Student Research Conference: Academic Year 1992-1993

Chris Bisaillon did his honors research with Dr. Michael Seeborg on the Causes and Effects of Welfare Dependency.

ABSTRACT: The effect of welfare on work incentives has been a hotly debated topic since its inception in 1935. My research project examines the work incentive effects of an important component of the welfare system, namely Aid to Families with Dependent Children (AFDC). I have done this by analyzing data drawn from a massive database of 12,800 youths called the National Longitudinal Survey of Youth.

I primarily use two theories for my analysis: the neoclassical theory of labor supply and the welfare-disincentive theory promoted by Charles Murray. These two theories allow me to formulate and test a number of hypotheses regarding the determinants of welfare dependency. The empirical part of the paper has two purposes. The first is to identify attitudes and background characteristics that are related to welfare dependency. The second purpose is to determine how AFDC dependence in the early 1980's affected labor force participation, poverty and net income in the late 1980's.

For the most part, the results of the study reinforced my research hypothesis. For example, individuals who were AFDC dependent in the early 1980's experienced economic difficulties in the late 1980's, such as a higher incidence of poverty, lower net incomes, and fewer hours of labor supplied. This study also identified factors which make one more likely to become welfare dependent.

Douglas M. Macomber did his independent research with Dr. Margaret Chapman on High Speed Rail: Transportation Solution for the Future.

ABSTRACT: High speed rail was first introduced by the Japanese in 1964. Since then many countries, including France, Germany, Spain, Italy and Sweden have developed their own high speed rail systems. The United States has lagged behind in high speed train technology and is now faced with with serious transportation problems. Road and interstate construction and repair cannot keep pace with traffic demand. Airports have become synonymous with congestion. America has reached a crossroads in the decision of how to break the transportation gridlock that that grips our country.

This study examines the possibility of high speed rail transportation within a 300 mile radius of Chicago. Chicago has long been the hub of railroad transportation in the Midwest. The city could also serve as a center for profitable high speed rail. It has all the characteristics that make high speed rail attractive, such as a large population, a large number of cities within the said radius, congestion of other transportation modes, and good condition of existing rail lines.

This study emphasizes the routes that have the greatest potential for high speed rail implementation. Specifically, the corridors are Chicago to Milwaukee to Minneapolis-St. Paul, Chicago to St. Louis, and Chicago to Detroit. Finally, this study culminates in a comparison of high speed rail to air and highway travel.

Yuet Wei Wan did her honors research with Dr. Pamela Lowry on Political and Macroeconomic Determinants of FDI in Mexico.

ABSTRACT: Mexico is one of the largest recipients of foreign direct investment (FDI) from the developed nations. This study models the influence of macroeconomic and political factors on FDI in Mexico. The important macroeconomic variables include the growth rate of the economy, inflation and relative labor costs. The government of Mexico's debt level and the trade balance are proxies for political and economic stability. Finally, the effects of government policies that either encourage or discourage FDI in Mexico are modeled. It is hypothesized that a high growth rate, relatively low labor costs, stability and certain policy incentives encourage FDI. First, a base model that does not include Mexican government policies is estimated. Then the "policy variables" are included into the model for comparison. The data are time-series data. The model is estimated using the ordinary least squares (OLS) regression method.