REGIONAL INCOME EVOLUTION IN SOUTH AFRICA AFTER APARTHEID*

ABSTRACT South Africa is one of the wealthiest countries on the African continent. The high national level (and growth) of GDP per capita, however, masks significant differences in economic performance across South Africa's regions. This paper uses (spatial) Markov chain techniques to describe the evolution of the entire cross‐section regional income distribution in terms of its intra‐distributional characteristics during the post‐Apartheid period. The results indicate a heavily diverging regional income distribution. Relatively poor regions are likely to remain poor or become even poorer and the richest regions will maintain their lead in terms of income levels. Explicitly taking account of space furthermore shows that these high‐income regions are acting as local growth poles, absorbing economic activity from their immediate surroundings. Location, trade, education, and the variable fortune of the gold mining industry seem to be important determinants of the observed evolution.     

THE IMPACT OF LOCAL DECENTRALIZATION ON ECONOMIC GROWTH: EVIDENCE FROM U.S. COUNTIES*

ABSTRACT We analyze the impact of fiscal decentralization on U.S. county population, employment, and real income growth. Our findings suggest that government organization matters for local economic growth, but that the impacts vary by government unit and by economic indicator. We find that single‐purpose governments per square mile have a positive impact on metropolitan population and employment growth, but no significant impact on nonmetropolitan counties. In contrast, the fragmentation of general‐purpose governments per capita has a negative impact on employment and population growth in nonmetropolitan counties. Our results suggest that local government decentralization matters differently for metropolitan and nonmetropolitan counties.     

THE IMPACT OF SPECIFIC-SECTOR CHANGES IN EMPLOYMENT ON ECONOMIC GROWTH, LABOR MARKET PERFORMANCE AND MIGRATION

ABSTRACT.  It is common in empirical regional economics to use total employment as an explanatory variable while investigating issues such as the level and distribution of income and migration. This paper argues that sector-specific changes in employment and labor market performance can have different effects on economic growth, the collection of tax revenue, migration, and the level and distribution of household income. As such, it is important to model sectors separately. We find that expansions in employment opportunities for a high-wage sector such as computer manufacturing or bioengineering, a medium-wage sector manufacturing, and the lower-wage sector of retailing have differing economic consequences for a small city. We use a data intensive computable general equilibrium model to obtain these results.     

INCOME INEQUALITY,ECONOMIC GROWTH,AND THE DISTRIBUTION OF INCOME GAINS: EVIDENCE FROM THE U.S. STATES*

ABSTRACT This paper first investigates a relationship between economic growth and income inequality using U.S. states data, a state cost‐of‐living deflator, and nonlinearity. It then explores the distribution of income gains among different income groups. We find that the impact of inequality on growth is nonlinear. Lowering inequality or increasing it substantially reduces growth; thus stable inequality may be good for growth. Economic growth affects incomes of the poor, the middle‐income group, and the rich similarly with the elasticity of one. Education and labor market policies become important in promoting growth and improving income gains of the poor.     

Inclusive growth from an urban perspective: a challenge for the metropolis of the twenty-first century

This paper addresses the study of inclusive growth from an urban perspective. It proposes to focus the relationship between urban economic growth and income distribution in cities in which manufacturing production and external demand play a central role. Opposed to the literature that considers economic growth leads to an increase in inequality in income distribution, we present some operative economic tools from Marshallian Industrial Districts theory and from urban economic theory with which to develop an economic strategy for inclusive urban growth, making possible to achieve simultaneously economic growth and improvements in income distribution. An interesting example of a metropolis with a dynamic of economic and employment growth compatible with a reduction in income inequality is provided by Barcelona. This metropolis disposes a Survey of living conditions and habits of the population since 1986 that allows an analysis in terms of inclusive urban growth.     

Vulnerabilities of Highly Skilled Immigrants in Canada and the United States

Despite similar permanent status immigration categories (Economic, Family, and Refugee), the experiences of skilled immigrants in Canada and the United States are quite different. The point system used to select applicants for the Economic Class in Canada makes skilled immigrants vulnerable to a number of perils after the migrant lands. Foreign credentials and work experience are discounted by Canadian employers, who also impose a discriminatory income penalty on minorities. While previous cohorts of Economic Class migrants may have been warned of these perils via reliable migrant networks, new Canadian research suggests that recent cohorts have no such safety net. This article examines the economic integration experiences of Economic Class migrants in the United States in light of the Canadian experiences. The vulnerabilities reported in Canada do not appear to be transferable to the United States, because immigration policy in the US stresses pre-landing employment commitments via employer sponsorship. Accordingly, prospective Economic Class migrants to the United States do not migrate without first knowing how their credentials and “minority status” will affect employment opportunities. However, for the 85,000 skilled workers admitted to the United States on H-1B temporary visas each year, the perils noted in the Canadian experience are relevant, as are a number of additional concerns.     

Economic growth and restructuring in Canada's heartland and hinterland: From shift‐share to multifactor partitioning

The geography of the Canadian economy has long been dominated by heartland‐hinterland contrasts, with manufacturing identified as the dominant function of most heartland cities in analyses of the 1961 and 1971 census data. However, the proportion of employment in manufacturing has been declining in the heartland provinces of Ontario and Quebec over the past fifty years and some geographers argue that the heartland‐hinterland dimension of the regional economy is being overridden by city‐regions that are integrated into global networks of production and trade. The heartland‐hinterland trends are examined using multifactor partitioning (MFP), an advanced shift‐share methodology, for the period of 2001–2006. This is the first intercensal period in which Canadian business has faced the full impact of the removal of North American tariff protection and the increased globalization of the Canadian economy. The data covers employment by eighteen industry sectors for the seventy‐three economic regions defined by Statistics Canada. MFP measures the region and industry‐mix effects, which are interpreted as in the traditional shift‐share model (though they are derived more accurately) and, in addition, an interaction effect. The results demonstrate that the broad heartland‐hinterland differences in the distribution of population and employment growth are increasing not decreasing and that the hinterland is in fact falling further behind the heartland in employment growth. However the Calgary‐Edmonton corridor and the Lower Mainland of British Columbia are emerging as a western heartland. The population size of cities does affect their rates of employment growth, but so too does their location: the growth of heartland cities is outpacing those in the hinterland. The Appendix provides the equations for two‐variable multifactor partitioning.     

CONSERVATION LAND AMENITIES AND REGIONAL ECONOMIES: A POSTMATCHING DIFFERENCE‐IN‐DIFFERENCES ANALYSIS OF THE NORTHWEST FOREST PLAN

The 1994 Northwest Forest Plan (NWFP) resulted in the protection of over 11 million acres of public forestland in the Pacific Northwest region of the United States. This paper quantifies the amenity effect arising from protected NWFP lands on long‐run community economic growth. Using community fixed effects and postmatching panel regression to control for many sources of bias, we find highly localized and positive amenity impacts on the growth in median income, population, and property values for small communities close to protected NWFP land, as compared to communities far from the NWFP. We find no effect on medium‐sized communities.     

The Space of Local Control in the Devolution of us Public Housing Policy

Sweeping changes in national policy aim to radically transform public housing in the United States. The goal is to reduce social isolation and increase opportunities for low income tenants by demolishing ‘worst case’ housing, most of which is modern, high‐rise buildings with high vacancy and crime rates, and replacing it with ‘mixed‐income’ developments and tenant based assistance to disperse current public housing families. Transformation relies on the national government devolving more decision‐making power to local government and public housing authorities. The assumption here is that decentralizing the responsibility for public housing will yield more effective results and be more efficient. This paper explores the problematic nature of decentralization as it has been conceptualized in policy discourse, focusing on the underlying assumptions about the benefits of increasing local control in the implementation of national policy. As this paper describes, this conceived space of local control does not take into account the spatial features that have historically shaped where and how low income families live in the US, including racism and classism and a general aversion by the market to produce affordable rental units and mixed‐income developments. As a result, this conceived space of local control places the burden on low income residents to make transformation a success. To make this case, Wittgenstein's (1958) post‐structural view of language is combined with Lefebvre's view of space to provide a framework in which to examine US housing policy discourse as a ‘space producing’ activity. The Chicago Housing Authority's Plan for Transformation is used to illustrate how local efforts to transform public housing reproduce a functional space for local control that is incapable of generating many of the proposed benefits of decentralization for public housing tenants.     

THE POLITICAL TRADE‐OFF BETWEEN ENVIRONMENTAL STRINGENCY AND ECONOMIC DEVELOPMENT IN RURAL AMERICA*

ABSTRACT We examine the impact of the political trade‐off between rural economic development and environmental quality on the determination of environmental regulations in the U.S. intensive livestock industry. The political economy model, adapted from Fredriksson (1997) , is tested empirically, using state‐level data on environmental regulation of the U.S. livestock sector. We find that state governments respond to greater potential for water pollution with more stringent environmental regulations. Consistent with our political economy model, we also find that states with lower recent growth in per capita income implement less stringent environmental regulations.     

A simultaneous equations model of migration and economic change in nonmetropolitan areas

A simultaneous equations model of migration and economic growth in nonmetropolitan regions of the United States is estimated using data for 1960-1970. The dependent variables considered include in-migration, out-migration, growth in employment, and growth in income. The findings indicate that there is a definite link between the patterns of economic and demographic change in nonmetropolitan areas but that it differs in important respects from that which has been observed in metropolitan areas.     

Working women in the city and urban wage growth in the United States

Although the female labor force participation rate of women has been steadily rising in the United States, there is substantial variation across cities. Previous cross‐county studies find that gender inequality in employment reduces economic efficiency hindering growth. This result is examined in a regional context, across metropolitan areas in the United States. Throughout multiple model formulations including instrumental variables approaches, higher initial female labor force participation rates are positively related to subsequent wage growth in metropolitan areas between 1980 and 2010. Specifically, every 10 percent increase in female labor force participation rates is associated with an increase in real wages of nearly 5 percent.     

The Impact of Temporary Immigrant Workforce Growth on Employee Verification Policies in the United States

The U.S. Department of Labor admits temporary immigrant workers to address labor shortages in local markets. Yet, do elected officials make it less difficult for some immigrants than others to secure employment in a state? Using U.S. temporary immigrant labor admissions data between 2006 and 2014, I examine the extent to which growth rates of main foreign‐born subgroups influence E‐Verify policies that require employers to authenticate the legal immigration status of employees. I find that state policymakers are less likely to enact E‐Verify policies in response to the growth of immigrants who work in specialty occupations (H‐1b visas). In contrast, the growth of immigrants working in nonspecialty occupations (H‐2a and H‐2b visas) increases the likelihood of enacting E‐Verify policies over time. The results suggest that policymakers release strict rules for employment only for highly educated immigrants who work in specialty occupations that offer higher paying salaries and career advancement opportunities. Disaggregating a monolithic foreign‐born population indicator into more specific class components provides an important contribution to public policy studies. Scholars will likely overlook the contrasting effects of specialty and nonspecialty immigrant workforce growth on policy decisions relating to immigrant employment.     

United States–Mexico: The Convergence of Public Policy Views in the Post‐9/11 World

This article explores the state of public policy preferences between the United States and Mexico in the realm of foreign policy in the context of the post‐9/11 world, democratic change within Mexico, and the immigration protests within the United States. Specifically, we will analyze the differences and possible convergence of public policy views on the issues of terrorism, immigration, free trade agreements, drug trafficking, and foreign policy. We find that although there are differences of opinion, particularly in the application of force in Iraq and on the benefits of free trade, there still remains a significant degree of positive convergence within the policy issues of terrorism, immigration, and drug trafficking. Although there are institutional impediments to progressive policy change, future relations between the United States and Mexico do not need to be contentious as long as the focus is on the similarities, rather than the differences, in public preferences between the populations of the two states.     

FIRM SIZES AND ECONOMIC DEVELOPMENT: ESTIMATING LONG‐TERM EFFECTS ON U.S. COUNTY GROWTH, 1990–2000

This paper investigates the role of the business size distribution on income and employment growth in U.S. counties from 1990 to 2000. We measure the business size distribution as the share of employees across nine establishment size categories that range from microfirms (one to four employees) to large firms (1,000+ employees) and using three indices similar to a Gini coefficient. Results show that the business size distribution has a significant impact on county‐level growth patterns. Employment shares in small firms increase employment growth, but decrease income growth. One possible conclusion suggests policies emphasizing small firms and entrepreneurship during times of high unemployment.     

Not Sustainable: India's Trade and Current Account Deficits

India's trade balance and current account have shown persistent deficits for a major part of its post‐independence period. Since the mid‐2000s, trade deficits have increased perilously, with a sharp rise in both oil and non‐oil imports. India has relied on services exports, remittances and capital inflows to offset trade deficits and sustain the current account deficit. This article examines the sustainability of relying on capital inflows, remittances and services exports to sustain these persistent trade and current account deficits. It argues that all three sources entail elements of fragility. The recent global economic slowdown, economic recessions in the United States and Europe, slow economic recovery, low growth forecasts and possibility of a secular slowdown in the United States and Europe raise questions about whether services exports and remittances can continue to generate sufficient earnings to offset trade deficits. Relying on capital inflows also carries risks of financial fragility, with short‐term capital inflows and external commercial borrowings becoming more prominent in the Indian economy.     

Australia’s trade diplomacy and the Trans-Pacific Partnership: ‘you’ve got to row your own boat’

ABSTRACT

As part of its economic diplomacy, Australia has directed intense effort into both bilateral and plurilateral trade negotiations such as the Trans-Pacific Partnership. According to then Minister for Trade and Investment Andrew Robb, with no major multilateral trade deal in decades, you have to ‘row your own boat’ or risk missing out. With the fundamentals of trade and the nature of trade negotiations changing, trade liberalisation has become an increasingly sophisticated and difficult negotiating area. A case study of the controversial TPP shows the tensions for a middle power navigating this space. The benefits of the TPP are contested and the government faces criticism of the adverse impacts of the agreement, especially investor-state dispute settlement clauses, impact on human rights and suspicion that the TPP is motivated by geopolitical drivers. In order not to lose more than it gains in moving away from the multilateral trade system, Australia must ensure that trade agreements are consistent with WTO rules and have open and fair accession regimes as a basis for signing. Finally, there is the need for higher levels of transparency and democratic accountability than has historically applied. A new white paper is necessary to make the case for trade liberalisation.     

The Location Choice of Employment‐based Immigrants among U.S. Metro Areas*

Abstract. This paper examines the initial location choice of legal employment‐based immigrants to the United States using Immigration and Naturalization Service data on individual immigrants, as well as economic, demographic, and social data to characterize the 298 metropolitan areas we define as the universal choice set. Focusing on interactions between place characteristics and immigrant characteristics, we provide multinomial logit model estimates for the location choices of about 38,000 employment‐based immigrants to the United States in 1995, focusing on the top 10 source countries. We find that, as groups, immigrants from nearly all countries are attracted to large cities with superior climates, and to cities with relatively well‐educated adults and high wages. We also find evidence that employment‐based immigrants tend to choose cities where there are relatively few immigrants of nationalities other than their own. However, when we introduce interaction terms to account for the sociodemographic characteristics of the individual immigrants, we find that the estimated effects of location destination factors can reverse as one takes account of the age, gender, marital status, and previous occupation of the immigrants.     

In the Shadow of Globalization: The European Community and the United States in the GATT Negotiations of the Tokyo Round (1973–1979)

This article explores the trade negotiations between the United States and the European Community in the Tokyo Round of General Agreement on Tariffs and Trade (GATT) negotiations, held in Geneva from 1973 to 1979. The article shows how the economic turbulence and the different domestic stances and policies toward the globalizing economy split the Western members of GATT into two camps. Countries, like France and the United Kingdom, less well equipped to face increased worldwide competition and the economic crisis were not keen on trade liberalization. Countries, like the United States and Germany, better equipped to face worldwide competition and in favour of policies that strengthened it, saw trade liberalization as the right path. Eventually, under US President Jimmy Carter's leadership and with the key support of Chancellor Helmut Schmidt, the results of the Round reflected a vote in favour of liberalizing international trade. Thus, the Round was shaped by the globalizing economy but, at the same time, its results gave further impetus to the globalization wave that would reach full swing in the 1980s–1990s. The GATT talks took place in the shadow of globalization: while attempting to govern the process, also built it up.     

Symposium: Australia–US Economic Relations and the Regional Balance of PowerAustralia,the United States and the Trans-Pacific Partnership: Diverging Interests and Unintended Consequences

When the talks for a Trans-Pacific Partnership (TPP) were launched in 2010, there appeared to be a coincidence of interests between the American and Australian governments in negotiating a high-quality, ‘21st-century’ trade arrangement that would multilateralise the bilateral and minilateral trade agreements that have proliferated in the Asia-Pacific region in the last 15 years. As the negotiations progressed, however, a divergence between American and Australian interests became apparent. Protectionist interests in the United States have prevented the administration from improving on market access agreements in the current preferential trade agreements with TPP partners, thereby undermining the multilateralisation objective. Some of the elements of the US template for 21st-century trade agreements, notably enhanced protection for intellectual property, and the inclusion of investor–state dispute resolution, clash with Australian trade priorities. Moreover, the central role of the TPP in the US ‘pivot to Asia’ has led to perceptions that it is part of a strategy to encircle China: consequently the TPP may force Australia to make the very choice between China and the United States that the government wishes to avoid.

当2010年启动跨太平洋伙伴关系时,在谈判高质量、“21世纪”的贸易安排时美国和澳大利亚政府的利益似乎走到了一起。这种贸易安排会使过去十五年里亚太地区繁荣的双边及微关系多边化。在谈判进行的过程中,美澳之间的分歧却变得明朗了。美国的保护主义利益集团阻碍政府在现行的与亚太伙伴的最惠贸易协定中改善贸易准入协定,因此损害了多边化的目标。美国21世纪贸易协议的模式,明显加强了知识产权的保护,而且包含了投资者—国家争端解决的内容,与澳大利亚贸易优先的考虑发生了冲突。但亚太伙伴关系在美国重心移往亚洲的计划中至关重要,让人觉得就是包围中国战略的一部分。因此亚太伙伴关系会迫使澳大利亚在中美之间做澳政府并不愿意做的选择。