Date of Graduation

1999

Document Type

Dissertation/Thesis

Abstract

Individual states within the United States have vast and specific structural differences in their economies in general and their labor markets specifically. These structural differences may combine with federal regulation to produce results at odds with the intention of any particular federally legislated regulation. Federal minimum wage legislation and immigration policy are two examples of economic regulation that impose uniformity across the states without regard for state specific structural differences. This dissertation demonstrates that differences do exist between state economies and thus these federal regulatory activities will induce a varied set of responses. There is some theoretical basis to believe that dis-employment in connection with the minimum wage is more likely in low wage states. A fixed effects model with West Virginia county level data pooled across several years is employed in testing this hypothesis. The estimates suggest significant dis-employment is connected with the minimum wage. These significant elasticities are striking because the dependent variable is total employment not the typically analyzed teenage employment. The incentives states provide to immigrants are important since they must compete amongst themselves for skilled immigrants within the admitted pool in the United States. Among the incentives immigrants observe is welfare generosity. By employing a new data set and using Tobit analysis, estimates of location determinants can be improved relative to the limited research in this area. According to this Tobit analysis all immigrants, regardless of admission category, are welfare seeking. While nativity and population factors influence the location choice, their influence is not as powerful as welfare generosity. The Leviathan model of government applied to immigration policy in the United States describes government behavior that ignores state specific structural and labor market differences. Using a seemingly unrelated regression model, demand equations for skilled and unskilled immigrants are estimated. The empirical results provide weak support for the implications of the theoretical model. These results suggest that these federal regulatory activities can shift and cause movement along the typical demand and supply curves in local labor markets. Through these policies then, federal labor market regulation can determine the equilibrium wage and employment outcome in local labor markets.

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