by Tyler Cowen
on March 25, 2013 at 1:40 pm
1. Bryan Caplan defends the marriage premium.
2. Rethinking the water fountain (there is no great stagnation).
3. Markets in almost nothing?
4. Blood monitoring implant tells your smart phone when you are about to have a heart attack.
5. When do budget rules work?
I’m not sure they’re evidence against stagnation, but I must say that I do love those new water fountains. They have them in my gym, and they’re grand.
One advance I hated was those automatic fountains. You had to dance to trigger them and never knew when or how high it’d shoot that stream at you.
O’Hare had them around installed 2005 and a year later they had screwed out all the sensors.
I’ll second that on the water fountains. They’ve had them in the American Airlines terminal at O’Hare in Chicago for over a year and I never miss a chance to use them when I’m there.
Wow – almost like in Rome, except for being intended for indoor bottle filling.
Or to quote a British source – ‘All right… all right… but apart from better sanitation and medicine and education and irrigation and public health and roads and a freshwater system and baths and public order… what have the Romans done for us?’
I’m confused. Are you saying Germans and/or government invented these new water fountains?
Nope – it is just when you are in the old part of Rome, there are places to fill water bottles all over the place, and people filling water bottles waiting in line. Quite possibly, the idea stretches back a couple of millenia (well, not the plastic bottle part).
Germans don’t trust water fountains at all. At least any water fountain using tap water – there are springs and various mineral water places, though generally, anywhere offering mineral water also provides cups. Basically, there are no water fountains in Germany – at least none that I have seen, apart from a few places which are notable for not being exactly ‘German’ – I believe the Frankfurt Consulate has water fountains, for example.
Three very annoying things about Germany (EU?): (1) Lack of water fountains. (2) No free drinking water in restaurants (3) Department stores hiding scarce toilets deep inside their recesses
Re: marriage premium. Isn’t there a big self selection effect here? I don’t mean just that the marriage partners choose each other, but a survival bias–we are over sampling successful marriages, because ones that end in divorce don’t count the next year or any year after that as marriages. And by all accounts, unsuccessful marriages have an enormous anti-premium.
Also is the marriage premium larger or smaller now? I suspect larger, as easy divorce laws and less pressure to marry cuts down on the bad cases which would hurt the average.
I guess my question is along the lines of: just because there is a marriage premium, does that even strongly suggest that encouraging people who aren’t married to get married will transmit that premium to them? I.e. do any proponents of the marriage premium suspect that assigning unmarrieds to partners at 35 would transmit the marriage premium to them, and if not why?
These points are discussed at the link – self-selection does not explain why men would have a much larger marriage premium than women, who may not have any at all or even have a marriage penalty.
Older generations would not need such studies to prove what they already knew – that men will work harder and pursue their careers more diligently when they have a wife and children to support, and that meanwhile married women will work less and de-emphasize career advancement relative to single women.
Selection might explain that difference if what men and women were selecting for in a spouse differed.
Yes, or maybe it’s not self-selection, but just selection. If women tend more than men to select spouses at least partly based on assessment of future earning capability and/or if more women than men decide to get married at least partly out of a desire to leave the workforce, then one would expect this difference between men and women in the marriage premium/penalty.
If Therapsid’s assertion is correct — that there is a causal effect due to motivation when one has children to support — then I guess we would expect to also see a wage premium for fathers of out-of-wedlock children relative to childless single males. On the other hand, if one believes that fathers of out-of-wedlock children don’t care as much about supporting their children, then that is a selection-based argument about who decides to get married rather than a causal argument about the effect of marriage.
Of course, the recent flurry of interest in the marriage premium arose in the context of comparing the marriage premium to the college premium, specifically the tendency of most economists (and I would add non-economists too) to accept a causal explanation for the college premium, while being much more skeptical of a causal explanation for the marriage premium. That remains a valid point in my view. There are obvious selection-based explanations for both premiums. If one already believes that more people should go to college or should get married, then one tends to overlook the selection-based explanations and jump right to the causal explanations.
Of course, there is also an explanation that indicates *both* selection and causality: people that can causally benefit the most self-select into college/marriage. Thus, people that go to college, for example, could be worse off had they not gone to college, implying that there was a causal effect of college on their wages. However, people that wouldn’t have otherwise gone to college would not necessarily experience a wage increase by creating college slots for them and lowering graduation standards sufficiently to allow them to graduate.
It seems pretty clear that, in general, marriage (or partnerships) has important risk-sharing properties … there is a reduction of life variance that most people find desirable at some point. I could point to economic evidence for those claims. Therapsid’s comments sparked more of a conjecture. Men tend to be overconfident and that is not always a good thing for them. But a less overconfident spouse and the responsibilities of a family might be just the reality check they need for their overconfidence…which actually improves their economic outcomes. I have certainly seen in the comments of risk aversion questions how men pass on the big risks that they would take “if not for my kids.” Also you can think marriage is beneficial for people without forcing them to marry or penalizing them for not…no one size fits all here, just talking about averages.
Self-selection does explain it if income is a pre-requisite for marriage. A man who definitely intends to marry and have a family likely assesses his needs, and therefore his career path, differently from a man who does not want to marry. Likewise, a woman who intends to marry may simply not prioritize career advancement to the extent of one who is ambivalent about marriage.
Please note that I am speaking about people who want or don’t want to marry as if they are totally separate people, whereas they are often the same people at different stages in life. The sooner a person decides that he or she wants to get married, the sooner they adopt the relevant behavior (men kicking their careers into high gear and women de-emphasizing their careers), which will have long-lasting effects.
Sorry, I should know better than to raise to questions at once.
What about the survivor bias? We aren’t counting the negative effects of a bad marriage for nearly as long as they seem to extend. Aren’t we over weighting successful marriages in a way that might mean we get very little out of further encouraging marriage?
I think this proves the basic foolishness of only looking at money when determining happiness. To put it more bluntly, the question is why should men marry? After all, what this says is that women will push men to work themselves into an early grave – men die much earlier than women – so that women can have more time for tennis and shopping with their friends.
Now it is nice that men do that. Men should do that. But men are probably right to be wary of marriage. Especially as so many marriages are essentially sexless. Men are giving up their chance of hitting on hot co-eds, for what? Children? An early grave. But they do have the pleasure of knowing they will be supporting a woman in relative idleness come what may.
Well, married men do live longer and are happier. But why let facts get in the way of a good narrative?
Perhaps unmarried men are having such a great time burning the candle at both ends they die quicker? Married men report being happier. I would like to know how anyone knows they are.
I think the main point is that older men belonged to a generation where everyone married. Those that didn’t were alcoholics or mentally ill or otherwise problematic. Naturally they tend to die younger. That doesn’t mean it is marriage keeping men alive. We will have to see if the same is true of the 20-40 something year olds who are increasingly choosing not to get married.
Or that the men advance due to the leg up gained from having spouses subjugated to the men’s career, which explains both results.
“And even if a sensible 28th Amendment requiring budget balance were adopted, how would it be enforced? The most obvious option, enforcement by the judiciary, does not seem particularly appealing. As George Washington University law professor Alan Morrison told Congress in a November 2011 hearing on a balanced-budget amendment, the ensuing litigation would be a horrendous mess: Judges lack competency in evaluating budget projections, and our adversarial judicial system is poorly suited to the technically complex domain of budgeting.”
Really? I see no possible reason to think that leaving budgetary issues to judicial interpretation would be detrimental in anyway. Our justice system is flawless (and yes I am being sarcastic).
Oh… this is easy… having the amendment require priority based appropriation , which is to say all congressional appropriations must be strictly ordered by priority, and the executive required to disperse funds in the order specified by congress.
So if we have $100 billion in the treasury, and two appropriations:
1) for $70 billion at priority 1
2) for $70 billion at priority 2
Treasury is compelled to pay out $70 billion on item 1, and can only disperse $30 billion to item 2 because that’s all the more money there is.
Congress can set the priorities however they like… but they must have priorities in valid appropriations.
“These points are discussed at the link – self-selection does not explain why men would have a much larger marriage premium than women, who may not have any at all or even have a marriage penalty.”
Yes, but other-selection could potentially explain why man would have a much larger premium. (Serious question: What do you specifically call the type of selection that’s not self-selection, but selection by others?)
Hang on, if the marriage premium, why are all the conservative economists talking as if people should get married? Surely men should get married and women shouldn’t? (Unless you trust couples not to get divorced, in which case, I have a Leonard Bernstein opera to show you.) Is it just the case that conservative economists care a lot about advising men and not much about advising women?
Small sample size, but my wife couldn’t be happier with the ‘marriage penalty’ she suffered.
Right, unless I’m missing something it’s kind of bizarre (within the context of marriage) to talk about the man’s income and the woman’s income as if they are separate and distinct. Or to assume that the man somehow reaps the benefits of the premium. If I were single I’d have a lot more money to spend on myself, even if the numbers on my paycheck were lower.
I do not consider myself a conservative economist and I think a lot about what life choices support women. Marrying in my early twenties almost certainly lowered my lifetime earnings due to some location compromises, but it certainly raised my total lifetime utility. I still say that now sadly en route to a divorce. The marriage penalty on both sides got too big, but for a long stretch it was perfectly acceptable and gave us two wonderful kids.
Indeed, for both sexes, earnings are but a crude proxy for utility–at most, a means to an end.
You seem to be handling the divorce in stride.
Best wishes on that.
I second the best wishes.
Thank you both … it’s been almost a year since he ‘resigned’ so I am handling it much better now. I guess I am a bit more appreciative of the benefits and costs of both the married and unmarried states now, but I recognize neither always makes the most sense. I still think the decline in marriage rates is less about changing preferences or culture and more about changes in expectations and resources. Economics gives us many examples of expectations that go off tracks and I suspect this might be another.
The marriage premium link should be titled “Econlog commenters on the evidence for a marriage-wage premium”.
#1. Bryan Caplan defends the marriage premium.
Why is there no mention of basic comparative advantage?
My wife didn’t reliably pay her bills on time before we were married. I ate out all the time, because I don’t like to cook. Now I pay the bills and she cooks and I help out with the dishes. There is probably a $600 year reduction in costs from just those two factors alone.
Furthermore, after we were married, I went back to school for a second degree and then when I graduated she went back for a first. This positively impacted our log term earnings. Even if we had never married and still decided to both go back to school (which seems unlikely), we would have incurred student debt and would have had to pay interest on the debt for years.
There is a significant comparative advantage for marriage.
Your examples sound like absolute advantages. But you’re on the mark in that specialization and division of labor is one of the older explanations for the male married wage premium, and warrants mentioning.
Being told I was about to have a heart attack would definitely speed up my heart rate.
Shorter #5: Rules aren’t binding on rulemakers.
+1, yes that’s pretty much the gist of the entire article.
And if the rules are there, guess who gets to pay when the rules aren’t met. Hint, it isn’t the rule makers.
Oh come now, you act like Congress would exempt themselves from their own laws. Do you think we are some kind of banana Republic?
Bryan’s #6 seems to capture it: men who choose marriage are going to emphasize their careers more. But I would view that as selection or revealed preference as opposed to a causal effect. Single men have the option to hop in and out of jobs, if they want to work part of the year and travel part of the year, join the Peace Corps or something, or otherwise trade in and out of leisure and work, whether on a daily, monthly or yearly timeframe. Married men are committed in all sorts of ways, including to providing, which necessarily drives up their earnings relative to uncommitted workers. And there are plenty of men for whom work is not a preference, and who will work only to the minimum necessary. The minimum to provide for oneself is less than for a family. Marriage and family just raises the minimum, both in requisite dollars, and continuous time (i.e., no taking a year off to go kick it).
#3. Cool post by Noah on “incomplete markets” and non market production. Yochai Benkler addresses some of these points in “The Wealth of Networks”. Noah notes that money cannot buy things like “friendship” or “dignity” or “love” (and I would add: happiness), but how does one define such vague concepts? To paraphrase Lord Kelvin: You cannot measure or model what you cannot define.
Indeed, and what are the implications for the current focus on income/wealth inequality, especially in light of studies that have shown very little, and possibly even negative, correlation between income/wealth and happiness/satisfaction? Does government need to do more to discourage people from forming friendships with poor, happy people in favor of wealthy but lonely people?
I think the Beatles said something like that 50 years ago.
So, what we are basically saying is that gay marriage is wildly discriminatory against lesbians?
The marriage penalty for women is small, but marriage would be wildly beneficial to gay men.
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