In and Out of the Ethnic Economy: A Longitudinal Analysis of Ethnic Networks and Pathways to Economic Success across Immigrant Categories1

The economic benefits to immigrants of taking jobs in ethnic workplaces, relative to the open economy, are heavily debated. We examine longitudinally differences across immigrant categories in how the choice of ethnic or non‐ethnic workplace influences the ethnic composition of social networks and how these factors impact immigrants’ economic success. Using the Longitudinal Survey of Immigrants to Canada, with data 6 months, 2 years, and 4 years after arrival, we find support for both sides of the ethnic economy debate when it is qualified by immigrant category. While economic immigrants benefit from non‐ethnic workplaces, family immigrants face economic penalties in the open economy and do better in ethnic workplaces. We argue that policies sorting immigrants into visa categories do much of the work of leading them into segmented paths of incorporation.     

Assessing and Improving the Performance of Nearly Efficient Unit Root Tests in Small Samples

Abstract

The development of unit root tests continues unabated, with many recent contributions using techniques such as generalized least squares (GLS) detrending and recursive detrending to improve the power of the test. In this article, the relation between the seemingly disparate tests is demonstrated by algebraically nesting all of them as ratios of quadratic forms in normal variables. By doing so, and using the exact sampling distribution of the ratio, it is straightforward to compute, examine, and compare the test' critical values and power functions. It is shown that use of GLS detrending parameters other than those recommended in the literature can lead to substantial power improvements. The open and important question regarding the nature of the first observation is addressed. Tests with high power are proposed irrespective of the distribution of the initial observation, which should be of great use in practical applications.     

Book Reviews

Statistics for Engineering Problem Solving.: Stephen B. Vardeman. Boston, MA: PWS Publishing, 1994. 840 pp. $59.95. Reviewed by Soren Bisgaard

A Data-Based Approach to Statistics.: Ronald L. Iman. Belmont, CA: Wadsworth Publishing, 1994. xiv + 898 pp. $51.95. Reviewed by Katherine Halvorsen

Concepts in Probability and Stochastic Modeling.: James J. Higgins and Sallie Keller-McNulty. Belmont, CA: Duxbury Press, 1995. xi + 420 pp. $67.43. Reviewed by David M. Nickerson

Statistics (6th ed.).: James T. McClave and Frank H. Dietrich II. New York: Dellen/Macmillan College Publishing, 1994. xix + 967 pp. $66.00. Reviewed by Katherine Halvorsen

Data Analysis for Monitoring Human Rights.: Herbert Spirer and Louise Spirer. Washington, DC: American Association for the Advancement of Science, 1994. xiv + 126 pp. $15.00. Reviewed by Diane G. Saphire     

The debt trap: A two-compartment train wreck… and how to avoid it

We explore sustainable paths out of a debt trap with a highly stylized two-sector differential equations model for the stocks of money in Government and Society. The model fits the data for the U.S. between 1981 and 2012 with a coefficient of correlation of 0.996. The solutions provide detailed “escape conditions” from the debt trap. A primary surplus is required. Then a government can escape its debt trap either through sustained annual monetary outflows from society to the government (taxation) but with a low initial growth rate, or through annual monetary inflows into both sectors (stimulus) with higher initial growth rate. We illustrate the use of our model with simulations which show how five indebted countries can escape their debt trap in 30 (or 70) years.