Data Source

Claudia Sahm has given us the link (pdf) for Guvenen, Kaplan, and Song, David Wessel the summary.  The paper abstract is this:

We analyze changes in the gender structure at the top of the earnings distribution in the United States over the last 30 years using a 10% sample of individual earnings histories from the Social Security Administration. Despite making large inroads, females still constitute a small proportion of the top percentiles: the glass ceiling, albeit a thinner one, remains. We measure the contribution of changes in labor force participation, changes in the persistence of top earnings, and changes in industry and age composition to the change in the gender composition of top earners. A large proportion of the increased share of females among top earners is accounted for by the mending of, what we refer to as, the paper floor — the phenomenon whereby female top earners were much more likely than male top earners to drop out of the top percentiles. We also provide new evidence at the top of the earnings distribution for both genders: the rising share of top earnings accruing to workers in the Finance and Insurance industry, the relative transitory status of top earners, the emergence of top earnings gender gaps over the life cycle, and gender di erences among lifetime top.

David pulls this out:

A trio of economists, wielding big data from Social Security’s records, says that in 1981-85, women constituted just 1.9% of the top 0.1% of earners (based on average earnings for those years) and 5.2% of the top 1%.

But a quarter-century later, in 2008-12, women were 10.5% of the top 0.1% and 27.5% of the top 1%.

Deconstruction of the EU’s actual greenness must start by separating old renewables from new renewables — an essential task because in most countries the old renewables still provide the largest combined contribution in the green category. Readers of European news might be forgiven if they thought that wind turbines and PV panels, both heavily promoted and subsidized by many governments, lead the charge toward the continent’s renewable future. Actually, “solid biofuels” continue to be by far the largest category. In plain English, solid biofuels are wood, the oldest of fuels, be it trunks directly harvested for heat and electricity generation and burned as chips, or large amounts of wood-processing waste — a category particularly abundant in the EU’s two Nordic members with large forestry sectors. In 2012, 80 percent of Finland’s and 52 percent of Sweden’s renewable energy came from wood, and the average for EU-28 was 47 percent; even for Germany, the most aggressive developer of wind and solar, it was about 36 percent.

Burning logging and wood-processing wastes make sense; importing wood chips from overseas in order to meet green quotas does not. In 2013, the EU was burning more than 6 million tons of imported wood pellets. According to Forests and the European Union Resource Network, if all the EU states were to meet their 2020 green quotas, some of them would have to burn 50-100 percent more wood than they did in 2010. Imports now come mostly from North American and Russian forests, but Brazil is considered as the best source for future imports.

The irrationality of wood-based electricity generation is perhaps best illustrated by the conversion of Britain’s largest, originally coal-fired station to burning wood chips: initially they were to come from Brazil, but eventually more than 6 million tons a year will come from the swamp forests of North Carolina and tree plantations in Georgia. And wood-burning electricity generation would not be carbon-neutral even if all the trees cut down for chips were promptly replanted and if all of them regrew quickly and completely: more trees would have to be planted in order to offset carbon released by fossil fuels used in harvesting, processing, and intercontinental transportation of imported wood.

That is from Vaclav Smil, there is more here.

Chores down, child care up

by on September 28, 2014 at 3:11 pm in Data Source, Economics, Web/Tech | Permalink

There is evidence that technology has already made household chores much less time-consuming. Parents together now spend 27.6 hours a week on chores, down from 36.3 in 1965, according to data from the American Time Use Survey and Pew Research Center. Some of their new free time is being spent on their children. They spend 20.8 hours a week on child care, up from 12.7 in 1965.

That is from Claire Cain Miller, most of the piece is about the economies of paying people to ship your goods for you.

Eliminating heterogeneity bias causes 97 percent of the variance in the price level of food products across cities to disappear relative to a conventional index. Eliminating both biases reverses the common finding that prices tend to be higher in larger cities. Instead, we find that price level for food products falls with city size.

That is part of an abstract and new paper from Jessie Handbury and David E. Weinstein, via Kevin Lewis.  They have two additional interesting papers on the cost of living here.

Indian average is over

by on September 23, 2014 at 8:28 am in Current Affairs, Data Source, Economics | Permalink

The richer states have, on average, experienced relatively faster per capita GDP growth than the poorer states, despite the strong performance of low income states such as Bihar, Orissa and Uttarakhand. The reality is that the pace at which richer states are pulling away appears to be increasing.

That is from David Keohane at the FT, two excellent maps at the link as well.

Are stock buybacks too high?

by on September 22, 2014 at 2:08 am in Data Source, Economics | Permalink

Edward Luce writes in The Financial Times:

According to William Lazonick, a scholar at the University of Massachusetts Lowell, seven of the top 10 largest share repurchasers spent more on buybacks and dividends than their entire net income between 2003 and 2012. In the case of Hewlett-Packard, which spent $73bn, it was almost double its profits. For ExxonMobil, which came top with $287bn in buybacks and dividends, it amounted to 83 per cent of net income. Others, such as Microsoft (125 per cent), Cisco (121 per cent) and Intel (109 per cent) were even more extravagant. In total, the top 449 companies in the S&P 500 spent $2.4tn – or more than half their profits – on buybacks in those years. They spent almost the same again in dividend payouts. Taken together, they came to 91 per cent of net income.

There is more here.  I would read the data this way: the rents earned by those companies stem from their preexisting intellectual property, rather than from their current managerial talents.

We again looked at those individuals moving into and out of the finance sector, but this time restricted the sample only to those doing a job with the same title in both the finance and non-finance sectors, focusing on generic job titles such as ‘function manager’, ‘ICT professional’, ‘secretarial’, ‘customer service’ etc. The results reveal that the same people doing the same job earn around 20% more when doing that job in the finance sector rather than the non-finance sector. This premium is observed to be remarkably similar whatever job title is considered – whether it is a typically high-paid or low-paid job. This suggests that the pay premium is ubiquitous across all individuals working in the finance sector. This idea is further supported by looking at the wage premium at various points of the wage distribution. Although the finance sector pay premium is observed to be the largest between high earners in the finance and non-finance sectors – at the top end of the wage distribution – it is certainly the case that it is also observed throughout the full distribution.

That is from Joanne Lindley and Steven McIntosh, there is more here.  As you will grasp from basic microeconomics, this is evidence of rents and rent-sharing in the financial sector, a conclusion which the authors second.

The median household income in the city of New York is a few hundred dollars a year more than the median household income in the state of Texas, but in practical terms the average New York City household is much worse off.The most obvious issue is the cost of housing, which for New Yorkers is about four times what it is for Texans.

That is from Kevin Williamson, who stresses that New York City is actually a relatively poor place.

By the way, New York and DC have Ginis reflecting more inequality than what we find in Mexico or Nigeria.  Manhattan and Putnam County, Tennessee have Ginis almost as high as that of South Africa.

Have I mentioned that a Gini coefficient isn’t a very good measure of inequality for most purposes?  It does not command much loyalty from people who actually work in that area (generalized entropy measures are much more popular), yet it has become a staple of discussion in popular economics.

Jennifer Schuessler at The New York Times reports on the work and new book of Dan Jurafsky:

In a study of more than a million Yelp restaurant reviews, Mr. Jurafsky and the Carnegie Mellon team found that four-star reviews tended to use a narrower range of vague positive words, while one-star reviews had a more varied vocabulary. One-star reviews also had higher incidence of past tense, pronouns (especially plural pronouns) and other subtle markers that linguists have previously found in chat room discussions about the death of Princess Diana and blog posts written in the months after the Sept. 11 attacks.

In short, Mr. Jurafsky said, authors of one-star reviews unconsciously use language much as people do in the wake of collective trauma. “They use the word ‘we’ much more than ‘I,’ as if taking solace in the fact that this bad thing happened, but it happened to us together,” he said.

Another finding: Reviews of expensive restaurants are more likely to use sexual metaphors, while the food at cheaper restaurants tends to be compared to drugs.

Previous MR posts on Jurafsky are here.

I remain amazed that we have as much free trade as we do.  Here is from a recent Pew poll:

President Barack Obama and other world leaders are having a tough time selling the benefits of the trade agreements they’re negotiating, in part because much of the public thinks all the talk about trade’s benefits is a bunch of baloney.

Out of 44 nationalities surveyed this year, only one — Israelis — tends to believe the basic tenet of economists that increased trade will foster competition and deliver lower prices for consumers.

On a broader question of whether increasing trade and business ties with other countries is a good thing, only 68% of Americans agree, compared with 76% worldwide, according to the study released Tuesday by the Pew Research Center.

The Pew study itself is here and it is interesting throughout.  It is in Bangladesh, Uganda, and Lebanon that people are most likely to believe trade raises real wages, and Bangladeshis are most sympathetic to foreign direct investment.  Only 28% of Americans believe it is good when foreigners buy up U.S. companies.  58% of Chinese think trade leads to price increases, perhaps a sign of the prevalence of foreign luxury goods in that country.

For the pointer I thank Ray Lopez, who himself benefits from free trade, factor mobility, and foreign direct investment.

America facts of the day

by on September 5, 2014 at 2:13 am in Data Source, Economics, Uncategorized | Permalink

A longer-term perspective shows that the median American family income has declined about 12.4 per cent since the peak in 2004…

There is also this:

For a brief time, the Midwest was the best-off region but median incomes there have fallen by a staggering 23 per cent since 2001…

Median net worth is down forty percent from its peak (“we’re not as wealthy as we thought we were”), yet the top three percent has done quite well.  And in case you are thrilled about the recent economic recovery:

The most striking finding is that the median American family earned 5 per cent less in 2013 than in 2010 after inflation even though the average American family took home 4 per cent more.

None of this is especially new, but these are the latest numbers and it is remarkable how much they confirm some of the more pessimistic readings of recent American history.

From Matthew C. Klein at FTAlphaville, there is more here.

If Scotland goes independent

by on September 4, 2014 at 12:11 am in Current Affairs, Data Source | Permalink

Goldman Sachs has warned that the UK could fall into a eurozone-style crisis if Scotland votes for independence later this month.

In some of the most bleak predictions economists have made about independence, the Wall Street bank said a “Yes” vote on September 18, while looking unlikely, “could have severe consequences” for both the Scottish economy and the UK overall.

Goldman warned that public services would have to be cut if Scotland goes it alone, and that the country would face much higher borrowing costs.

But the most worrying consequence, the bank predicted, would be that uncertainty over a currency union would cause a run on sterling and a capital flight with echoes of the eurozone crisis.

“The most important specific risk, in our view, is that the uncertainty over whether an independent Scotland would be able to retain sterling as its currency could result in an EMU-style currency crisis occurring within the UK,” wrote Kevin Daly, senior economist at Goldman.

Here is more, from James Titcomb.  You should consider that speculative, but it is worth putting on the table.

I did not expect to be reading this within my lifetime, and yet here it is:

Medicare spending isn’t just lower than experts predicted a few years ago. On a per-person basis, Medicare spending is actually falling.

That is from Margot Sanger-Katz, there is more here.  Do please note that the program still faces fiscal pressures, in part due to the ongoing rise in “n,” namely future program beneficiaries.

Ing-Haw Cheng, Sahil Raina and Wei Xiong have a new paper in the AER, here is the abstract:

We analyze whether mid-level managers in securitized finance were aware of a large-scale housing bubble and a looming crisis in 2004-2006 using their personal home transaction data. We find that the average person in our sample neither timed the market nor were cautious in their home transactions, and did not exhibit awareness of problems in overall housing markets. Certain groups of securitization agents were particularly aggressive in increasing their exposure to housing during this period, suggesting the need to expand the incentives-based view of the crisis to incorporate a role for beliefs.

There are other versions of the paper here.

It seems to be economic policy orientation toward Europe or Russia, and not either language or ethnicity.  Here is a new paper by Timothy Frye:

Language, ethnicity, and policy orientation toward Europe are key cleavages in Ukrainian politics, but there is much debate about their relative importance. To isolate the impact of candidate ethnicity, candidate native language, and candidate policy orientation on a hypothetical vote choice, I conducted a survey experiment of 1000 residents of Ukraine in June 2014 that manipulated three features of a fictional candidate running for parliament: 1) ethnicity as revealed by either a Russian or Ukrainian name 2) native language of Russian or Ukrainian and 3) support for closer economic ties with Russia or with Europe. The results reveal little difference in the average response to these 8 fictitious candidates despite the candidate’s different ethnicities, native language, and economic policy orientations. This seeming homogeneity masks vast differences in the responses of self-reported native speakers of Russian and Ukrainian. Analyzing the responses among Ukrainian and among Russian speakers yields considerable differences in the responses to the different candidates. Perhaps most striking is that among both native speakers of Russian and native speakers of Ukrainian a candidate’s economic policy orientation toward Europe or Russia appears to be a more important determinant of vote choice than a candidate’s language or ethnicity. That policy retains its importance for voters despite the intense politicization of both ethnicity and language and ongoing violence in eastern Ukraine suggests that vote choice in Ukraine has not been reduced to an ethnic or linguistic census.

Hat tip goes to www.bookforum.com.