I've just come back to the office after a while on the road and noticed Bryan's post on the Mariel boat lift and the response that mentioned the Rybczynski theorem. If anyone is interested, I recently read an interesting NBER paper on the Rybczynski theorem and immigration by Gordon Hanson and Matthew Slaughter NBER working paper 7074: The Ryczynski thereom, factor-price equalisatgion and immigration: evidence from US states. Perhaps the sort of product diversification suggested by the result can account for the general difficulty in locating any negative impacts on low-skill wages of immigration? This would suggest that so-long as the inflow of migrants wasn't too big to move firms outside their diversification cones, immigrants will not depress wages. Perhaps an important point for policy? Donald McCarthy Centre for Post-Collectivist Studies Social Market Foundation [EMAIL PROTECTED] T: +44 020 72227060 F: +44 020 72220310 > -----Original Message----- > From: Bryan Caplan [SMTP:[EMAIL PROTECTED]] > Sent: Sunday, October 01, 2000 5:03 AM > To: [EMAIL PROTECTED]; Gordon Dahl > Subject: Card/Krueger Revisited > > Almost everyone has heard of the Card/Krueger minimum wage paper. No > apparent effect, suggesting a perfectly inelastic (vertical) labor > demand curve. > > But they had another equally perplexing paper on the Mariel boat lift. > Large influx of unskilled Cuban labor into southern Florida, but no > perceptible downward effect on wages. (This summary is based on > hearsay, so please correct me if I misstate anything). In other words, > this paper suggests a perfectly elastic (horizontal) labor demand curve. > > Note further that both of these papers focus on the market for > low-skilled labor, albeit in different states. So as puzzling as both > papers are separately, they are even more puzzling taken together: how > can labor demand be at once perfectly inelastic and perfectly elastic? > > Anyone able to resolve this puzzle? And has anyone else pointed this > out? > -- > Prof. Bryan Caplan [EMAIL PROTECTED] > > http://www.gmu.edu/departments/economics/bcaplan > > "[W]hen we attempt to prove by direct argument, what is really > self-evident, the reasoning will always be inconclusive; for it > will either take for granted the thing to be proved, or something > not more evident; and so, instead of giving strength to the > conclusion, will rather tempt those to doubt of it, who never > did so before." > -- Thomas Reid, _Essays on the Active Powers of the Human Mind_
