Personal Blogs

My question here is: How else do election manifestos affect immigration policy and wage growth?

One well-researched answer has been given by my academic advisor while at Essex Economics Department, who is now teaching at Warwick Economics Department, Prof. Francesco Squintani. He agrees with the above, and in an outstanding theoretical economics paper that focuses on the micro-theory of pandering in elections, he and 2 co-authors argue that politicians overindulge in scrupulous policy announcements, to the detrimental welfare of the electorate.

This got me thinking about the task of comparing election promises (manifestos and wider announcements) in US. UK and to a lesser extent, French incumbent electoral campaigns. In his paper, Prof. Squintani argues that a politician’s motive is essentially viewed as a singular outcome - to be elected by voters - which poses an obstacle to precise information gathering and complete information because both politicians along a Hotelling location model (which is explained in the paper) pander around policies and create informational asymmetries.

I wrote in the original draft of “Pareto-Nash Reversion Strategies” (Mayaki, 2024) that burden of ascertaining skilled immigration demand must rest in the hands of institutional employers and not left at the doorstep of central government. The figures from this report by Pierce and Selee (2017) highlight the enormity of the task at hand when identifying precise immigration policy. 

Pierce and Selee (2017) argue that in the U.S. seven executive orders signed by newly elected President Donald Trump which restricted immigration policy and led to a 3.9% reduction in tourism to the United States in the first six months of 2017, a 9% reduction in newly arriving international students, and a decline in H-1B visa applications by employers’ with only 199,000 applications received that year – the lowest number since the Great Recession. These are not mercantilist numbers. If anything, they represent exactly that which won Trump’s election against H. Clinton. Promises of this sort are usually not credible, but what makes them credible is swift action immediately after an election victory as opposed to delayed implementation.

In that sense, I am completely fascinated by the discussion surrounding this WSJ / US Bureau of Labor Statistics chart, posted by Jason Furman on X (formerly known as Twitter). As Furman's argument goes, based on this chart, foreign-born workers have been and are more likely to be in post-pandemic employment (albeit at a much lower wage) than US-born workers. Furman (Former Chief Economic Adviser to President Barack Obama) says it reflects the work ethic of immigrant labor and by extension, the positive sentiment toward favorable migration policy in the United States.

My only response as a left-leaning economist is to highlight that because of an absence of a notable contribution in the form of structural unemployment shortages in the US-born population, the consensus around the debate fails to acknowledge that the wage at which workers enter the US labor market is not only directly affected by the level of legal migration, as my latest arXiv paper outlines but this threshold is often set arbitrarily and may be interrelated to the overall price level, particularly in the most populous states in America.

References

Charles, K. K., and Stephens Jr, M. (2013). Employment, wages, and voter turnout. American Economic Journal: Applied Economics, 5(4), 111-143, Available at https://www.nber.org/system/files/working_papers/w17270/w17270.pdf (Accessed on 03 July 2024)

Kartik, N., Squintani, F. and Tann, K. (2024) “Pandering and Elections: Information Revelation and Pandering in Elections”, University of Warwick Working Paper Series, Available at https://warwick.ac.uk/fac/soc/economics/staff/fsquintani/research/pandering.pdf (Accessed on 03 July 2024)

Mayaki, A (2024) “Pareto-Nash Reversion Strategies: Three Period Dynamic Co-operative Signaling with Sticky Efficiency Wages”, SSRN: Optimisation & Control e-Journal, pp. 1-12, Available at https://dx.doi.org/10.2139/ssrn.4858795 (Accessed on 27 June 2024)

Pierce, S. and Selee, A. (2017) “Immigration under Trump: A Review of Policy Shifts in the Year Since the Election”, Migration Policy Brief, December 2017, Available at https://www.migrationpolicy.org/sites/default/files/publications/TrumpatOne_FINAL.pdf (Accessed on 03 July 2024)

Event Description

This symposium provides a forum for high-quality work in labour economics and brings together economists in the field from across Europe as well as key researchers from outside the region.

The event also provides an opportunity for researchers from different universities and countries to discuss their work in a relaxed atmosphere and to develop long-term collaborative relationships; and for young researchers to meet and discuss their work with senior economists.

Download programme.

Registration

• This event is free and open to all, to register please email Jemila Benchikh.

Organisers

• Alan Manning, CEPR and CEP, LSE
• Guy Michaels, CEPR and CEP, LSE
• Barbara Petrongolo, University of Oxford, CEPR and CEP, LSE

Venue

• SAL 1.04, Sir Arthur Lewis Building, 32 Lincoln's Inn Fields, London WC2A 3PH
  

Bayes’ application to HRM is limited to event probability but is a topic that is mentioned in passing in a paper on shirking and presenteeism by S. Brown (2004) recommended by Dr. Andrew Bryce (Sheffield), which was written over 20 years ago this year.

Brown (2004) reads as follows:

“Such ‘shirking’ is potentially costly to firms and may incite them to undertake monitoring. BST** envisage a monitoring technology in which there is some probability, α < 1, of each absentee’s true state of health being revealed to the firm.”

After deciding to initiate a brief scoping review for the B812 literature topic of choice (‘Wellbeing’). I thought I would check in with the blog and provide some justification and background for this choice of theme.

This spurious love affair with Bayes’ theorem has loomed over my educational learnings but only in its form as sub-game perfect in non-cooperative game theory. Big thanks to Melvyn Coles, Pierre Regibeau, and Franco Squintani for their lectures and classes from our days in Colchester on Economics. 

I started the HRM course in Nov 2023 and while I am still somewhat aware of some concepts surrounding Bayes, things have changed. Nowadays, Bayes’ theorem (10+ years on) is being used in combination with what we call supervised learning and algorithmic techniques such as neural networks.

So, how do we proceed? Perhaps, it is wise to proceed with caution. A brief scoping review will get me up to speed and updated with new research as much as is feasibly possible.

References

Brown, S. and Sessions, John (2004) “Absenteeism, Presenteeism and Shirking”, Economic Issues, 9(1), pp. 15-22 – Available at: https://econpapers.repec.org/article/eisarticl/104brown.htm (Accessed on 13 March 2024)

**Barmby, T. A., Sessions, J. G. and Treble, J. G. (1994) “Absenteeism, Efficiency Wages and Shirking”, Scandinavian Journal of Economics, 94(4), pp. 561-566 – Available at: https://www.jstor.org/stable/3440797 (Accessed on 13 March 2024)

-------

This post was written by Alfred Anate Mayaki, a student on the MSc in HRM, and was inspired by the author's previous learnings and experiences.

Dr. Andrew Bryce, the author and research academic from the University of Sheffield - who I mentioned in a previous OU Blog post, sent me this email yesterday:

"Indeed shirking and presenteeism are two sides of the same coin. As my colleague Sarah Brown shows in her paper, the problem is that true health is not observed by the employer so it is difficult to know whether a worker is shirking or genuinely too ill to work. Likewise, they don't know whether the staff who do attend work are well enough to do the work effectively. This may be even more difficult when staff habitually work remotely. So the challenge to HR practitioners is to have incentives in place to encourage sick workers to stay at home and workers in good health to come in.

I can't say much in answer to your specific question as the policies and practices adopted by firms have not been the focus of my research. You may wish to look at another paper I have recently published with the same co-authors, looking at sickness absence. In the literature review, we highlight a number of studies that look at the effectiveness of different approaches and working conditions for reducing sickness absence. I hope this will help to guide your further reading on this subject."

Lots of ways to look at this...

-------

This post was written by Alfred Anate Mayaki, a student on the MSc in HRM, and was inspired by the work of Andrew M. Bryce, Jennifer Roberts, and Mark L. Bryan (2021) in a European Journal of Health Economics article entitled, “The effects of long-term health conditions on sickness absence in the UK"