University of California, Davis Economics Midterm Exam 1 (Version A) PDF

University of California, Davis Economics Santiago Pérez Winter 2020 Name: _____________________________ ID:_________________________________ ECN 117 Economics of international migrations Midterm Exam 1 (Version A) In general, the highest grades will be given to clear and precise answers. Use your t...

University of California, Davis Economics Santiago Pérez Winter 2020 Name: _____________________________ ID:_________________________________ ECN 117 Economics of international migrations Midterm Exam 1 (Version A) In general, the highest grades will be given to clear and precise answers. Use your time wisely, and good luck. You will be given 60 minutes to complete the exam. There are total of 60 points in the exam, so you should allocate about 1 minute per point. A. [2 points each, total of 28 points]. Multiple choice questions. 1. Immigrants in the contemporary US are characterized by the following: a. First-generation immigrants are more than 20% of the population; there is a higher fraction of authorized than of unauthorized immigrants b. First-generation immigrants are less than 20% of the population; there is a higher fraction of authorized than of unauthorized immigrants c. First-generation immigrants are more than 20% of the US population; there is a lower fraction of authorized than of unauthorized immigrants d. First-generation immigrants are less than 20% of the US population; there is a lower fraction of authorized than unauthorized immigrants e. First-generation immigrants are less than 20% of the US population; there is a similar fraction of authorized than of unauthorized immigrants 2. The distribution of immigrants across educational groups in the US is characterized by: a. An overrepresentation (relative to natives) of high-school dropouts b. An underrepresentation (relative to natives) of PhDs in Science and Engineering c. An overrepresentation (relative to natives) of PhDs in Science and Engineering d. a and b e. a and c 3. Which of the following are differences between the “Age of Mass Migration” (1850-1913) and the era of “Constrained Mass Migration” (1946-present)? a. Europe is now a receiving rather than a sending region b. South America is now a receiving rather a sending region c. The US is no longer the major destination country for immigrants d. a and b e. a, b and c 4. Consider the Roy/Borjas model of immigrant selection. The destination country is interested in increasing the number of immigrants that it receives. To do so, it decides to introduce a migration “subsidy”, such that migration costs would decrease from 15 to 10. Such policy would affect the number and selection of immigrants in the same way as if: a. Wages in the destination for those with no education (that, is for those with s=0) decreased by 5 b. Wages in the destination for those with no education (that, is for those with s=0) increased by 5 c. Wages in the origin for those with no education (that, is for those with s=0) decreased by 5 1 University of California, Davis Economics Santiago Pérez Winter 2020 Name: _____________________________ ID:_________________________________ d. Wages in the origin for those with no education (that, is for those with s=0) increased by 5 e. b and c 5. Consider the Borjas model of immigrant selection. Wages in the origin country are given by wo=2+3s, whereas wages in the destination country are given by wd=1+2s, where “s” represents a person’s years of schooling. Moving from the origin to the destination country requires paying a fixed cost of 5. Which of the following is true? a. Migrants are positively selected from the origin country b. Migrants are negatively selected from the origin country c. Migrants are neutrally selected from the origin country (i.e. there are no differences between migrants and stayers in terms of their educational attainment) d. No individuals in the origin country would move to the destination country e. b and d 6. Assume that there are only three possible levels of education: “low”, “middle” and “high”. Among Argentine immigrants in the US, 0% have “low” education, 50% have “middle” education and 50% have “high” education. Among Argentine stayers, 100% have “low” education. The Net Difference Index comparing the education of Argentine immigrants in the US to the education of Argentine stayers is equal to: a. -1 b. -0.5 c. 0 d. 0.5 e. 1 7. Assume that the entry earnings (that is, how much immigrants make on average on their first year in the host country) of immigrants who entered in 1990 were lower than the entry earnings of immigrants who entered in 2000. In addition, returns migrants from 1990 to 2000 were positively selected (that is, those making more money in the US were more likely to return to their countries of origin). In this case, measuring the progress of immigrants over time using data just from the 2000 census would lead to: a. Overestimate the progress of immigrants over time b. Underestimate the progress of immigrants over time c. Neither overestimate nor underestimate d. It is not possible to know without further information e. a and d 8. Assume that immigrants who do worse in the labor market have higher mortality rates than immigrants who do better. In this case, measuring the progress of immigrants in the labor market based on data following an immigrant arrival cohort will tend to: a. Overestimate the progress of immigrants over time b. Underestimate the progress of immigrants over time c. Neither overestimate nor underestimate d. Depends on whether cohort effects are positive or negative e. None of the above 2 University of California, Davis Economics Santiago Pérez Winter 2020 Name: _____________________________ ID:_________________________________ 9. Consider the Borjas model of immigrant selection. Assume that migrants are initially positively selected from the origin country. A decrease in the returns to skill in the origin country will cause: a. Decrease in number of immigrants, immigrants to become on average more educated b. Increase in the number of immigrants, immigrants to become on average less educated c. Decline in the number of immigrants, no change in the average education of immigrants d. No change in the number of immigrants, immigrants to become on average more educated e. Decrease in the number of immigrants, immigrants to become on average less educated 10. The educational attainment of second-generation immigrants in the US is characterized by: a. Being lower than that of first-generation immigrants b. Being higher than that of first-generation immigrants c. Being similar to that of first-generation immigrants d. Being similar to that of the children of natives e. b and d 11. Feliciano (2000) provides evidence on the educational attainment of immigrants in the US. The evidence in this paper can be summarized as follows: a. Immigrants in the US are on average less educated than natives b. Immigrants in the US are on average more educated than natives c. Immigrants in the US are on average more educated than individuals from their same countries who did not migrate d. Immigrants in the US are on average less educated than individuals from their same countries who did not migrate e. There are no large differences between immigrants and natives in terms of educational attainment 12. Which of the following facts are true about immigrant labor market assimilation in the US over the last decades? a. Immigrants narrow the earnings gap with the US born as they spend time in the US b. Data following immigrant arrival cohorts overestimates the true pace of immigrant assimilation c. Return migrants tend to be negatively selected (with respect to earnings in the US) d. a and b e. a, b and c 13. Relative to immigrants in the 1880s, immigrants in the contemporary US are characterized by: a. There is a higher fraction of Southern and Eastern Europeans among contemporary migrants relative to immigrants in the 1880s b. There is a higher fraction of men among contemporary migrants relative to immigrants in the 1880s c. There is a higher fraction of Asians among contemporary migrants relative to immigrants in the 1880s d. There is a higher fraction of women among contemporary migrants relative to immigrants in the 1880s e. c and d 3 University of California, Davis Economics Santiago Pérez Winter 2020 Name: _____________________________ ID:_________________________________ 14. In the Roy/Borjas model of immigrant selection, a decrease in the returns to skill in the destination country will cause: a. An increase in the number of migrants b. A decrease in the number of migrants c. Immigrants to become on average more educated if migrants were initially negatively selected d. Immigrants to become on average more educated if migrants were initially positively selected e. b and d B. [6 points]. Short answer question 1. Returns to education are higher in both Brazil and Puerto Rico than in the US. Feliciano (2000) finds that Brazilian immigrants in the US have more education than Brazilians who stayed in Brazil, but Puerto Rican immigrants in the US have less education than Puerto Ricans who stayed in Puerto Rico. a. Are these findings consistent with the Borjas model of immigrant selection? Explain No, we should expect negative selection from Brazil as well b. Provide one reason why the selection of Puerto Rican migrants in the US is different from the selection of Brazilian migrants Migration policy: may limit migration of low educated Brazilians, while migration from PR unrestricted C. [16 points]. Exercise 4 University of California, Davis Economics Santiago Pérez Winter 2020 Name: _____________________________ ID:_________________________________ Consider a situation in which there are just two countries: an Origin, and a Destination country. Wages in the origin country are given by: wo=1+2s Wages in the destination country are given by: wd=7+s. where s are years of schooling. Migrating from the Origin to the Destination country requires paying a fixed migration cost of 1. a. [4 points] How many years of schooling do you need to have so as to be indifferent between staying in the Origin country and moving to the Destination country? Are immigrants from the Origin to the Destination positively or negatively selected with respect to years of schooling? Explain Indifferent if: 1+2s=7+s-1 Hence, s=5 5 years of education. Immigrants are negatively selected (returns to schooling higher in origin than in destination). The politicians in the Destination country are worried that too many immigrants from the Origin country are moving. To reduce the number of immigrants, they are evaluating two alternative policy proposals: The first proposal is the introduction of a visa fee of 2 (to be paid in addition to the fixed migration cost of 1). b. [4 points] What would be the effect of the visa fee on the number of immigrants? What would be the effect of the visa fee on the years of schooling of immigrants? Show your work Indifferent if: 1+2s=7+s-1-2 Hence, 5 University of California, Davis Economics Santiago Pérez Winter 2020 Name: _____________________________ ID:_________________________________ s*=3 Before, anyone with s