Describe what economic theory suggests must be the sign of

Reference no: EM13394902

A researcher wishes to investigate the impact of immigration on the Canadian labour market. She uses time-series data on the number of immigrants the national unemployment rate from 1961 to 2000 to estimate the following relationship:

dur(t) = a + yd ln imm(t) = e(t)

where dur(t) is the change (from one year to the next) in the unemployment rate, and d ln imm(t) is the change in the logarithm of the number of immigrants arriving in Canada.

a. Explain what economic theory suggests should be the sign of y.

b. She obtains the following regression estimates (with standard errors in parentheses):

Intercept 0.015 (0.147)

d ln imm(t) -1.56 (0.75)

She interprets her results as showing that, far from adversely affecting the Canadian labour (and increasing the unemployment rate), increases in immigration actually reduce unemployment. Critically evaluate her interpretation. In your answer, you should discuss:

i. Under what conditions her interpretation may be correct

ii. The reasons her interpretation may be flawed

iii. Any evidence that you know sheds light on these issues

Reference no: EM13394902

Questions Cloud

Explain the difference between a low risk investment and a : explain the difference between a low risk investment and a high risk investment. give examples of investments that

A manufacturing company produces and sells 20000 units of a : a manufacturing company produces and sells 20000 units of a single product. total production costs are 14unit. if the

Identify the costs and benefits to a company of gathering : identify the costs and benefits to a company of gathering reporting and disclosing non-financial information ex.

A company consists of a total cost of 5000 per unit at a : a company has a total cost of 50.00 per unit at a volume of 100000 units. the variable cost per unit is 20.00. what

Describe what economic theory suggests must be the sign of : a researcher wishes to investigate the impact of immigration on the canadian labour market. she uses time-series data

Ealuate and choose alternatives make sure to identify any : you work for centervale apparel a large clothing manufacturing firm. centervale apparel has budgeted 9.7 million for

A bond that has a 1000 per value face value and a contract : compute the costs of capital for the firm for the following.a.a bond that has a 1000 per value and a contract or coupon

Contreras company consists of a capacity of 40000 units per : contreras company has a capacity of 40000 units per year and is currently selling all 40000 for 400 each. buerhle

Recognize the factors which lead to change in supply and : write an article concerning trends in consumption patterns.prepare a 1050-1400-word paper in which youdefine economics

User Account

All Pages