Assorted links

by on February 25, 2013 at 12:15 pm in Uncategorized | Permalink

1. Scott Sumner speaks up for China, and Scott on movies.

2. On Finnish “preschool by any other name,” my previous post was wrong on this topic.

3. Paul Romer is on Twitter; so far he seems to be taking it seriously.

4. FDI performance for France, better than you might think but can it last?

5. How easily can the Fed back out of its portfolio?  Sober Look and Arnold Kling.

6. Jobs where the gender wage gap is largest and smallest.  And do the costs of minimum wage hikes fall mainly on outsiders?

7. How the Italian Senate works (doesn’t work), further explanation here, and why there was no real alternative to Monti’s Italian austerity.

Ray Lopez February 25, 2013 at 12:27 pm

@#1 : Scott sez: “Time for my annual post pointing out that the China bears were wrong once again. Chinese growth is picking up again, headed for about 8% to 8.5% this year.” but today’s news sez: “China’s HSBC Flash PMI for February falls to 50.4 from 52.3 previously and against expectations for 52.2.” Oops! Scott was fooled by randomness. Wait another month or two and let’s see.

Andrew February 25, 2013 at 12:40 pm

2. You weren’t wrong at all in essence. It’s odd that you don’t remember why you made the point. If they sold their idea as free daycare it would be completely different from their sales and marketing.

Andrew' February 25, 2013 at 1:13 pm

“So the share of Finnish children who receive some form of center-based early education before age 6 is much higher than 60 percent.”

Well, how much higher? And what form is “some form”? Precision might be kind of important considering in the US the number for 4 year olds is also “much higher” than 60%.
By 2005 sixty-nine percent, or over 800,000, four year-old children nationwide participated in some type of state preschool program (CPE, 2007).

K February 25, 2013 at 12:48 pm


“my previous post was wrong on this topic”

What about the argument in that post that the Finnish system constitutes relevant evidence on the efficacy of preschool? Or was that wrong too?

Andrew' February 25, 2013 at 12:56 pm

No, it’s not wrong.

If their Europification strategy (remember when people used to claim with a straight face that wasn’t the goal) was marketed as free daycare then that would be one thing. But the Fins $3800 per year compared to the $14000 per year that Heckman refers to are not remotely comparable.

So, Tyler’s point that FORMAL schooling starts at 7 stands erect.

prior_approval February 25, 2013 at 1:10 pm

And the formal point that the Finns consider preschool essential to their success in having the world’s best educational system as measured through PISA also remains unchanged.

But in America, who cares about results?

DocMerlin February 25, 2013 at 1:33 pm

Attempts in the US to replicate the results (Head Start) failed miserably.

Andrew' February 25, 2013 at 1:39 pm

Did you actually talk to any Finns?

Of course they ‘think’ their free daycare is essential to them being white Europeans.

“While the largely play-based Finnish early childhood model, which involves little in the way of direct instruction…”

Tyler was essentially correct, and that is NOT what Heckman and Obama are selling.

pds1979 February 25, 2013 at 1:53 pm

Per the article “Parents pay according to a sliding scale based on income, with a maximum monthly payment of 235 euros per month (about $3,850 a year, compared to over $10,000 annual cost of center-based childcare for a 4-year-old in the United States). About 15 percent of municipalities’ total spending on child care comes from parent fees.” So the total spending/child isn’t 3800. Sounds like it is >10K/year.

Andrew' February 25, 2013 at 2:37 pm

Not necessarily. The maximum payment will pay much more than the average payment.

But if you are right, they are getting ripped off for play-based daycare if it costs as exhorbitantly as the intensive remedial programs Heckman refers to.

Kj February 26, 2013 at 5:52 am

In Norway, which also puts a lot of weight on institutional childcare, quite similar to Finland. The average cost is 36K per child up to 3 years, 12% charged from the parents, and 20K from 3 to 6 years, 20% charged from the parents. This is in the extreme end of the cost spectrum in Scandinavia though.

Urso February 26, 2013 at 2:11 pm

At that point it’d be more cost effective for the government to close the centers and directly pay a full-time salary to stay at home moms (or dads).

Finnjon February 25, 2013 at 1:58 pm

As a father of two children in Finland, one of whom is going to preschool next year and the other of which is now in third grade, I think we need to be clear about what this pre-schooling education consists of:

1) Before 6 they learn nothing. They play a lot. They may learn songs which involve counting to 10 and so forth but there is nothing formal.
2) At 6 they go to now compulsory pre-school. The day has some structure but they don’t learn anything besides counting to 10 and the alphabet and “how school works”. They do not learn to read or do mathematics.
3) At 7 they go to school but their day lasts about 4 hours. They are home at lunchtime (or they go to an afternoon club).

I think Tyler’s assertion that there is no formal schooling before seven is correct. That does not mean what happens before seven is unimportant though.

N.B. The article notes that most children can read halfway through their first year and expresses surprise at this. First, many can read before they get to school because a lot of them want to – TV is subtitled you see. Second, Finnish is phonetic, so reading is pretty straightforward.

Andrew' February 25, 2013 at 2:38 pm

Thanks. I’d like a personal apology from Tyler. ;)

Kj February 26, 2013 at 5:58 am

It’s roughly the same in Norway, but they have moved the counting and learning letters down to kindergarden from the age of 4, and heavy emphasis on “social skills”, but heavier curriculum in the first year. We OTOH are not at the top of PISA rankings ;)

Kj February 26, 2013 at 6:02 am

Agreed that subtitling is probably important. I grew up in the 80s, when most programming was foreign, and it was common to have at least rudimentary reading skills before the age of 6. But this was the time of peak television…

Anon February 26, 2013 at 8:00 am

I would think that the sort of informal learning like learning to read by watching subtitles TV is most of the time more efficient than formal education. I also grew up in Finland and I learned to read by reading comics and subtitles, English by playing English computer games (nowadays many games are sadly translated to Finnish so that kids don’t learn this way anymore) and computer skills by tuning several years old crappy computer so that it could run the latest computer games.

The less you have formal education, the more the kids have time to explore the world and learn the skills they are interested in learning by themselves.

Kj February 26, 2013 at 8:25 am

Anon: my experience exactly. Most of what I remember was seriously enlightening as a kid, came through TV, ripping apart stuff, annoying adults with questions, and self-directed referencing.
Re the end of subtitling; true, and the favourite tools of, at least my kids, these days, the iPad, is IMO seems to be too intuitive and streamlined to be a substitute for the challenge of Tiki-computers and BASIC written computer games. But then again “everything was better in the old days”.

JWatts February 26, 2013 at 11:54 am

Thanks for the first hand information.

mw February 25, 2013 at 1:30 pm

I’m perennially surprised by how much more reasonable Romer is than the caricature hawked by his rabid libertarian fan-club, as that ‘privately-run city’ post makes clear.

Anon February 26, 2013 at 8:17 am

I found that interesting as well. Note the second/last comment from one of these fans, that alludes to that “voting with your feet” will be a reality when transaction costs go down. Which at least acknowledges that there are significant transaction costs and loss of utility reasons that voting with your feet isn’t as common as they’d like it to be.

TGGP February 27, 2013 at 8:53 pm

Were any of his fans portraying him as a libertarian?

Anon, yes Patri Friedman’s “Seasteading” idea is based on governance competition being insufficient and exit costs being too high (which is why modularity was a big part of the original proposal, they’ve lessened the emphasis on that recently).

DocMerlin February 25, 2013 at 1:32 pm

France has a lot of overseas “colonies” that they extracts resources from and have exclusive trade agreements with their governments.

Bender Bending Rodriguez February 25, 2013 at 3:56 pm

French Polynesia is agitating for independence, and next year New Caledonia (home of some pretty significant nickel deposits) will be holding another referendum on independence. I suspect that the Chinese will swoop in as BFF to a newly independent New Caledonia, just like they’re sprinkling money through Papua New Guinea, Solomon Islands, etc.

Andrew' February 25, 2013 at 1:45 pm

JC TC, it would be easier out here in the wilderness if we didn’t have to argue you into agreeing with you.

JWatts February 25, 2013 at 1:49 pm

#1. “5. A relatively high average IQ, FWIW.”

I was a little surprised by this comment. I’m not saying it’s wrong, but I’m surprised Scott Sumner is willing to go on record saying it.

Andrew' February 25, 2013 at 2:40 pm

Is he referring to himself?

Hamill February 26, 2013 at 5:14 am

It’s a unequivocal result of many studies, and thus hard to dispute.

Sumner didn’t say whether it’s genetic, cultural or nutrition-based (which is the real controversy).

JWatts February 26, 2013 at 11:45 am

“It’s a unequivocal result of many studies, and thus hard to dispute.”

And yet a lot of people do dispute it and/or call you a racist if you mention it.

Hazel Meade February 25, 2013 at 1:55 pm

I’m disappointed that report doesn’t list ‘engineer’, ‘IT professional’, or ‘science and academia’.

Also, if you check the report here:
… It turns out the Asians earn more than whites in management and professional occupations.

JWatts February 26, 2013 at 11:49 am

I thought that was odd also. I was curious what the figures are for Engineers. Generally, there aren’t a lot of female engineers, but there paid on the same scale for their output and experience. However, more than a few female engineers I’ve worked with work a shorter schedule than the average for their male counterparts and/or they gravitated to the larger corporations staffs which have shorter average weekly hours.

There are very few female engineers working in the smaller integration and consulting companies. Those positions require long hours and lots of travel. But pay better as a result. So I wouldn’t be surprised if the average salaries are lower.

Mike Lorenz February 25, 2013 at 4:36 pm

So the gender wage gap is the biggest mainly in professions paid via commissions? Isn’t this a little silly? Or is the argument that society (in our role as customers of real estate, securities, etc…) are discriminating on a gender basis in who we buy from? This feels like a real stretch- no?

Ziel February 25, 2013 at 8:21 pm

Right. In those occupations where the work is least structured and pay is heavily performance based, the pay gap is largest; as opposed to jobs that are most heavily managed and payscales are dictated by evil corporate patriarchies, the gaps are negligible.

Mark Twain February 25, 2013 at 7:02 pm

1) My education started at 4, as did that of my children, grand children, etc., showing that Tyler is just covering his tracks; he is bluffing when it comes to smarts

2) Why don’t we cut off voting for dullards like Tyler, who don’t start learning until they are 7? After all, I am smarter than either him or Alex or bothj

Andrew' February 26, 2013 at 3:14 am

I’m getting faster at sussing out scams. Out here in the real-world we parents have to fight the system in order to red-shirt our kids that we know are not developmentally ready for first grade. The government solution is to spend $14,000 making 4 year olds do 6 year old work so that they are prepared so that no child is left behind. Sometimes you can’t push on rope. Sure, maybe these kids with horrific parents are better off spending less time around them. And have they done the study that looks at whether a $14,000 price (not value) free-to-them causes these horrific parents to have an additional marginal child? What says the party of science?

Andrew' February 26, 2013 at 3:18 am

(yes I’m being 10% hyperbolic, and yes I understand developmental critical periods and Christ knows they don’t. Maybe socialization has a critical period- and you think The Feds are qualified to define it for every kid? God help ya’)

Woj February 25, 2013 at 9:25 pm

#5 – Sober Look says “it may take too long to “drain” these balances”

Too long for what? Under a permanent floor system the Fed can control interest rates using the IOR rate. The excess reserves merely serve to remove higher yielding (potentially riskier) assets from the private sector. Since the Fed need not worry about losses (it can operate with negative capital), the only reasons to exit the positions quicker is to dampen asset prices or return higher yielding assets to the private sector. The former case seems very doubtful as a goal of the Fed. The latter case is also unlikely since it would exacerbate the former issue. Therefore I see little reason to think the Fed will not simply allow the assets to mature, even if it takes 6-7 years or more. The Fed’s Massive Accumulation of Treasuries Won’t be Unwound

(Note: This assumes the Fed recognizes reserves do not constrain bank lending and thereby does not reduce excess reserves in hopes of reversing some fairy tale money multiplier process.)

Dismalist February 25, 2013 at 11:15 pm

Sorry friends, gotta chime in on education: The Finnish case proves what I’ve long believed–the less schooling one has, the more educated one can become!
Watch Sweden, too, which has decentralized its schooling drastically.

Willitts February 26, 2013 at 12:39 am

6. Oh give me a break.

First of all, the low wage jobs have a smaller gap because of wage compression.and far less of a premium on specialized skills. Wages close to minimum wage are going to be more uniform across geographies.

In the high wage professions, there is less compression, premium pay for more travel, and performance based compensation. Women self-select into steady paychecks rather than commission based work. The one case where I’m stunned is real estate brokers and agents. Commissions are usually fairly consistent, so variation must come from the TYPE of real estate being sold. I don’t suspect that men outnumber women in selling high priced homes, but I’m fairly sure that men dominate sales of commercial real estate.

There is no distinction made between the type of medical doctor you are in this table, but there is a HUGE difference in pay between a general practitioner and an anesthesiologist or neurosurgeon. Pharmacists are, as one would expect, quite similar in pay because there aren’t different types of pharmacists.

Almost all of the gender pay gap has been explained by factors other than gender. The women in my profession of financial services make about the same as men when they don’t interrupt their careers or leave for a more regular paycheck. The profession comes with sacrifices that many women choose not to make, and I am glad that they put their hearts into stability for their families. Men were decimated in our work force during the Great Recession, and the cuts are still happening.

Jay February 26, 2013 at 8:38 am

Proggers couldn’t pass a rudimentary statistics class to save their lives. So the left-wing media will continue to promote lies with statistics. I find it comical that the link admits that the pay gap is definitely not as big as the numbers the display, but continue anyone to show the meaningless comparison.

Mike Judge was right. We live in an Idiocracy!

axa February 26, 2013 at 6:09 am

#1b: Mr. Sumner is not inmune to error # 1 about anime: it is not (only) for kids.

“Nausicaa of the Valley of the Wind (Japanese) 3.6 The best of three Japanese anime I saw last year, all by Miyazaki. Surprisingly erotic for a kids film.”

John Schilling February 26, 2013 at 10:12 am

#6A: With the conspicuous and confusing exception of “production line inspector”, all of the high-differential jobs are ones where it is easy for a person to work eighty hours a week if they so desire (or feel compelled – I’m not defending the practice here). With the slightly less confusing exception of “counselors”, the low-differential jobs are ones where the work mostly goes away when the rest of the office goes home at 4:00.

It would be interesting to know how much of the discrepancy can be attributed to this. In principle, what we would want is the same graph where the variable is “earnings per hour actually worked”, which would be harder but not impossible to measure. I doubt the Bureau of Labor Statistics compiles that particular statistic, though.

Francesca February 26, 2013 at 10:13 am

Interesting that Tyler would say he was wrong — based on the comments of an “expert” who, according to her, spent one week in Finland studying its education system. Wow!

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