Airline Liberalization in the US
This chapter reviews the history of aviation liberalization policy in the United States, with the objective of revealing whether competitive opportunities have increased for carriers serving US-international routes. Empirical analysis using US Department of Transportation data at the route level show routes covered by liberal air service agreement charge fares that are 5.7 percent lower than fares charged on routes that are not covered by such agreements. Mean findings also show greater frequency of service to passengers and a larger number of carriers serving routes covered by these liberal agreements. These findings are consistent with previous research examining welfare gains associate with aviation policies that loosen restrictions on fare setting and entry. Findings from this study are interpreted as suggesting additional welfare gains are available from negotiating with the remaining countries who have not settled on more liberal aviation service agreements
NonCitizen Employment and the Wages of Healthcare Support Workers in the US*
Nicholas Hill, Richard McGregory and James Peoples
This study considers contrasting hypotheses on relative wages of citizen and noncitizens employed as healthcare support workers. On one hand, weak enforcement of prevailing wage legislation for immigrants and possible employment of undocumented workers predicts noncitizen-citizen wage differences and a negative noncitizen wage effect on citizen support workers. On the other hand, citizen status job heterogeneity also predicts a citizen status wage differential, however, lower wages paid to noncitizens is not predicted to negatively influence wages of support workers who are citizens. Findings do reveal a citizen-noncitizen wage differential statistically significantly greater than the legal maximum. Elasticity of substitution findings suggest noncitizen support workers are not close substitutes for healthcare support workers who are US citizens, and additional wage findings do not reveal a statistically significant noncitizen wage effect. These findings are consistent with the prediction of the citizen status job heterogeneity hypothesis. However, finding noncitizen-citizen wage differences does not allow for ruling out the possibility of weak enforcement of prevailing wage legislation and possible employment of undocumented workers.
Decomposing Productivity Growth in Chinese Manufacturing
James Peoples, Bin Wang and Guangnan Zhang
This study contributes to the analysis of productivity growth in Chinese manufacturing by estimating unexplained technological change, infrastructure investment, and scale’s contribution to such growth. A flexible form translog cost function for 27 manufacturing industries classified at the two-digit industry code level for the 1998-2005 period is used to investigate each factor’s impact on each industry’s productivity growth. The findings suggest that for all industries excluding furniture manufacturing, unexplained technological change contributes to productivity growth. Infrastructure investment and scale contribute to such growth for 16 and 5 of the 27 industries respectively.
Input Allocation Efficiency in the United States Railroad Industry: Changing Work-rule and Managerial Flexibility
Azrina Abdullah Al-Hadi and James Peoples
This study explores the possibility of railroad input market distortion in the form of allocative inefficiency. Since the end of the 20th century US Rail carriers have consistently negotiated less rigid work-rules which may create a business environment that enhances carriers’ ability to employ an allocatively efficient mix of inputs. Using labor as the benchmark of comparison when examining usage of factor input findings suggests that indeed carrier do employ an allocatively efficient combination of equipment and labor, material and labor, and way and structures and labor. Findings also suggest carriers over invest in fuel with respect to labor. This latter finding comports well with the notion that remaining work-rule restrictions and stepped-up use of fuel efficient locomotives facilitate the overuse of fuel relative to labor.
The Influence of Noncitizen Truck Driver Employment on the Wages of Truck Drivers Who are US Citizens
Steven Trick and James Peoples
This study examines the effect of noncitizen truck driver employment on the wages of truck drivers who are US citizens. We hypothesize that citizen status job heterogeneity creates a labor market environment that contributes to relatively low wages for these drivers compared to drivers who are US citizens. Findings suggest a significant wage discount for noncitizen truck drivers, however, this discount erodes as these drivers gain experience in the US. Nonetheless, the noncitizen wage discount persists even when accounting for noncitizen drivers attaining greater years residing in the US. Findings also suggest noncitizen truck drivers are imperfect substitutes for truck drivers who are US citizens. This lack of perfect substitutability is consistent with this study’s findings indicating a statistically insignificant negative noncitizen effect on the wages of drivers who are US citizens