Man bites dog, but this time it is good news, sort of:
For just over 10 years—121 straight months—there was one constant in the monthly jobs report: Health care jobs would go up.
Health care lost 2,500 jobs in September, the Bureau of Labor Statistics concluded in estimates released last month. And if that number stands, it would be the first net loss for the sector since July 2003.
That is from Dan Diamond.
Addendum: Revising the revision, the BLS now tells us that health care did not lose jobs after all. Dog bites man, once again, though this time with duller teeth.
There is a new paper by Lars P. Feld, Sarah Necker, and Bruno S. Frey, and here is the abstract:
This study investigates the determinants of economists’ life satisfaction. The analysis is based on a survey of professional, mostly academic economists from European countries and beyond. We find that certain features of economists’ professional situation influence their well-being. Happiness is increased by having more research time while the lack of a tenured position decreases satisfaction in particular if the contract expires in the near future or cannot be extended. Surprisingly, publication success has no effect on satisfaction. While the perceived level of external pressure also has no impact, the perceived change of pressure in recent years has. Economists may have accepted a high level of pressure when entering academia but do not seem to be willing to cope with the increase observed in recent years.
You will note that “Economists tend to report a high level of life satisfaction.” Furthermore this does not vary by gender. Here are the nationality effects:
Compared to German economists, Italian, French and researchers from Eastern European countries have a statistically signiﬁcantly lower probability to report being “highly satisﬁed” (signiﬁcant at least at the 5%-level). A similar effect is observed for economists from Spain, Portugal, and Austria; the effects are, however, at most signiﬁcant at the 10%-level. Researchers from Switzerland, North America and Scandinavian countries tend to be more happy.
For the pointer I thank Viktor Brech.
…the pace of actual trade settlement in renminbi has failed to keep up [with its role in finance]. It still accounts for just 0.8 per cent of the global total, a lower share than the Thai baht or the Swedish krona.
That is from the FT, via Amni Rusli. The recently reported fact that the renminbi is now the #2 trade financing currency seems to be simply measuring the carry trade, not the true ascendancy of the Chinese currency as a global reserve currency.
This paper (pdf) by Card, Heining, and Kline appeared earlier this year and is published in the QJE and somehow it escaped my notice. Here is the first part of the abstract:
We study the role of establishment-specific wage premiums in generating recent increases in West German wage inequality. Models with additive fixed effects for workers and establishments are fit in four sub-intervals spanning the period from 1985 to 2009. We show that these models provide a good approximation to the wage structure and can explain nearly all of the dramatic rise in West German wage inequality.
P.4 offers perhaps the most useful statement of the concrete results:
…two-thirds of the increase in the pay gap between higher and lower-educated workers is attributable to a widening in the average workplace pay premiums received by different education groups. Increasing workplace heterogeneity and rising assortativeness between high-wage workers and high-wage firms likewise explain over 60% of the growth in inequality across occupations and industries. Finally, we investigate two potential channels for the rise in workplace-specific wage premiums: establishment age and collective bargaining status. Classifying establishments by entry year, we find a trend toward increasing heterogeneity among establishments that entered the labor market after the mid-1990s, coupled with relatively small changes in the dispersion of the premiums paid by continuing establishments. The relative inequality among newer establishments is linked to their collective bargaining status: an increasing share of these establishments have opted out of the traditional sectoral contracting system and pay relatively low wages.
I would put it this way: there are “high human capital firms” and “low human capital firms” to a greater extent than before. This change represents increasing German wage inequality fairly well, although it cannot be inferred that this increasing segregation causes the inequality increase.
Since newer firms reflect higher inequality and higher segregation, and I don’t foresee a major return of unionization, I take this as prima facie evidence that wage inequality in Germany (and many other places) is likely to continue to rise. This is another example of “the great reset,” as the newer firms offer a greater glimpse into the German economic future.
By the way, it is papers like this which increase my skepticism about the signaling model of education. The relevant signals being fed into these markets haven’t changed that much. Wage patterns are changing a lot.
For the pointer I thank Christian Odendahl.
It is very important to serve up the other side of the story. Here is a 2013 paper by UCSD psychologist Hal Pashler:
While there has been much discussion of libertarians’ (generally although not universally favorable) attitudes toward liberal immigration policies, the attitudes of immigrants to the United States toward libertarian values have not previously been examined. Using data from the 2010 General Social Survey, we asked how American-born and foreign-born residents differed in attitudes toward a variety of topics upon which self-reported libertarians typically hold strong pro-liberty views (as described by Iyer et al., 2012). The results showed a marked pattern of lower support for pro-liberty views among immigrants as compared to US-born residents. These differences were generally statistically significant and sizable, with a few scattered exceptions. With increasing proportions of the US population being foreign-born, low support for libertarian values by foreign-born residents means that the political prospects of libertarian values in the US are likely to diminish over time.
The pointer is from Billy Willy. I would point out this is all the more true for the future of the economics profession, given how many recent graduate students come from outside the United States.
This picture clarifies a few neglected points:
Since 2010 there has been a marked decline in non-EU net immigration. As a proportion of non-British immigration to the UK, it has dropped from 73% in June 2010 to 57% in June 2013. In the last year alone, it has fallen from 172,000 to 140,000.
Meanwhile, this year, net migration from the EU has gone up by 72,000 to 106,000.
But, as the chart above shows, the recent increase in net EU migration has come from the older, more established (and traditionally more wealthy) EU member states (the EU15), not the new member states from central and eastern Europe that joined in 2004 (the EU8).
That is from Open Europe Blog.
In some recent work, Bosquet and Combes look at French data (only) and correlate the quality of economics departments with some of their underlying features. Why did they chose France?: “The most frequent way of becoming a full professor is via a national contest that allocates winners to departments in a largely random way.”
So what do we learn? First, large departments are in per capita terms not so much more productive and not at all doing better in terms of quality. Proximity to other economics departments also does not matter.
Heterogeneity among researchers in terms of publication performance has a large, negative explanatory power.
I suspect some of this is causal. It is good for departments to get rid of their dead wood and good when departments insist that everyone produce.
There is also this:
The second department characteristic that has the highest explanatory power of individual publication performance is the diversity of the department in terms of research fields (within economics).
I wonder there how much the allocation of researchers is truly random. I find the reverse causality story more plausible, namely that the strongest departments have the resources and heft to cover a larger number of fields, as it is less likely that having people scattered across many fields makes the department as a whole more productive.
In your spare time, you might also ponder this:
Finally, other department characteristics have interesting properties.
Contrary to common intuition, more students per academic do not reduce publication performance.
Women, older academics, stars in the department and co-authors in foreign institutions all have a positive externality impact on each academic’s individual outcome.
For the pointer I thank Mills Kelly.
From Grover J. “Russ” Whitehurst:
I see these findings as devastating for advocates of the expansion of state pre-k programs. This is the first large scale randomized trial of a present-day state pre-k program. Its methodology soundly trumps the quasi-experimental approaches that have heretofore been the only source of data on which to infer the impact of these programs. And its results align almost perfectly with those of the Head Start Impact Study, the only other large randomized trial that examines the longitudinal effects of having attended a public pre-k program. Based on what we have learned from these studies, the most defensible conclusion is that these statewide programs are not working to meaningfully increase the academic achievement or social/emotional skills and dispositions of children from low-income families.
There is much more at the link at the Brookings blog, including the major details of the Vanderbilt study, with some very useful pictures. For the pointer I thank Michelle Dawson.
From Henry Samuel, reporting some claims by Jean-Philippe Delsol:
More than half of the active French population is living off the state, according to figures in a new book by a tax lawyer seeking to explain why so many of his clients in private enterprise are leaving France.
With the country on the brink of nationwide tax revolt, Why I’m Going to Leave France, published this week, has thrown more fuel on the fire by suggesting that 14.5 million people out of the country’s 28 million-strong workforce are — one way or another— making a living off taxpayers’ money. To reach the figure, the author begins with France’s or civil servants, of which there are 5.2 million and whose number has increased by 36% since 1983. These represent 22% of the workforce compared with a European average of 15%, leading him to conclude that France has 1.5 million too many “fonctionnaires”.
He then adds the 3.2 million unemployed people in France relying on state benefits, another 1.3 million taking low-income handouts, a further two million in the “parapublic” sector — majority state-owned companies — and more than a million people in state-funded associations such as charities. Under the current Socialist government, there are 750,000 state-subsidized jobs and the author includes a million people in the agricultural sector who rely largely on contributions from European Common Agricultural Policy subsidies.
He said that the figures in his book were only logical. “When you consider that public spending in France now accounts for 57% of gross domestic product, it’s only natural that more than half of the active workforce are paid with public money,” Mr Delsol told The Daily Telegraph.
A simple theoretical first cut at these numbers suggests they bring greater cyclical stability in the short run, inferior growth over time.
For the pointer I thank the excellent MacroDigest.
From Sarah O’Connor and Chris Giles, this one is a bruiser:
The earnings of recent English graduates have deteriorated so rapidly since the financial crisis that the latest class is earning 12 per cent less than their pre-crash counterparts at the same stage in their careers. They also owe about 60 per cent more in student debt.
As Britain starts to emerge from the downturn, a Financial Times analysis of student loan data exposes the damage done to a generation of graduates, for whom a degree has all but ceased to be a golden ticket to a decent job. Tuition fees in England almost tripled last year to a maximum £9,000 a year.
…Each cohort of graduates since the financial crisis is earning less than the one before. New graduates who earned £15,000 or more in 2011-12 – enough to start repaying their loans – were paid on average 12 per cent less in real terms than graduates at the same stage of their careers in 2007-08.
This real terms fall is three times as deep as the decline in average pay for all full-time workers over the same period.
From the FT there is more here.
From Greg Toppo:
It’d be easy to conclude that school has never been a more dangerous place, but for the USA’s 55 million K-12 students and 3.7 million teachers, statistics tell another story: Despite two decades of high-profile shootings, school increasingly has become a safer place.
…By nearly every measure, safety has improved and violence has dropped for students and teachers, according to recent findings issued jointly by the Justice Department and Education Department.
The data do not include post-2011, but still the overall trends, as outlined in the longer article, seem pretty clear.
The author is Walter A. Friedman and the Amazon link is here. It is a good and readable look at a neglected corner of the history of economic thought, covering Roger Babson, Irving Fisher, John Moody, Warren Persons, Wesley Mitchell, and others. Here is one bit:
At Yale, [Irving] Fisher conducted dietary experiments with student athletes in ways that no university today would allow. These included one test that compared athletes who chewed their food thoroughly against those who did not and one that pitted the endurance of meat eaters against vegetarians. He gained enough authority as a nutrition expert for the makers of the cereal grape-Nuts to include his endorsement in a 1907 advertisement. It mentioned Fisher’s experiments on yale students “to determine the effects of the thorough mastication of food.” Fisher, the ad claimed, found that their endurance was increased 50 percent, although they took no more exercise than before and has reduce their consumption of “flesh foods” by five-sixths. Fisher also chaired a nationwide Committee of One Hundred on National Health that wrote reports and built a network of experts and public figures to agitate for “increased federal regulation of public health” — specifically, a cabinet-level department of health.
…Health, according to Fischer, deserved as much attention from economists as import and export totals.
This is a book that John P. Cullity would have enjoyed.
John Sides talks with Julio Suarez, who has been researching the topic:
Recently they don’t look much different at all. When you take the average member appointed by a Democratic president and the average member appointed by a Republican president, you observe what you expect: Since 1936, Democratic appointees are slightly more dovish than Republican appointees, although the difference is not statistically significant. The average score for a Democratic appointee is -0.22 vs. -0.08 for a Republican appointee.
There is more here, including a graph and a link to the underlying data.