economy101

E101 WA 1 Immigration and Wages Due in NetTutor through the link in Blackboard ( learn.wsu.edu ) by Sunday , January 17, by 11: 50 pm (PST) In 1980 , Fidel Castro, then Cuba's president, invited Cubans who wished to leave his country to do so , provided they left through Cuba’s Mariel harbor . Between May and September, a flotilla of vessels (called the Mariel Boatlift ) transported about 125,000 Cubans from Mariel to Miami, resulting in a significant (7 -8%) increase in the supply of labor in Miami. The model of demand and supply that you have recently studied implies that, other things constant, an increase in the supply of a good or service ought to result in a decrease in its price. That is, when the supply of labor rises, all else remaining the same, we expect to see a decrease in the equilibrium wage in the relevant labor market. In this case, the relevant labor market is that for unskilled labor , since only about half of the new Cuban immigrants had a high school degree. There is now a broiling controversy over what actually happened. The graph below is from an article by Micheal Clemens , published by Vox on July 27 , 2017 entitled There's no evidence that immigrants hurt any American w orkers . The solid red line tracks the average wage for unskilled workers in Miami for a period spanning the 1980 influx of immigrants (from the early 70’s through 1987.) The dotted red lines indicate the confidence interval around that average. That is, due to the uncertainty in our measurements, the actual average wage in any given year could be as high as the top dotted line or as low as the bottom dotted line. The amount of uncertainty – and thus, the width of that confidence interval, depends on the number of people in the sample. The bigger the sample , the more certain the measurement. The gray dashed line shows what the average wage would have been had the pre- 1980 trend continued after 1980. E101 WA 1 The graph shows that average wages of low -skill labor in Miami actually rose after the wave of immigration – the opposite of the expected effect. The graph below , from the same article, shows a very different pattern. The pattern in the first graph was reported by economists Giovanni Peri and Vasil Yasenov in a 2015 study . The second graph reflects the pattern found in a 2017 article by George Borjas. In the words of Michael Clemens, “ In short, different well-qualified economists arrive at opposite conclusions about the effects of immigration, looking at the same data about the same incident, with identical modern analytical to ols at their disposal.” Writing Prompt : According to article, There's n o evidence that immigrants hurt any American workers , what accounts for the difference between Peri and Yasenov’s conclusion an Borjas’ conclusion? Thoroughly discuss the various factors that influenced the results of those two studies. Why does Michael Clemens claim that – even if no one’s wage actually changed, George Borjas’ data would nevertheless have show n a decrease in the average wage after 1980? NOTE: Your grade will be based solely on your objec tive analysis of the questions in the prompt. E101 WA 1 Gr ading Rubric – 5 criteria Please include your name, instructor’s name ( Dr. Prera), course and section number ( EconS 101.0 5), and writing assignment ( Assignment 1) on the top of your assignment. I expect about five paragraphs – which adds up to about 1 ½ - 2 pages, double spaced. Your essay will be assessed as either ‘Meets expe ctations’ or ‘Needs improvement’ on each of the criteria in the table below. If your essay needs improvement, you will be given feedback from NetTutor to help you revise it. You have one week from the time you receive your feedback to revise and re - submit the essay to NetTutor for another try – but you only get one second chance. You’ll need to accumulate three acceptable writing assignments to fulfill the writing portion of the course requirements. Criterion Needs Improvement Meets Expectations Writing The writing is difficult to follow and/or poorly organized. Transition sentences are absent or ineffective. Typos and/or grammatical errors distract the reader. Ideas are well -organized. Transition sentences effectively connect one idea to the next. The essay is free of typos and grammatical errors. Point 1 The cause of the difference between the two conclusions is incorrectly reported. The cause of the difference between the two conclusions is correctly explained. Point 2 The explanation of why the two conclusions differ lacks sufficient detail. The explanation of why the two conclusions differ is thoroughly supported with details from the article. Point 3 The causes of the change in the racial composition of the CPS are incompletely or inaccurately explained. Both causes of the change in the racial compositi on of the CPS are accurately identified. Point4 The causes of bias toward lower average wages in Borjas’ sample are incompletely or incorrectly explained. Both causes of bias towards lower average wages in Borjas’ sample are adequately explained.