We argue that when immigrant earnings are considered in the context of post-arrival human capital investment: cohort quality should be defined in terms of the present value of the whole earnings profile; and, an appropriate definition of “macro” effects is obtained using the earnings profile of the native born cohort entering the labour market at the same time as an immigrant cohort. We illustr...

It is a common wisdom that individual stocks’ returns are difficult to predict, though in many situations it is important to have such estimates at our disposal. In particular, they are needed to determine the cost of capital. Market equilibrium models posit that expected returns are proportional to the sensitivities to systematic risk factors. Fama and French (1993) three-factor model explains...

This study investigates the impact of IT investments and several contextual variables on the volatility of future earnings. We find evidence that IT investments strongly increases the volatility of future earnings and that four contextual factorsindustry concentration, sales growth, diversification, and leveragestrongly moderate IT’s effect on earnings volatility. It is notable that while the m...

Labor Market Assimilation and the Self-Employment Decision of Immigrant Entrepreneurs This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estim...

This paper uses the New Zealand Linked Income Supplement (LIS) to investigate the annual transitions in hourly earnings of working age individuals over the years 1997 to 2004. I first construct transition matrices for annual changes in weekly and hourly earnings, to enable comparison with previous analyses using New Zealand tax data. I then estimate the determinants of annual changes in hourly ...

Should Old-Age Benefits Be Earnings-Tested? We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individuals’ expected lifetime utility, whenever other taxes are taken into account. Moreover, it also lowers the realized lifet...

This paper estimates the effect of participation in high school extracurricular activities on future earnings, making three important contributions to the existing literature: 1) it compares the earnings effects of participation in different types of clubs; 2) it investigates whether the effect of clubs participation is constant over time; and 3) it employs an instrumental variables approach in...