Deck 10: Worker Mobility: Migration, Immigration, and Turnover

Question 1

When compared to the earnings of political migrants,the earnings of economic migrants

A) start out lower, and increase more slowly.
B) start out lower, but increase more quickly.
C) start out higher, but increase more slowly.
D) start out higher, and increase more quickly.

Answer 1

C

Question 2

Studies using local labor markets as units of observation estimate that the effects of immigration on native-born wages and employment are ________.This could be because ________.

A) minimal; immigrants choose to locate in areas where demand is expanding
B) minimal; internal migration by native-born workers is minimal
C) large; immigrants and native-born workers are gross substitutes
D) large; internal migration by native-born workers is large

Answer 2

A

Question 3

Quit rates rise as

A) wages increase.
B) firm size decreases.
C) workers age.
D) the unemployment rate increases.

Answer 3

B

Question 4

The overall wage ratio of newly arrived male immigrants to native-born men fell substantially from 1960 to 1980.This is probably because

A) these immigrants miscalculated when deciding to come to the United States.
B) these immigrants face considerable discrimination in the American labor market.
C) the relative skill level of immigrants has declined.
D) these immigrants are gross substitutes for native-born workers.

Question 5

An increase in the number of immigrants causes

A) the labor demand curve to shift to the left.
B) the labor supply curve to shift to the left.
C) the labor supply curve to shift to the right.
D) the labor demand curve to become flatter.

Question 6

An increase in the discount rate would make a worker

A) more likely to change jobs.
B) less likely to change jobs.
C) exactly as likely as before to change jobs.
D) either more or less likely to change jobs.

Question 7

Which of the following would cause quit rates to decline?

A) an increase in the urbanization of the population
B) a decrease in the unemployment rate
C) a decrease in average wages
D) an increase in the average age of workers

Question 8

Within each age group,people with ________ are most likely to migrate.

A) a large amount of education
B) a large amount of experience
C) young children
D) no current employment

Question 9

If skilled and unskilled labor are gross complements,then an increase in immigration and a corresponding decrease in wages paid to unskilled laborers will cause

A) an increase in the employment of skilled labor.
B) a decrease in the employment of skilled labor.
C) no change in the employment of skilled labor.
D) a decrease in the employment of unskilled labor.

Question 10

The Immigration Reform and Control Act of 1986 was

A) the first act to increase the number of immigrants allowed to enter the United States each year.
B) the first act to punish employers of illegal immigrants.
C) the first act to place quotas on immigrants by skill level.
D) the first act to limit immigration to America.

Question 11

For workers who emigrate to the United States from a country with a less equal distribution of earnings,

A) the largest potential gain exists for unskilled workers.
B) the largest potential gain exists for skilled workers.
C) immigrants will be positively selected with respect to skills.
D) immigrants will, on average, have a higher skill level than the workers who do not emigrate.

Question 12

The deportation of illegal aliens may create jobs on a one-to-one basis for native workers if

A) the minimum wage is above the equilibrium wage.
B) the minimum wage is below the equilibrium wage.
C) the labor supply curve is very steep.
D) the labor supply curve is very flat.

Question 13

If skilled and unskilled labor are gross substitutes and if an influx of unskilled immigrants drives down the wages paid to unskilled workers,it will also

A) increase the wage of skilled workers.
B) decrease the wage of skilled workers.
C) either increase or decrease the wage of skilled workers.
D) cause no change in the wage of skilled workers.

Question 14

Which of the following does NOT explain why people are less likely to move long distances than short distances?

A) information costs
B) psychic costs
C) monetary costs
D) differences in available salaries

Question 15

The most important determinant of migration is

A) education.
B) race.
C) age.
D) experience.

Question 16

Most immigrants' discounted lifetime earnings will be lower than those of comparable native workers.This shows

A) that these immigrants miscalculated when deciding to emigrate.
B) that these immigrants made the right decision about immigration.
C) that these immigrants must be of lower quality than native workers.
D) nothing about their other options in their native country, so we cannot tell if their decision to emigrate was wise.

Question 17

An increase in his or her expected career length will make a worker

A) more likely to change jobs.
B) less likely to change jobs.
C) exactly as likely to change jobs.
D) either more or less likely to change jobs.

Question 18

The human capital theory of migration compares the costs of a move to

A) the sum of increased utility levels from each year on the new job.
B) the sum of the utility levels from each year on the new job.
C) the discounted sum of increased utility levels from each year on the new job.
D) the discounted sum of utility levels from each year on the new job.

Question 19

The earnings of immigrants,when compared to those of similar native workers,

A) start out above those of the native workers, but increase more slowly.
B) start out above those of the native workers, and increase more rapidly.
C) start out below those of the native workers, and increase more slowly.
D) start out below those of the native workers, but increase more rapidly.

Question 20

The annual rate of immigration to the United States (per thousand of United States population)

A) reached an all-time high in the early 1990s.
B) reached a post-World War II high in the early 1990s.
C) reached an all-time high in the 1930s.
D) has been fairly constant since World War II.

Question 21

City X has a large fraction of illegal immigrants; its native high school dropouts earn $17 an hour.City Y has a small fraction of illegal immigrants; its native high school dropouts earn $18 an hour.This suggests that illegal immigrants have a small effect on drop-out wages.Which of the following,if true and present,would suggest the true negative effect of illegal immigrants on dropout wages is much larger?

A) Illegal immigrants tend to locate in cities with lots of low-wage jobs.
B) Illegal immigrants and high school dropouts are gross complements.
C) Falling wages induces a capital inflow into a city.
D) A large fraction of illegal immigrants in a city causes native high-school drop outs to move out of the city and move where there are fewer illegal immigrants.

Question 22

For which of these groups are the psychic costs the greatest obstacle to moving?

A) more educated people
B) people moving within a community
C) people with children
D) single people

Question 23

Young workers are more likely to quit their jobs than older workers for all of the following reasons EXCEPT

A) younger workers have a longer period over which to collect the benefits of a job change.
B) younger workers have lower psychic costs from mobility.
C) younger workers have better job matches.
D) younger workers have less firm-specific training.

Question 24

One immigrant to country X increased her annual wage from $8000 (in her home country)to $10,000 in Country X.There are no costs to moving.At the same time,one native worker saw their wage fall from $15,000 to $10,000 because of the entry of the one immigrant into the labor market.The native worker was producing $16,000 worth of goods and the immigrant added another $11,000 worth of goods to total output.Both continue to work at $10,000.Given that nothing else happens,which of the following statements is true? Country X (not counting the immigrant)is

A) better off by $5000.
B) worse off by $5000.
C) better off by $1000.
D) worse off by $4000.

Question 25

Suppose there is a large increase in immigrants from Romania into the United States.Native workers in the United States would be better off when they are

A) Gross substitutes with Romanian workers.
B) Gross complements with Romanian workers.
C) Not affected by the "output effect" caused by the new Romanian workers.
D) Complements, but not gross complements, with Romanian workers.

Question 26

Allowing more immigration of unskilled workers will lower the real wages of skilled workers if

A) unskilled workers are substitutes for skilled workers and the substitution effect dominates the scale effect.
B) unskilled workers are complements to skilled workers.
C) Both A and B.
D) Neither A nor B.

Question 27

In the past,China limited the movement of workers from rural to urban areas.When it got rid of these limits,one would expect

A) urban wages to rise in order to attract rural workers.
B) rural wages to fall as workers leaving depress the rural area.
C) national output to rise as workers are better matched with employers.
D) national output to fall due to higher total mobility costs.

Question 28

An economist assumes while educated persons have lower informational costs to moving,younger adults have lower psychic costs of moving.Which of the following observations (if true)would support this assumption?

A) Among people with the same education, we observe younger persons moving only if there is a large wage gain from moving.
B) Among people of the same age, we observe less educated persons moving only if there is a large wage gain from moving.
C) Both A and B support the assumption.
D) Neither A nor B support the assumption.

Question 29

One model of moving assumes that a family will move when the present value of the wage gains summed over the two spouses exceeds the full cost of moving.Which of the following observations (if true)would give the most support to this model?

A) The higher the observed wage gain of one spouse, the lower is the likely wage gain of the other spouse.
B) The higher the observed wage gain of one spouse, the higher is the likely wage gain of the other spouse.
C) The wage gain of one spouse is not related to the wage gain of the other spouse.
D) A married person and a single person are as equally likely to move when they have the same wage gain from moving.

Question 30

Higher costs of changing jobs will result in all of the following EXCEPT

A) individual firms' labor supply curves will slope upward.
B) some workers will stay in jobs even when they can earn more in an identical job with another firm.
C) firms will lose some monopsony power.
D) quit rates will not be perfectly responsive to changes in wages.

Question 31

Suppose women have higher quit rates than men.Which of the following (if true)would NOT explain why? (Note: in fact,after controlling for the relevant factors,women's quit rate is the same as men.)

A) Women workers get less firm-specific training.
B) Women are more educated than men.
C) Women invest in human capital that is of use to many employers.
D) Married women traditionally have changed employers when their husband got promoted and move to another city.

Question 32

Suppose the United States erected a wall on its border with Mexico that increased the cost of illegally immigrating to the United States.The effect of the wall would likely be to

A) increase the educational level of Mexicans immigrating to the United States.
B) decrease the educational level of Mexicans illegally immigrating to the United States.
C) increase the wages of illegal immigrants in the United States, which in turn would likely increase the number of illegal immigrants.
D) decrease the wages of illegal immigrants.

Question 33

Which of the following would decrease the mobility of workers within a nation?

A) laws making it more costly for employers to fire workers
B) laws requiring a mandatory waiting period before persons moving into a community qualify for welfare benefits
C) an increase in the percent of jobs that are unionized
D) all of the above

Question 34

Health insurance and pension plans that are not portable between companies

A) increase job mobility as more workers change jobs to find the best health and pension plans.
B) cause quit rates to be higher than is socially useful.
C) increase the willingness of the company to pay for the training of its workers.
D) make the economy more flexible by making job matches that best adapt to changing conditions.

Question 35

When Jeremy looks at the monetary costs and benefits of moving,he found that he would be on net $50,000 better off by moving.He decides to stay where he is and not move.Which of the following could explain this behavior?

A) He has a longer time horizon than suggested by the discount rate he used to calculate the present value of the benefits of moving.
B) He believes that if the move does not work out, he could easily move back and be no worse off.
C) He dislikes the climate in the city he planned to move to almost as much as his current city's climate.
D) He places a high psychic cost on moving.

Question 36

One immigrant to country X increases his wage from $13,000 (in their home country)to $15,000.There are no costs to moving.A native worker was earning $15,000.However,the immigrant replaces him and the native instead lives and works at home,which he values at $15,000.Which of the following statements is true?

A) Country X (not counting the immigrant) is better off.
B) The native worker is worse off.
C) The immigrant could be taxed $1000 with the proceeds going to the native worker and the employer so that everyone is better off (compared to no immigration).
D) The net benefit of this immigration to everyone (native worker, employer, immigrant) is zero.

Question 37

Suppose that by moving,one could increase one's income by 20%.Which of these events will reduce the likelihood a person will move?

A) Wages in the person's profession, nationwide, fall dramatically.
B) The person becomes better educated.
C) Markets for the person's skill become less localized.
D) The person has no children, making a good fit less important.

Question 38

Average job tenure is lower in the United States than in most other industrialized countries.Theory predicts that this could be because

A) the United States is less densely populated.
B) American workers receive higher levels of firm-specific training.
C) the costs of residential mobility are lower in the Unites States.
D) most American workers have employer-based health insurance.

Question 39

As long as immigrants are paid their marginal product and pay more in taxes than they consume in government benefits,then an increase of immigrants will cause

A) aggregate income of natives to increase.
B) average wages of workers to increase.
C) individual incomes of all workers to increase.
D) average wages of workers to stay the same.

Question 40

Which of the following can NOT explain why wages in Miami did not fall and unemployment rates did not increase after the Mariel boatlift?

A) The labor demand curve shifted to the right.
B) Some people moved out of Miami in response to the influx.
C) Miami's economy went through a rapid "boom" right after the immigrants arrived.
D) A high percentage of the immigrants were unskilled workers.

Question 41

In an industry,a unit of output can be produced by 3 unskilled workers or by 1 skilled worker.From this information,skilled and unskilled workers are

A) gross complements.
B) substitutes-in-production.
C) complements-in-production.
D) gross substitutes.

Question 42

In a competitive industry,it takes a fixed ratio of one skilled worker and two unskilled workers to produce a unit of output.If the immigration of unskilled workers lowers the wage of unskilled workers,it will likely

A) increase the demand for skilled workers due to the scale effect.
B) increase the demand for skilled workers due to the substitution effect.
C) decrease the wage but increase the employment of domestic unskilled workers.
D) All of the above will occur.

Question 43

Assuming the demand curve for labor does not shift,a given inflow of immigrants will lower wages more when

A) the labor demand curve is more elastic.
B) the domestic labor supply curve is more elastic.
C) Both A and B will cause the wage to fall more.
D) Neither A nor B will cause the wage to fall more.

Question 44

Suppose you have data for two groups of immigrants that are alike in age and educational status but who differ in that one group voluntarily immigrated (refer to them as economic immigrants)while individuals in the other group are political refugees that fled their home country and are unable to return.Draw a graph that plots earnings on the vertical axis against years in country on the horizontal axis for each group.(Note that your graph will be like an age/earnings profile graph except that time in country rather than worker age (which is controlled for here)is on the horizontal axis.)Explain why the profiles look as you have drawn them.

Question 45

Suppose all home values fall by $50,000,such that when a person moves,they have to take a $50,000 loss as they had borrowed up to the full value of the house.However,assume movers still have the credit to buy a new home.How will this event affect the mobility of homeowners as compared to losing $50,000 in the stock market?

A) Mobility will be the same as either loss is a sunk cost.
B) The loss in home value will reduce the mobility of owners more because by not moving, they can avoid facing the loss in their home's value.
C) The loss in home value will increase mobility because homes elsewhere are now $50,000 cheaper.
D) The loss in home value will increase mobility only if homes are expected to appreciate more than stocks.

Question 46

How does illegal immigration to the United States occur? What are the dimensions of the illegal immigrant population in the United States?

Question 47

Most college professors have tenure,which makes it very hard to fire them.What is the effect of tenure on the academic job market?

A) It makes it more likely the wages of tenured professors will reflect their productivity.
B) It makes it more likely that professors will be well matched to the institutions they teach in.
C) It reduces the job mobility of tenured professors.
D) It increases the professors' willingness to invest in teaching.

Question 48

Overall,the gains due to illegal immigration most likely exceed the losses imposed by illegal immigration.Explain why.

Question 49

How does earnings distribution help predict which skill groups within a sending country are most likely to emigrate from the country?

Question 50

How does the quit rate behave over the business cycle?

Question 51

"Quit rates tend to increase with firm size." True,false,or uncertain? Explain your reasoning.

Question 52

What is the human capital view of mobility? Write out the Present Value of Net Benefits formula and use it in answering the question.

Question 53

Other factors held constant,middle aged workers (ages 35-44)are more likely to migrate than workers in other age categories.True,false,or uncertain? Explain the basis of your choice.

Question 54

A friend claims that "If the United States prevents illegal immigrants from obtaining jobs,then that will create an equivalent number of jobs for deserving Americans." Evaluate the friend's claim with demand/supply analysis.

Question 55

Suppose that an influx of relatively unskilled immigrant labor occurs.What is the effect of the influx of immigrant labor on the labor market for more skilled native workers?