This article presents an analysis of the models that have been developed in the literature to account for the rise in wage inequality during the 1980s and the 1990s. These models build upon the assumption of an acceleration in the rate of technological progress associated with the diffusion of...

In this chapter, we analyze immigration and its effect on urban and regional economies focusing on productivity and labor markets. While immigration policies are typically national, the effects of international migrants are often more easily identified on local economies. The reason is that...

We show that wrongful discharge laws - laws that inhibit the common-law doctrine of "employment-at-will" - spur innovation. In our model, wrongful discharge laws make it costly for firms to arbitrarily discharge employees. This enables firms to commit to not punish short-run failures of...