Deck 8: Labor Mobility

Question 1

Which of the following statements about self-selection and immigration flows into the United States is false?

A) If the flow of immigrants is currently positively selected, increasing the costs to immigration will likely make the future flow of immigrants even more positively selected.
B) Negative selection results in low-skilled workers coming to the United States.
C) High-skilled workers in foreign countries will not always choose to migrate to the United States.
D) Negative selection occurs when the United States offers a greater return to skill at high skill levels than the source country.
E) Positive selection results in highly skilled workers coming to the United States.

Answer 1

D

Question 2

If a two-person household moves from Miami to Atlanta, which of the following can describe the household?

A) Both members of the households are tied movers.
B) One member of the household is a tied stayer.
C) One member of the household is a tied mover while the other is a tied stayer.
D) Neither member of the household is a tied mover.
E) Neither member of the household is a tied stayer.

Answer 2

E

Question 3

Suppose there is currently positive selection of immigrants to the United States. What would happen to immigration to the United States if the return to skills were to fall in the United States?

A) The same selection of immigrants would continue to come to the United States.
B) The selection of immigrants to the United States would switch from being positive to being negative.
C) The selection would remain positive but with more workers immigrating to the United States.
D) The selection would remain positive, but the average skills of immigrants would fall.
E) The selection would remain positive, but the average skills of immigrants would increase.

Answer 3

E

Question 4

Which of the following statements is consistently associated with the standard migration model?

A) Return migration occurs only when the mover regrets having made the initial move.
B) Repeat migration occurs only when the mover regrets having made the initial move.
C) Repeat migration occurs only when the mover is moving for job-related reasons.
D) The decision to move is expected to increase the household's overall utility.
E) Moving for job reasons is always done at the expense of family desires.

Question 5

Which of the following regarding internal migration in the United States is not true?

A) Migration is more common among younger workers compared to older workers.
B) Migration is more common among educated workers compared to uneducated workers.
C) Migration equalizes wages across regions.
D) Empirically the mystery is why there is not more internal migration, not why there is not less.
E) Repeat and return migration are rational decisions and routinely occur.

Question 6

The Roy model concerns

A) the skill-selection associated with immigration flows.
B) specific on-the-job training.
C) general training.
D) the age-earnings profile.
E) the cost-benefit analysis of layoffs or quits.

Question 7

A couple is considering moving to Tampa from Chicago. The cost of moving for Crystal is $300 while the cost of moving for Amelia is $600. Crystal earns $500 in Chicago and $550 in Tampa. Amelia earns $200 in Chicago and $1000 in Tampa. Will they move as a couple?

A) Yes, because they would earn $1,550 in Tampa but only $700 in Chicago.
B) Yes, because they receive a net gain of $150 by moving to Tampa.
C) Yes, because the joint cost of moving ($900) exceeds what they could earn in Chicago ($700).
D) No, because they would lose $50 by moving to Tampa when all benefits and costs are considered.
E) No, because neither person would choose to move to Tampa on their own.

Question 8

In the standard Roy model, migration can lead to an increase in average skills in both locations. What is necessary for this to happen?

A) The workers who migrate from the source country are below-average in skill relative to the average source country person but are above-average in skill relative to the average destination country person.
B) The workers who migrate from the source country are above-average in skill relative to the average source country person but are below-average in skill relative to the average destination country person.
C) The highest skilled workers migrate from the source country to the destination country.
D) The lowest skilled workers migrate from the source country to the destination country.
E) Migration leads to an increase in average skills in both locations whenever there is positive selection.

Question 9

Which of the following is least likely to affect the net gain to migration?

A) an improvement in economic opportunities in the destination state
B) an improvement in economic opportunities in the source state
C) an increase in migration costs
D) changing one's preferences for living in different places
E) a general increase in the national price level

Question 10

Which of the following is not likely to prevent some people from migrating?

A) not wanting to face high financial costs associated with migrating
B) not wanting to leave their family and friends
C) having a spouse who has a very well-paying job in the current location
D) having a lucrative job offer in a different city
E) having a teenage child who does not want to change high schools

Question 11

Which is not a factor that generates return and/or repeat migration flows?

A) A worker realizes after the move that she or he miscalculated labor market opportunities in the new location.
B) A worker realizes after the move that she or he does not like the weather in the new location.
C) A worker moved initially in order to move up the career ladder in her or his company.
D) A worker lands a job after the move that pays a wage that is much greater than originally expected.
E) A worker realizes after the move that the monetary and psychic costs of moving are not as large as she or he originally calculated.

Question 12

When considering whether to migrate to a particular location, one calculates the present value of living in that location. How does one best calculate the present value of living in a location?

A) Determine the starting wage one will earn in the location.
B) Sum up the annual incomes one will earn in the location.
C) Sum the annual discounted incomes one will earn in the location.
D) Subtract one's wage in the current location from the starting wage in the new location.
E) Subtract one's wage in the new location from the starting wage in the current location.

Question 13

The Mincer earnings function is used to estimate

A) ability bias.
B) the signaling effect.
C) the social return to schooling.
D) the value of the marginal product of labor.
E) the age-earnings profile.

Question 14

Suppose the age-wage profile of immigrants has been increasing over time. That is, the age-wage profile of immigrants in the 1990s is higher than the age-wage profile of immigrants in the 1980s, which is in turn higher than the wage-age profile of immigrants in the 1970s. In this case, if one uses cohort analysis to estimate the age-wage profile of immigrants, which of the following is possible to find?

A) a negative return to moving costs
B) a horizontal age-wage profile
C) a positively skewed wage distribution
D) a negatively skewed wage distribution
E) negatively selected immigration

Question 15

Assuming the standard migration model is correct, estimates of the cost of moving can be as high as $300,000. What is likely the worst explanation for what this expense is so high?

A) The psychic costs of moving, for example, the uncertainty of making friends and adjusting to a new city, may be quite high for some people.
B) People may place a high cost on leaving family and friends.
C) People may attach a very high utility to the social amenities in one's birthplace.
D) Moving companies typically charge tens of thousands of dollars to transport household goods from one location to another.
E) People may place a high utility value on the cultural benefits and assimilation of their current location.

Question 16

Which of the following statements about migration is not true?

A) Migration is greater among younger workers compared to older workers because older workers have less time over which to benefit from the returns to migration.
B) Migration is greater among highly educated workers compared to less educated workers because the returns to education for highly educated workers vary more from location to location than for workers with low levels of education.
C) Migration is greater among married couples compared to single-person households because migration costs are less for married couples.
D) A tied-stayer is someone who would move if he or she were single.
E) Migration is greater among people who like the adventure of moving compared to people who do not like the adventure of moving because the psychic costs of moving are less for those who enjoy moving.

Question 17

Which of the following is the most likely explanation for why Mexican immigrants earn 46% less than native workers while Canadian immigrants earn 36% more than native workers in the United States?

A) The immigrant flow is positively selected from Mexico but negatively selected from Canada.
B) The immigrant flow is negatively selected from Mexico but positively selected from Canada.
C) The immigrant flow is positive from both countries, but there are fewer Canadian immigrants than there are Mexican immigrants.
D) The immigrant flow is negative from both countries, but there are fewer Canadian immigrants than there are Mexican immigrants.
E) The immigrant flow is negative from both countries, but there are more Canadian immigrants than there are Mexican immigrants.

Question 18

Negative selection in a migration model means that

A) immigrants from the source country are highly skilled relative to labor in the destination country.
B) immigrants from the source country are not highly skilled relative to labor in the destination country.
C) all workers in the source country would earn a higher return on their skills if they would remain in the source country.
D) all workers in the source country would earn a higher return on their skills if they would immigrate to the destination country.
E) anyone in the source country who can afford the cost of migrating to the destination country will do so.

Question 19

Why are high-power couples (i.e., both people have at least a college degree) more likely to migrate to large urban areas compared to low-power couples (i.e., neither person has a college degree)?

A) Urban areas offer a greater array of job opportunities and wages for educated people compared to rural areas and, therefore, living in an urban area reduces the likelihood of someone in a high-power couple being a tied-mover or tied-stayer.
B) Urban areas offer more college opportunities and at a lower price than typical rural areas.
C) High-power couples are not very willing to move after college.
D) Low-power couples cannot afford the costs associated with moving to an urban area.
E) There are very few low-skill jobs in urban areas.

Question 20

Which of the following is true?

A) A person might choose to not move because their family is better off by not moving, even though the person would individually be better off by moving.
B) A family will move even though as a unit they are better off staying as long as at least one member of the family is made better off by moving.
C) When a family migrates, there may be both tied movers and tied stayers in the family.
D) A repeat mover must have made a mistake in the initial move.
E) Cultural assimilation is not included in migration costs.

Question 21

Which of the following best captures how job turnover is related to the age-earnings profile?

A) Job separations, both quits and layoffs, are associated with a lower profile.
B) Job separations, both quits and layoffs, are associated with a higher profile.
C) Job quits are associated with a higher profile, while layoffs are associated with a lower profile.
D) Layoffs are associated with a higher profile, while job quits are associated with a lower profile.
E) The age-earnings profile is unrelated to job turnover because anyone who quits a job or is laid off no longer earns a wage.

Question 22

What is a possible explanation as to why workers who have been on the job for a long time earn more than newly hired workers?

A) Workers in bad job matches tend to stay on the job longer.
B) Workers in long-lasting job matches accumulate specific training over time, which increases the workers' productivity.
C) The positive effects of general training on education erode over time.
D) Young workers are more productive than older workers.
E) U.S. law requires older workers to be paid more than younger workers.

Question 23

When a firm pays higher wages, it is likely that doing so will

A) increase turnover.
B) lower the firm's ability to attract high-skill workers.
C) encourage workers to stay on the job for a long time.
D) decrease worker utility.
E) decrease the quality of the potential worker pool.

Question 24

Which of the following is the most likely reason the age-earnings profile is steeper for immigrants than it is for natives in the United States for ages 20 to 45?

A) The minimum wage does not apply to immigrants until they have resided in the United States for three years.
B) Immigrants have less leverage in negotiating wage increases.
C) Immigrant wages increase rapidly when they first come to the United States and begin developing stronger English skills.
D) Immigrants under the age of 45 must earn more money in order to pay for the legal expenses associated with becoming a citizen.
E) Immigrants under the age of 45 tend to remit a large portion of their earnings to their relatives who did not immigrate.

Question 25

Cross-sectional analysis of age-earnings profiles of natives and immigrants in the United States tends to reveal that immigrants earn

A) lower wages on average than natives at all ages.
B) lower wages on average than natives at young ages but earn equivalent to natives by age 45 and thereafter.
C) lower wages on average than natives at young ages but earn about 10% more than natives by age 45 and thereafter.
D) the same on average as natives at all ages.
E) about 10% more on average than natives at young ages but this premium disappears by age 45 and thereafter.

Question 26

Compared to older workers with several years of experience with one firm, newly hired young workers typically

A) have higher turnover.
B) have more on-the-job training.
C) have more experience.
D) are likely to stay with their job longer.
E) tend to earn more than their experienced colleagues.

Question 27

Why is it hypothesized that the slope of the age-earnings profile is likely steeper for workers who remain with their job (i.e., job stayers) compared to workers who experience job separation (i.e., quits and layoffs)?

A) Workers with longer tenure at their current firm have invested more in valuable firm-specific training.
B) Workers who experience job turnover, both quits and layoffs, are less productive than job stayers.
C) Workers who experience a job separation experience a jump down in the age-earning profile, which then must be flatter by construction.
D) Workers who experience a job separation must pay for their own job retraining.
E) None of the above explain why the age-earnings profile is steeper for job stayers compared to workers who experience job separation.

Question 28

Which of the following is not a reason why the labor market experiences job turnover?

A) Workers differ in their abilities.
B) Firms differ in their amenities and working conditions.
C) Economic conditions can dictate that a firm reduce its number of workers.
D) Workers might want to change jobs after accumulating general training or education.
E) All of these are reasons why the labor market can experience job turnover.

Question 29

Which of the following is a sign of a well-functioning labor market?

A) a high degree of labor mobility (job losses and job gains)
B) a constant unemployment rate
C) equal pay for all workers
D) equal pay in all regions
E) All workers have a college education.

Question 30

Which one of the following statements regarding job turnover in the U.S. labor market is false?

A) The quit rate is almost always higher than the layoff rate.
B) The overall separation rate is much higher for younger workers than older workers.
C) The overall separation rate falls with tenure on the job.
D) Workers who have a lot of seniority are likely to switch to a different firm when their wage-age profile begins to flatten out.
E) The quit rate is higher than the layoff rate for both young and old workers when they are in the first few years on a job.