed to have poorer earnings histories than other workers but were more likely to return to work after application. That may be explained by their younger ages or may reflect the outside assistance they received in responding to SSA work incentives.     

Bureaucracy,altruism, and monetary policy

It has recently been argued that the fiscal relationship between the Federal Reserve and the Treasury, by which the Fed keeps a portion of its earnings, imparts an inflationary bias to monetary policy because that relationship gives the Fed an incentive to increase its earnings by increasing the monetary base. This hypothesis is tested within the framework of a Federal Reserve objective function incorporating bureaucratic and social goals, and no evidence is found to support it.     

FEDERALISM, POLICY, AND INNOVATION IN CORRECTIONS

State governments have historically dominated corrections policy, with little federal intervention. But over the past two decades, the trend has been toward "nationalizing" corrections policy, with less interstate variation and more federal standards, through the Safe Streets Act and other legislation. As federal funding declines, it may be expected that there will be a hiatus in state corrections reform, though national standards may survive if the federal courts continue to require state correctional systems to comply with federal laws previously implemented.