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California Economic Policy, Report

Trade with Mexico and California Jobs

By Howard J. Shatz

The increasing globalization of the U.S. economy has sparked a persistent debate over the effects of trade on labor markets, and this debate has been most heated when it involves trade between the United States and low-wage countries. This edition of California Economic Policy analyzes the effect of trade with Mexico on job loss in California. The author finds that in some sectors of the economy --- particularly manufacturing --- trade with Mexico has had a small but visible effect, but not the large-scale level of job destruction some had feared.


The Impact of Provider Choice on Workers’ Compensation Costs and Outcomes

By David Neumark, Richard A. Victor, Peter S. Barth

Medical payments for workers’ compensation are rising rapidly in many states. Exploring options to control costs, some states have passed laws permitting employers, rather than employees, to choose the medical provider in these cases. This study analyzed data from California and three other large states to see if costs and outcomes differ when employers or employees choose. It found that satisfaction with care is much higher when employees make the choice. However, there is little difference in medical and income-replacement costs, time away from work, and recovery of physical health when an employer chooses the provider or when an employee chooses a prior provider, one who has treated the employee before. In contrast, when an employee chooses a new provider, one who has not treated the employee before, costs are much higher, time away from work is longer, and physical recovery is no different than when the employer makes the choice. The results suggest that a balance can be struck between employee and employer choice. California’s recent legislation, which gives employees the right to be treated by their own (i.e., prior) physician, under certain circumstances, may have struck that balance.

This report is a joint publication of the Public Policy Institute of California and the Workers Compensation Research Institute.

California Economic Policy, Report

Are Businesses Fleeing the State? Interstate Business Relocation and Employment Change in California

By David Neumark, Junfu Zhang, Brandon Wall

A commonly heard theme in recent public debates about California's economic problems is that the state's economy is hostile to the needs of business. As evidence, it is asserted that businesses are leaving the state in droves, taking Californians' jobs. In reality, little is actually known about the trend of out-of-state business relocation. In this issue of California Economic Policy, the authors examine the phenomenon in a more complete context. They find that California does in fact lose businesses and jobs because of relocation, but the effect on employment is negligible.

California Economic Policy, Report

A Decade of Living Wages: What Have We Learned?

By David Neumark, Scott Adams

Living wages seek to raise the income of low-wage workers by mandating higher wages. However, such wage increases may also have adverse employment effects, leading employers to reduce employment of less-skilled labor. This study notes that although living wages deliver some benefits to low-income families, additional policies are needed to help the most disadvantaged.


The Dynamics of California’s Biotechnology Industry

By Nikesh Patel, Junfu Zhang

California is the birthplace of the U.S. biotechnology industry and home to a large share of the industry. The state accounts for 47 percent of national R&D spending on biotechnology and generates 53 percent of the nation’s biotech revenues. In this volume, the authors provide a detailed examination of the biotech industry in California. They look in particular at the relationship between venture capital and the formation of new firms, the entrepreneurs who start these firms, and the extent to which biotech firms are leaving California. Although more biotech establishments have moved out of California than have moved into the state, the authors point out that California’s strength in research, as well as its large share of the U.S. biotech industry, will continue to make it one of the most attractive places to form biotech companies. The state’s strong research capacity, long tradition of venture capital investment, and high quality labor pool already provide the necessary ingredients for a highly successful biotech economy.

California Economic Policy, Report

Recent Trends in Exports of California’s information Technology Products

By Jon D. Haveman, Howard J. Shatz

Documents changing patterns in California’s manufactured information technology exports during the recent boom and bust period (1997-2003). Finds that much of the decline in the total value of exports (which dropped by $25 billion or 42% between 2000 and 2003) stemmed from lower purchases of California commodities worldwide. Concludes that the vast majority of the drop-off in California’s share of U.S exports stems from redirection of purchases away from California to other states. Explores possible reasons why this has occurred.

Occasional Paper, Report

California and the Global Economy: Recent Facts and Figures

By Jon D. Haveman, Howard J. Shatz, Greg Wright

Prepared for the California Trade Education Center for presentation at the California Council for International Trade's 7th Annual California Trade Policy Forum, in San Diego, California, on February 23-25, 2005.

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