From the information compiled the researchers

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From the information compiled, the researchers concluded that refugees in the US fully converged to the labor market outcomes of natives. a. Is this conclusion necessarily correct? If not, why? The conclusion might be misleading since some refugees might have decided to return to their countries of origin in between the census years. If those that returned had on average lower earnings than those who stayed, then we would see refugees converging as a group even if no single individual is improving her earnings in the labor market. Similarly, it could be that those who return are actually earning more, in which case we would be underestimating the degree of labor market convergence.
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University of California, Davis Santiago Perez Economics Winter 2018 Name: _____________________________ ID:_________________________________ 11 In addition to the earnings data, the researches have also collected data on the number of refugees in each census year. The researchers found that the number of refugees from the 2000 cohort has remained stable: There were 1000 refugees who entered the US in 2000, in both the 2000 and the 2010 censuses. b. Is the conclusion that refugees completely converged to natives still valid/invalid in light of this new information? Given that the number of refugees did not change from one census to the other, it must be the case that there was no return migration in between the censuses. In the absence of return migration, the conclusion of the researchers (that is, that refugees fully converged to natives) is correct since following the “2000 cohort” of refugees is exactly equivalent to following the same group of individuals over time. Assume that the US decides to change its policy with respect to refugees. In particular, instead of granting permanent refugee status, the government decides that it will only grant “temporary humanitarian protection” (up to a maximum of 1 year) to displaced individuals who apply for asylum in the US. c. What are the likely impacts of this policy change on the rate of economic assimilation of refugees? Why? A longer expected stay in the host country will lead refugees to be more likely to invest in human capital specific to the US economy. Hence, we expect that policy change like that one would result in slower economic assimilation. As refugees face a more uncertain situation in the US, they will be less likely to invest in human capital specifc to the US economy.
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