ECO367H1 – Term Paper 2022
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ECO367H1 – Term Paper
2022
Part A: Questions on Advani et al. (2020)
1. To conduct this study, the authors use an administrative datasets from the UK tax authority.
(a) What are the advantages of using the HMRC data over household surveys? (b) Find two limitations of this dataset.
2. Researchers are usually unable to distinguish between natives and immigrants in tax data. Explain the authors’ approach to solve this in detail.
3. Describe the evolution of the share of migrants among top earners in the UK over the last two decades. (Maximum 100 words)
4. The authors investigate characteristics of top earning migrants.
(a) What is the share of migrant top earners working in finance?
(b) What is the industry dependency ratio? Give the number for finance and interpret.
(c) What are the conclusion of the authors when they separate earnings and investment income?
(d) Why does it matter to look at the distribution of year of arrival of migrants?
5. Explain in your own words what the “positive selection” of migrants means. (Maximum
200 words)
6. Summarize in 280 characters (a tweet) the contribution of the article.
Part B: Replication — The overrepresentation of migrants at the top of the income distri- bution in the UK
In Advani et al. (2020), the authors present a series of descriptive statistics to document the overrepresentation of migrants at the top of the income distribution in the UK (Figure 1 and Figure 2). The following steps will help you replicate these figures.
1. Open the Advani_et_al_1 database. Plot the proportion of migrants at all percentiles of the income distribution (Figure 1 a) and within the top decile (Figure 1b). To do this, use the command twoway scatter. Make sure you use the options of twoway to
specify the x-axis (xtitle()), the y-axis (ytitle()), the title of the graph (title()), the labels of each line using legend(label()) and the vertical line indicating the change of scale (xline()). Save your graph and include it to your answers.
2. Open the Advani_et_al_2 database.
(a) What is the average share of income in top fractiles that goes to migrants for the
period 2000-2010?
Hint: use the command summarize x if y >=a & y<b
(b) Plot the the share of income in top fractiles that goes to migrants (Figure 2 c). To do this, use the command twoway (connected...) with the variable prop_income. Note that you can add several connected lines to the same graph. Try to use the option yscale(r(x y)) to use the same scale as in Advani et al. (2020) for the y-axis .
Hint: Remember to use the command destring to turn string variables into nu- merical variables for the plot.
Part C: Policy evaluation — The distributional consequences of immigration in Canada
On October 30th, 2020, the Federal government announced a three-year immigration plan whose goal is to invite skilled workers, family members and refugees into Canada. The Immi- gration Minister announced a target of 1.2M immigrants in next 3 years.
The Federal government asks you to conduct a study investigating the effect of this plan on income inequality. To do so, you are granted access to the Longitudinal Administrative
2022-02-21