Short-Writing Assignment



Topic1: Migration

Thearticle “Is immigration really so bad?” addressed the impacts ofthe inflow of foreigners on the U.S. labor market. The article wasauthored by David Card and published in the Economic Journal in 2005.According to Card, the proportion of immigrants in different U.S.cities has increased from 9.5 % in the year 1980 to 18 % in 2000. Theconcentration of these foreigners in the cities suggests that theirmain objective of entering into the U.S. is to look for jobs, whichraises the issue of the lack of job among the semi-skilled localcitizens. However, Card (2005) argues that the percentage of schooldropouts among the population of Americans have reduced from 24.3 %to 17.7 % in 1980 and 2000, respectively. These findings suggest thatthe capacity of the citizens to supply semi-skilled labor has reducedwith time, which has created the need for immigrants to fill the gap.

Card(2005) confirms the fact that the number of school dropouts hasincreased following the rise in the rate of immigration, but itseffect on the availability of jobs and wages is insignificant. Thelack of a significant impact of immigration on the low skilled labormarket is attributed to the fact that the demand for these kinds ofjobs has increased to levels that the local population cannot meet.In addition, the ongoing changes in industrial structure have createdmore opportunities for individuals with low skills. These changeshave limited the impact of immigration on the labor market. Forexample, most of immigrants move to Texas because they are attractedby the availability of jobs that match their level of skills.

Similarly,Wolf (2015) addressed the issue of immigration, but held that itsalleged benefits are questionable. Wolf (2015) stated thatimmigration of people is part of the concept of globalization, whichimplies that it is an inevitable process. Many people move tocountries that are classified as developed because they believe thatsuch nations are safer and politically stable. In addition, most ofimmigrants are forced by civil wars and harsh economic conditions toleave their countries. However, the movement of people from one stateto another pressures the host government to increase its investmentin social services. These foreigners also increase congestion in thecountries of their destination. However, other studies show thatimmigrants reduce the percentage of dependants who are classified asolder adults since most of the incoming foreigners are of the workingage. Apart from the economic effects, the movement of people acrosscountries results in cultural influence. The culture of the localcitizens is degraded by the practices of the incoming foreigners.

Thearticle “Toward an international migration regime” addressed thekey factors that motivate people to migrate. The article was authoredby Jeffrey Sachs and published in the American Economic Review in2016. Immigration that is driven by economic reasons is attributed tothe need to search for jobs. People tend to move to regions where itis easier to get employment. However, Sachs(2016)holds that the impact of such movements on the minimum wage is stillcontroversial. The authors also held that civil wars and pooreconomic productivity force people to leave their nations.

Thearticle “Economics and emigration: Trillion-dollar bills on thesidewalk?” addressed the issue of migration from a uniqueperspective. The article was authored by Michael Clements andpublished in the Journal of Economic Perspective in 2011. Clements(2011) held that emigration of people affects the local economyreducing the size of its productive workforce that is taken countriesthat are already developed. In addition, immigration causes adecrease in minimum wake for semi-skilled workforce by one percent.However, departure of immigrants results in about eight percentincrease in minimum wage in the countries of origin Clements, 2011).

Fromthe above articles, it is evident that immigration is a process thatis directly associated with the increase in the popularity of theconcept of globalization. It has both positive and negative impactson the economy of the country of destination. The articles suggestthat the issue of its economic benefits is still controversial.However, it is evident that the overall impact of immigration dependson the quality of individuals who are moving into a given country.For example, the ability of immigrants to make a positive impact onthe economy of their host country is dependent on their academicqualifications and the level of training. It has been argued that theinflow of foreigners reduces the availability of jobs for thecitizens. However, data show that these immigrants are attracted bythe availability of vacancies, which implies that their presence doesnot affect the minimum wages or the supply of jobs for the citizens.


Card,D. (2005). Is the immigration really so bad? TheEconomic Journal,115, 1-44.

Clemens, M.A. (2011). Economicsand Emigration: Trillion-Dollar Bills on the Sidewalk? Journalof Economic Perspectives,25 (3): 83-106.

Sachs, J. (2016). Toward anInternational Migration Regime. AmericanEconomic Review: Papers &amp Proceedings2016, 106 (5): 451-455.

Wolf,M. (2015). The benefits of migration are questionable. TheFinancial Times.Retrieved September 15, 2016, from&lt


Theprocess of decision making is critical to all organizations,including business, schools, and governments. The article “FromEconomic Man to Behavioral Economics”addresses the evolution of the ideas that are used as the basis formaking different decisions. The article was written by Justin Fox andpublished in 2015 in the Harvard Business Review. Fox argued thatpeople and organizations are influenced by several schools of thought(such as decision analysis and heuristic approach) when makingchoices.

Thepurpose of Fox’s article was to help the readers make more informedchoices when selecting the approach that they apply in the process ofmaking decisions. The idea of developing schools of thought thatcould guide people in the processes of making decisions startedduring the World War II. Fox(2015) arguesthat people faced numerous challenges, such as the need to directships through safe routes, crack the code developed by the Germans,and enhance the level of quality in manufacturing. These criticalchallenges motivated people to come up with approaches that couldhelp them make viable choices in a more effective way.

Initially,scholars used the statistical approach to enhance the process ofmaking choices. However, they focused more on decision analysisapproach after the World War II. The decision analysis approach hasthree key components, including the formulation of the problem,determination of possible courses of action, and the assessment ofthe options in a systematic way. The idea of rationality in decisionmaking was introduced in the 1950s, when scholars (such asMorgenstern) held that rational behavior had to prevail in every freemarket. An economist would be expected to behave in a rational waywhen making choices.

Experimentson the impact of rationality on the way people make choices providedifferent advice from what is offered by those who use the decisionanalysis because people have dissimilar information processing skills(Fox, 2015). Thisphenomenon is confirmed by the fact that people tend to apply theheuristics approach when making decisions under circumstances thatare uncertain because they appear to offer judgments that are morereasonable. Under such circumstances, people avoid statistics andprobabilities.

Apartfrom the provision of reasonable judgments, heuristics facilitatefaster decisions. Heuristics resulted in the development ofbehavioral economics. However, decision makers who apply behavioralapproaches should be aware of the fact that heuristics can result insystematic errors that are quite severe. In early the 1950s, manypeople applied heuristics because they did not have the skills neededto make use of analytical skills. The effect of bias forces someorganizations to apply analytical skills when making decisions thatinvolve large and expensive projects. The behavioral economicperspective is preferred to complicated analytical approaches becausethey help people identify priorities within a short time.

Theinformation provided in the article indicates that the decisionanalysis approach and the application of heuristics can result inviable decisions. The application of heuristics is associated withthe bias that limits the quality of decisions. However, many peoplestill prefer the heuristic approach because it allows them to applytheir observable behaviors when making choices. The analyticalapproach is based on rationality, but it fails to account forcognitive abilities as well as the limit of time. The content ofFox’s articleindicates that none of the approaches used to facilitate the processof making choices is perfect. However, the behavioral economy ispreferred by the majority because it does not confine thedecision-makers to the principles of rationality.


Fox, J. (2015). From “EconomicMan” to Behavioral Economics. HarvardBusiness Review.Retrieved September 15, 2016, from&lt

Economicsof Addiction

Theconcept of behavioral economics can be applied in the study of drugdependence. The concept has been explained in the article “Toward abehavioral economic understanding of drug dependence: delaydiscounting process”. The article was authored by Warren Bickel andLisa Marsch and published in Addition in 2001. Behavioral economicsallow scholars to include the aspects of human conducts in the systemof constraints in order to evaluate conditions that have asignificant influence in the consumption of different commodities,including illicit substances. Drug addicts discount delayed“reinforcers”, which is confirmed by the fact that they likeimpulsive choices. The concept of discounting is founded on thenotion that current rewards tends to have a higher value as comparedto future ones.

Theapplication of the concept of impulsivity in the context of drug useimplies that addicts go for smaller, but immediate rewards as opposedto the future and large prizes. For example, the drug dependentpersons forego their significant recreation activities and careers toconsume drugs. Drugs give them smaller, but an immediate reward whiletheir career promises a large price that is delayed.

Theaspect of the loss of control is different from impulsivity. Thisdifference is explained by the fact that addicts who have lostcontrol do not show consistency in terms of selecting betweenimmediate and future rewards (Bickel&amp Marsch, 2001).In other words, an individual who has lost control may choose afuture prize (such as seeking for an employment) but later go for animmediate reward, including the absenteeism at the place of work asthey need more time to search for and consume the drugs.

Accordingto Bickel &ampMarsch (2001) theeconomics of delayed reward can be explained using severaldiscounting models. For example, the model of exponential discountingholds that one’s preference for an immediate reward remainsconstant. However, studies conducted on human as well as non-humansubjects have revealed that the discounting of impulsive behavior anddelayed rewards among addicted persons is hyperbolic.

Thehyperbolic discounting is another model that can be used to explainthe process of discounting for delayed rewards among addicts. Themodel holds that the present value of a reward reduces in aproportion that is increasingly smaller for every unit of time(Bickel &ampMarsch, 2001).The effectiveness of the hyperbolic model has been confirmed by thestudy findings reported by Bickel&amp Marsch (2001).These findings indicated that the hyperbolic equation could accountfor 80-99 % of the total variation among the opioid dependentpersons. However, the rate at which addicts perform discountingdepends on the type of reward. Bickel&amp Marsch (2001) confirmedthis notion by showing than heroin could lose about 60 % of its valuewithin a period of one year compared to promise $ 1,000 cash thatlost its worth at an insignificant rate. Therefore, the concept ofhyperbolic becomes more realistic when discounting is done on anillicit drug behind the addiction versus liquid cash. The tendency tobehave in an impulsive way has been shown to occur, even among theaddicts of substances (such as cigarettes) that are classified aslegal.

Inessence, the article provides critical information that shows thesignificance of applying the concepts of behavioral economics in thestudy of addiction. The concept of discounting provides a uniqueperspective that can be used to explain why addicted persons foregoopportunities (such as employment, good families, education, andinvestment) and decide to satisfy their craving for drugs at anycost. It is evident that addiction helps them attach more value to animmediate pleasure that is brought about by the substances that theyabuse compared to rewards that they expect to receive in the future.


Bickel, W.K. &amp Marsch, A.(2001). Toward a behavioral economic understanding of drugdependence: delay discounting processes. Addiction,96:73-86.


Thechange in climate has been an issue of concern for many years, butperfect solutions are yet to be identified. However, proposals madein the article “Market for pollution allowances: What are thelessons?” could be more viable and cost effective. The article wasauthored by Lawrence Goulder and published in the Journal of EconomicPerspectives in 2013. Goulder offers an alternative indicating thatefforts to cut the rate of environmental pollution could be assigneda monetary value and sold in the market. The possibility of marketinga reduction in emissions is made possible by the application ofcap-and-trade model. Under this model, the government is expected toset caps for emission and then allow organizations to sell theirreduction allowances to those that are not able to meet the targetsdetermined by the authorities.

Thismodel is significant because it encourages the reduction of emissionrates in areas where such measures can be achieved at the least cost.For example, organizations that are able to cut their emissions at alower cost go beyond the government targets and sell the excessallowances to those that are unable to meet the minimum requirements.This approach makes the entire processes of controlling pollution andmanaging climate change cost-effective. According to Goulder(2013) thecap-and-trade approach reduces the cost of controlling emission by15-90 %. This reduction can be attributed to several factors,including the fact that the responsibility of controlling emotion istransferred to facilities that can do it at a cheaper price. Inaddition, the cost of enforcement by the government is also minimizedbecause facilities are motivated by the monetary value to reduceemissions.

Theeffectiveness of the cap-and-trade approach can be limited by severalfactors. For an instant, it may contradict existing regulations,which limits the capacity of the stakeholders in the environmentalprotection dockets to achieve the target reduction in emission. Thevolatility of allowance prices has also been a significant challenge.

DieterHelm also proposed some strategies that can be used to minimizeemission. These strategies were published in an article “ClimateChange: How to fix it” that was published in the economist in 2012.Some of the key strategies proposed by Helm (2012) include the use ofalternative sources of energy. However, the author acknowledged thefact that most of these alternatives (including the wind energy) maybe expensive and unreliable. However, the long-term benefitsassociated with them can be more than the cost of developing them.

Helm(2012) also holds that the formulation of carbon taxes can forceorganizations to reduce their emission rates. However, Helm (2012)argues that the application of carbon taxes can be more useful thancap-and-trade. Some pollutants are quite lethal, even when they areemitted in small quantities. This makes it necessary to hold eachorganization accountable for its own emission rates. In the future,it will be important to invest in promising technologies, such asenergy storage, electric cars, and carbon capture.

Thefailure to achieve the emission reduction targets has been attributedto the lack of political will and the effective regulations. Forexample, many nations have refused to ratify and implement theregulations documented in the Kyoto accord.

Inoverall, the two articles provide practical measures that can resultin the effective regulation of mission rates. The formulation of lawsand the application of alternative sources of energy are promisingalternatives. However, it is evident that they have not beeneffective in the past. It is necessary to exploit emergingalternatives, such as cap-and-trade. In addition, the extra amountthat is invested in reviewable energy projects may be diverted tocarbon capturing and manufacturing the electric cars.


Goulder, L.H. (2013). Markets forPollution Allowances: What Are the (New) Lessons? Journalof Economic Perspectives,27 (1):87-102.

Helm,D. (2012, October 20). Climate change: How to fix it. TheEconomist.Retrieved September 15, 2016, from