Volume 9

Spring 2011 Edition


The Amnesty Effect: Evidence from the 1986 Immigration Reform and Control Act

Joshua Linder

The 1986 Immigration Reform and Control Act (IRCA) marked one of the biggest changes in the history of U.S. immigration policy. One of the main provisions in the legislation was a legalization program that granted amnesty to undocumented immigrants who could prove they had resided in the U.S. continuously since January 1, 1982. This study evaluates the impact of mass-legalization on the flow of undocumented immigrants across the U.S.-Mexican border by analyzing a monthly time series of Border Patrol apprehensions from January 1977 to December 2000 within the context of a multivariate regression model. In sharp contrast to previous studies that examine the immediate effects of IRCA on illegal immigration, this paper focuses on the long-term impact of the amnesty provision. Controlling for factors that influence the flow of illegal immigrants, including relative economic conditions in the U.S. and Mexico, the level of border enforcement, economic liberalization through trade, and seasonal fluctuations in the demand for agricultural labor in the U.S., I find that the IRCA amnesty program is associated with a decline in the number of border apprehensions. Although using apprehensions as a proxy for the flow of illegal immigrants precludes the analysis from estimating the exact magnitude of this effect, the findings refute unsubstantiated claims that the amnesty program encouraged further illegal immigration.

Health Insurance Choice, Moral Hazard and Adverse Selection: A Study of the Chilean Case Using Panel Data

Javier Bronfman

Using panel data from Chile’s National Socio-Economic Characterization Survey 1996-2001-2006, this article examines health insurance choice and its dynamics. The article takes advantage of the panel data to examine the dynamics and determinants of insurance change. Evidence indicates that private insurance is losing customers to the public sector. Two analyses are undertaken in the article using logistic regressions. For each of the three years studied, the paper looks at insurance choice and its determinants. Income seems to be highly important in determining the choice, as well as age, education, gender, geographical location and health shocks. Evidence of moral hazard and adverse selection was found in the longitudinal and cross-sectional analysis. The results of this research are aligned with most of the previous investigations done on Chile’s health insurance system and advance previous knowledge on the topic by including the dynamism that panel data permits.

China, Multinational Corporations, and Internet Privacy Issues: An Incoherent Landscape

Lysette Kent

In the mid-2000s, staff at the Chinese division of Yahoo! sent information on one of its users, Shi Tao, to the Chinese government. The journalist had been critical of the Chinese government, and, based on the information sent to the government, Shi Tao was sentenced to ten years in prison. In 2010, e-mail accounts housed by Google were hacked. Many of these accounts belonged to human rights activists. Issues like these pose a conundrum for the United States and international entities that are looking to prevent human rights abuses, including violations of privacy, in countries such as China. This paper will evaluate current and proposed efforts to curb such actions by the Chinese government. I propose the following three-pronged approach to deal with these actions: 1) a vigorous naming, blaming, and shaming campaign; 2) the adoption of a uniform policy by the United States government for addressing the Chinese government on these issues; and 3) the development of coherent, enforceable, and specific codes of conduct by trade associations and business groups that discuss issues of censorship and privacy regarding the internet, their customers, and foreign governments.

Fiscal Implications of Legislative and Executive Team Limits at the State Level

Dillion T. Klepetar

Proponents of term limit legislation have long maintained that these institutional constraints would end the era of the “career politician”. One justification for doing away with senior representatives is the argument against a culture of spending that supposedly indoctrinates the longest-serving members in government who seek reelection regularly. Recent work has demonstrated that the adoption of term limits had the unintended consequence of increasing spending levels—a finding which would surprise diehard advocates of the reform. As with all scientific findings which are incorporated into our working knowledge, findings must be consistent across empirical studies. Questions that seek to better understand how fiscal appropriation responds to institutional changes are perhaps the most important to theory-building and are therefore worth revisiting. Using a set of economic and political indicators, to include legislative and gubernatorial term limits, captures much of the variance we observe in state expenditures. In contrast to previous research, results here indicate that term limiting legislators does not affect overall state spending at traditional confidence intervals. Moreover, improvements to previous models suggest that term limits have a differential effect on expenditures when imposed on state senators, state house members, and governors. This pattern is not surprising given that member goals are shaped by their unique institutional orientation, which responds to rule changes in equally distinctive ways.

Are Cigarette Excise Taxes Effective in Reducing the Habit?

Michael Palinkas

Existing research has shown that increasing cigarette taxes, and thus increasing the price of cigarettes per pack, has had a decreasing effect on the percent of adults who smoke, but only to a certain degree. Increasing the total price per pack of cigarettes and utilizing the tax revenue to fund anti-tobacco programs has been the mission of policymakers in all 50 states and the District of Columbia since 1988. These methods may no longer be efficient, as evidenced by the fact that many individuals still choose to smoke. This study sought to find any additional factors that may affect the percentage of adults who smoke. The study looked at the effects of four variables on the percent of the adults who smoke: cigarette tax per pack, cigarette price per pack, median income, and the number of smoking-related deaths in 2005. Findings indicated that neither the tax per pack of cigarettes nor the price per pack has a statistically significant association with the percentage of adults who smoke. The number of deaths attributed per year to smoking also failed to affect the percentage of adults who smoke. In our statistical tests, median income was the only variable to have a significant association with the percentage of adults who smoke. Using a multivariate regression model, a $10,000 increase in median income is associated with an average decrease of 2 percent in the percentage of adults who smoke, while all other variables remain constant.

Budget and Cost Analysis for the Proposed Rappahannock-Shenandoa-Warren Regional Hall

Matthew Reges

Rappahannock, Warren, and Shenandoah counties are rural localities in the northwestern part of Virginia. They have begun work on a regional jail to house criminal defendants and misdemeanor convicts. Each county currently has a county jail, all overcrowded and aging, and the small size of each precludes most rehabilitative programs for inmates. Many other rural counties, including many around these three, have partnered to create regional jail authorities to recognize economies of scale. Rappahannock, Warren, and Shenandoah have begun to do the same. This budget and cost analysis finds that at 100% capacity in the FY 2015 year, the RSW Regional Jail can operate at an annual cost of $110.86 per inmate-day; at 120% capacity, operating costs fall to $102.79. These costs are considerably higher than what the three localities currently pay, and the regional jail may prove more expensive for the counties, even considering state aid. The jail will have excess capacity, and Northern Virginia suburbs will pay to unload their crowded jails, but the rural budgets may still feel significant strain compared to the status quo. However, the regional jail will be able to offer superior inmate programs, including GED classes, language classes, work release to local businesses, and gardening. Quantifying these benefits’ value is difficult, so I cannot conclusively endorse the regional jail. Renovating and expanding the county jails may provide a better value and less risk.

The Flat Tax: An Analysis of America’s Most Controversial Tax Reform Ideas

Lane B. Teller

Since its inception nearly a century ago, the federal income tax has experienced various waves of reform, each time government hoping to finally optimize its use. Dreams of a simplified, flat rate structure have intrigued lawmakers for years, and with the same set of issue champions again lobbying for its use, calls for reform enter the policy debate. This paper examines the merits of a proposed flat tax, starting with a brief history of the federal income tax in the U.S., then moving to a review of the basic premise for a flat rate structure and the Hall-Rabushka framework, and concluding with a critical analysis across the competing objectives of equity, efficiency, yield, cost, and feasibility. As a concept, the flat tax is impressive. As a practical policy, however, it leaves much to be desired. Its proposed simplicity must be met with great scrutiny, as it remains to be seen whether such an untried system can function exactly as theorized.