Law

Adam Ozimek reports:

A 2002 paper from Kossoudji and Cobb-Clark found that following the 1986 illegal immigrant amnesty, the wages of those amnestied rose 6% between 1989 and 1992. They found that the majority of the wage penalty of being illegal is due to an inability to move between occupations.

…The effect this will have on labor markets is complicated slightly by the fact that it’s not really a full amnesty. Instead it’s really a three year promise to not deport, and a three year work permit.

There is more here.  The original research is on JSTOR here.

Robin Hanson reports:

My last post got me thinking about the liberal vs. conservative slant of different jobs. Here are two sources of data.

Consider some jobs that lean conservative: police, doctor, religious worker, insurance broker. These seem to be jobs where there are rare big bad things that can go wrong, and you want to trust workers to keep those from happening. That explanation can also makes some sense of these other conservative jobs: graders & sorters, electrical contractors, car dealers, truckers, coal miners, construction workers, gas service station workers, non-professor scientist. Conservatives are more focused on fear of bad things, and protecting against them.

Now consider a set of jobs that lean liberal: professor, journalist, artist, musician, author. From these you might focus on the fact that these jobs have rare but big upsides. So the focus here might be on the small chance that a worker will be come a rare huge success. This plausibly seems the opposite of a conservative focus on rare big losses.

But consider these other liberal jobs: psychiatrist, lawyer, teacher. Here the focus might be just on people who talk well. And that can also make sense of many of the previous list of liberal jobs. It might also makes sense of another big liberal job: civil servant.

I’m not suggesting these are the only factors that influence which jobs are liberal vs. conservative, but they do seem worth exploring.

Which other factors might help explain the distribution of conservative vs. liberal jobs?

Somsook Boonyabancha

by on November 18, 2014 at 3:13 am in Economics, Law | Permalink

She has a new idea:

Somsook is developing the methodology for “land-sharing”, an urban land use innovation built around a mutually beneficial deal between urban squatters and the owner of the land who wishes to develop for commercial purposes. The slum dwellers get new, better, if more dense housing on a back portion of the plot in dispute, and the owner gets the street-front portion freed for immediate development. Everyone wins. The slum dwellers get more than quality housing at agreed affordable cost and they become legal and secure. They also emerge, in Somsook’s way of orchestrating such deals, organized and able not only to negotiate but to go on and deal with other problems.

The owners and developers rescue most of the value of their investment opportunity, which otherwise very probably would remain mired in a limitless quicksand of politicized conflict. Such conflict produces only costs and is painfully un-Thai. Somsook’s win-win land-sharing deals also helps the cities: ending the stalemate which has been immobilizing important properties facilitates more rational, efficient urban development.

That is from this Ashoka site, there is a video here, there is an interview here.  For the pointer I thank Janet B.

2015 Law and Literature reading list

by on November 18, 2014 at 1:26 am in Books, Education, Film, Law | Permalink

The New English Bible, Oxford Study Edition

The Law Code of Manu, Penguin edition

Njal’s Saga (on-line version is fine)

Lawyer Poets and that World Which We Call Law, edited by James Elkins

Glaspell’s Trifles, available on-line.

The Metamorphosis, In the Penal Colony, and Other Stories, by Franz Kafka, edited and translated by Joachim Neugroschel.

In the Belly of the Beast, by Jack Henry Abbott.

Conrad Black, A Matter of Principle.

Sherlock Holmes, The Complete Novels and Stories, Sir Arthur Conan Doyle, volume 1.

I, Robot, by Isaac Asimov.

Moby Dick, by Hermann Melville, excerpts, chapters 89 and 90, available on-line.

Year’s Best SF 9, edited by David G. Hartwell and Kathryn Cramer.

Death and the Maiden, Ariel Dorfman.

The Pledge, Friedrich Durrenmatt.

E.M. Forster, A Passage to India.

Haruki Murakami, Underground.

Honore de Balzac, Colonel Chabert.

Toer, Pramoedya Ananta, House of Glass.

M.E. Thomas, Confessions of a Sociopath.

Films: A Separation, Memories of Murder, other.

Podcast: Serial

If you are eligible (economics graduate students have taken it in the past), do take my class, I am very happy to have you there.

This passage is from Gao Wenqian’s Zhou Enlai: The Last Perfect Revolutionary:

Doctors in China could not conduct major medical procedures on top leaders without the approval of the Politburo Standing Committee.  Such was the long-standing rule.  Thus, in 1975, Deng Ziaoping and Marshal Ye Jianying, leaders among the old CCP cadres who had generally despised the Cultural Revolution and had shown little enthusiasm for the political style of the mercurial Jiang Qing, now had to negotiate emergency surgery for Zhou Enlai with her allies Wang Hongwen and Zhang Chunqiao.  For once, these tough political adversaries managed to see eye-to-eye.  They all gave their consent to surgery and sent their decision to Mao, who always had the final say.

Zhou Enlai had four operations before dying of cancer.  For the last two operations, however, Mao instructed the doctors to tell Zhou that in fact he was being cured and the tumors were removed.  He ceased to believe that when the unbearable pain arrived.

We’ve now seen a good twenty-five years of autocrats backing down, ceding power, and refusing to escalate, starting  around 1989 if not earlier.  Arguably North Korea and Saddam Hussein have been partial exceptions, but even there North Korea has stayed in its shell and Saddam had in fact largely disarmed his WMD.  We also see many autocrats — most notably those of China — who pursue remarkably sophisticated courses of action.  Just think how much more deftly they handled Occupy Hong Kong than the Ferguson police dealt with their situation.  Even the Iranian leaders seem quite sophisticated, even though most of us do not share their goals or endorse their means.

I call it The Great Autocrat Moderation.

If we look back in history, are autocrats generally this rational and conciliatory?  I am struck reading the new Andrew Roberts biography of Napoleon how he grew drunk with success and overreached and of course eventually failed (twice).  Mussolini, Hitler, Stalin, and Mao are some additional obvious examples of autocrats who, in terms of procedural rationality, simply collapsed at some point and very dramatically overreached.

Of course these are tricky examples.  The most famous autocrats are arguably going to be more subject to overreach, which in part drives their fame (infamy), and so if we consult our historical memories we may be selecting for overreach.  Your typical earlier autocrat may have been more rational than this list of ambitious tyrants might imply.  Was the typical dictator of Paraguay, historically speaking, really so irrational?  Still, it does seem that autocrats have been relatively benign as of late.

So how about Putin?  Is he like the autocrats of the last twenty-five years, or he is more like Napoleon and Mussolini with regard to his long-term procedural rationality?

I do not myself expect The Great Autocrat Moderation to continue for much longer. Let us not forget that some autocratic “tournaments” select for overreach, namely the autocrat had to think he could, against long odds, rise to the top and stay there.

I am indebted to a conversation with John Nye about the topics of this blog post.

D.C. police have made plans for millions of dollars in anticipated proceeds from future civil seizures of cash and property, even though federal guidelines say “agencies may not commit” to such spending in advance, documents show.

The city’s proposed budget and financial plan for fiscal 2015 includes about $2.7 million for the District police department’s “special purpose fund” through 2018. The fund covers payments for informants and rewards.

As to how the underlying incentives work, this will refresh your memory:

Civil forfeiture laws permit local and state police to take cash, cars, homes and other property from people suspected of involvement in drug trafficking or other wrongdoing without proving a crime has occurred. Police can make seizures under state or federal laws.

Since 2009, D.C. officers have made more than 12,000 seizures under city and federal laws, according to records and data obtained from the city by The Washington Post through the District’s open records law. Half of the more than $5.5 million in cash seizures were for $141 or less, with more than a thousand for less than $20. D.C. police have seized more than 1,000 cars, some for minor offenses allegedly committed by the children or friends of the vehicle owners, documents show.

When D.C. police seize cash or property under District law, the proceeds go into the city’s general fund. But proceeds of seizures made under federal law go directly to the police department through the Justice Department’s Equitable Sharing Program, which allows local departments to join with federal agencies in forfeitures and keep up to 80 percent of the proceeds.

That is all from Robert O’Harrow Jr. and Steve Rich, another installment in their pathbreaking series, scroll down to the bottom of the page for links to the rest.

How can Scandinavians tax so much?

by on November 13, 2014 at 2:19 pm in Economics, Law | Permalink

Henrik Jacobsen Kleven has a new JEP piece on that question., here is one short excerpt:

…these countries also spend relatively large amounts on the public provision and subsidization of goods that are complementary to working, including child care, elderly care, and transportation. Such policies represent subsidies to the costs of market work, which encourage labor supply and make taxes less distortionary…Furthermore, Scandinavian countries spend heavily on education, which is complementary to long-run labor supply and potentially offsets some of the distortionary effects of taxation…

The paper makes numerous other good points.

By Besley and Persson, here is a related JEP piece on why developing economies tax so little.  And here is a recent piece on whether Sweden can become a fully cashless society.  By the way, the full issue of JEP is here.

Both sides put out their joint statement, the U.S. issuing it via the White House and China releasing it through the official Xinhua News Agency. But whereas one side gave it a high gloss, the other seemed to be trying to bury it under the rug. The top story on the website affiliated with the Communist Party flagship paper The People’s Daily was about Xi and Obama meeting the press  – but the article made no reference to the climate agreement. Other stories on the homepage touched on the climate statement but tended to relegate it to the latter half of the article, and omitted the American-style superlatives. The popular Beijing News, a state-run paper known for gently testing the editorial boundaries, also didn’t mention the climate deal in its Nov. 12 cover story on the APEC meeting that brought Obama to China. It focused instead on the meeting’s anti-corruption accord and progress on plans for a pan-Asian free trade zone spearheaded by China.

Here is one reason why:

Beijing is under fire domestically for its unsuccessful efforts to curb local air pollution, noting that people were furious that authorities managed to clear the air for the visiting APEC dignitaries but can’t do it on a daily basis for their own citizens. ” There may be worries that focusing on climate change rather than air pollution doesn’t meet the public’s main concerns,” Seligsohn said via email.

That is all from a good piece by Alexa Olesen at Foreign Policy.

No one knows for sure, you will find a brief survey of some estimates here.  Let’s start with a few simpler points, however.

First, China is notorious for making announcements about air pollution and then not implementing them.  This is only partially a matter of lying, in part the government literally does not have the ability to keep its word.  They have a great deal of coal capacity coming on-line and they can’t just turn that switch off.  They’re also driving more cars, too.

Second, China falsifies estimates of the current level of air pollution, so as to make it look like the problem is improving when it is not.  Worse yet, during the APEC summit the Chinese government blocked the more or less correct estimates coming from U.S. Embassy data, which are usually transmitted through an app.  A nice first step to the “deal” with the United States would have been to allow publication (through the app) of the correct numbers.  But they didn’t.  What does that say about what one might call…”the monitoring end”…of this new deal?

Third, a lot of the relevant Chinese regulatory apparatus is at the local not federal level (in fact it should be more centrally done, even if not fully federalized in every case).  There are plenty of current local laws against air pollution which are simply not enforced, often because of corruption, and often that pollution is emanating from locally well-connected, job-creating state-owned enterprises.  Often the pollution comes from one locality and victimizes another, especially in the north of the country.   Those are not good local regulatory incentives and it will take a long time to correct them.  Right now for instance Beijing imports a lot of its pollution from nearby, poorer regions which simply wish to keep churning the stuff out.  The Chinese also do not have anything close to a consistently well-staffed environmental bureaucracy.

Fourth, if you look at the history of air pollution, countries clean up the most visible and also the most domestically dangerous problems first, and often decades before solving the tougher issues.  For China that highly visible, deadly pollutant would be Total Particulate Matter, which kills people in a rather direct way, and in large numbers, and is also relatively easy to take care of.  (Mexico for instance has been getting that one under control for some time now.)  The Chinese people (and government) are much more worried about TPM than about carbon emissions, which is seen as something foreigners complain about.  Yet TPM is still getting worse in China, and if it is (possibly) flat-lining this year that is only because of the economic slowdown, not because of better policy.

When will China cap carbon emissions?  “Fix TPM and get back to me in twenty years” is still probably an underestimate.  Don’t forget that by best estimates CO2 emissions were up last year in China by more than four percent.  How many wealthier countries have made real progress on carbon emissions?  Even Denmark has simply flattened them out, not pulled them back.

The Chinese really are making a big and genuine effort when it comes to renewables, it is just that such an effort is dwarfed by the problems mentioned above.

The media coverage I have seen of the U.S.-China emissions “deal” has not been exactly forthcoming in presenting these rather basic points.  It’s almost as if no one studies the history of air pollution anymore.

I understand why a lot of reporters want to “clutch at straws” — it’s good for both clicks and the conscience — but a dose of realism is required as well.  The announced deal is little more than a well-timed, well-orchestrated press release.

Is it up to three cynical tapes about Obamacare now?   I’ve lost track.

I’m not so interested in pushing through the mud on this one.  It’s a healthy world where academics can speak their minds at conferences and the like without their words becoming political weapons in a bigger fight.  Or how about blogs?: do we want a world where no former advisor can write honestly about the policies of an administration?  I’ve disagreed with Gruber from the beginning on health care policy and I thought his ObamaCare comic book did the economics profession — and himself — a disservice.  But I’m simply not very interested in his proclamations on tape, which as far as I can tell are mostly correct albeit overly cynical.  (If anything he is overrating the American voter — most people weren’t even paying close enough attention to be tricked.)  Criticisms of Gruber are not criticisms of a policy, and it is policy we should focus upon and indeed there is still a great deal of health care policy we need to figure out.  It’s hardly news that intellectuals who hold political power, even as advisors, very often do not speak the truth.  If anything, I feel sorry for Gruber that he has subsequently felt the need to so overcompensate by actively voicing such ex post cynicism, it is perhaps the sign of a soul not at rest.

In the meantime, I’d like to see more open discourse, not less.  Perhaps we should subsidize people who end up looking foolish, rather than taxing them.

The House of Lords, that is:

One hundred and thirteen draw paychecks from financial-services firms. Twenty-six are paid by resource-extraction companies. Twenty work for foreign governments, in capacities that include advising officials on policy and consulting for government-controlled companies.

Some of those jobs materialized after they joined the House of Lords.

There is much more here, from Justin Scheck and Charles Forelle.  For the pointer I thank Matthew A. Petersen.

How love conquered (arranged) marriage

by on November 10, 2014 at 2:06 pm in Economics, History, Law | Permalink

Gabriela Rubio of UC Merced has a very interesting paper (pdf) on this topic:

Using a large number of sources, this paper documents the sharp and continuous decline of arranged marriages (AM) around the world during the past century, and describes the factors associated with this transition. To understand these patterns, I construct and empirically test a model of marital choices that assumes that AM serve as a form of informal insurance for parents and children, whereas other forms of marriage do not. In this model, children accepting the AM will have access to insurance but might give up higher family income by constraining their geographic and social mobility. Children in love marriages (LM) are not geographically/socially constrained, so they can look for the partner with higher labor market returns, and they can have access to better remunerated occupations. The model predicts that arranged marriages disappear when the net benefits of the insurance arrangement decrease relative to the (unconstrained) returns outside of the social network. Using consumption and income panel data from the Indonesia Family Life Survey (IFLS), I show that consumption of AM households does not vary with household income (while consumption of LM households does), consistent with the model’s assumption that AM provides insurance. I then empirically test the main predictions of the model. I use the introduction of the Green Revolution (GR) in Indonesia as a quasi-experiment. First, I show that the GR increased the returns to schooling and lowered the variance of agricultural income. Then, I use a difference-in-difference identification strategy to show that cohorts exposed to the GR experienced a faster decline in AM as predicted by the theoretical framework. Second, I show the existence of increasing divorce rates among couples with AM as their insurance gains vanish. Finally, using the exogenous variation of the GR, I find that couples having an AM and exposed to the program were more likely to divorce, consistent with the hypothesis of declining relative gains of AM.

MR referenced this paper in an addendum some while ago, Michael Clemens on Twitter recently reminded me of its existence.  One question of course is to what extent the arranged marriage is the only marriage form which provides these insurance benefits.  In other words, the arranged marriage might go away, but without the love marriage triumphing.  Perhaps one key change is that the parents are no longer the best producers of those financial insurance benefits, but that is distinct from the triumph of love.

That is the topic of my latest column for The Upshot at The New York Times, here is an excerpt:

Unfortunately, regions with rapidly growing populations, like Africa and South Asia, often have lower living standards. In our likely global future, these regions will have more people than they can comfortably support, while many countries in the West and in East Asia will have too few young people for prosperous economies.

As an economist, I see an obvious solution: Relatively underpopulated and highly developed countries could profitably take in young Africans and South Asians — and both sides would gain. Yet it’s far from clear that all nations that could benefit from this policy would entertain it, partly because of persistent racial and cultural bias. There is also the legitimate question of how quickly immigrants can adjust to new environments, especially if they are arriving with weak educational backgrounds as the job market demands ever-stronger skills.

…If you’re not convinced that a declining population is a problem, consider Japan. In terms of real gross domestic product per hour worked, Japan has continued to have good performance, but it has a fundamental problem: The working-age population has been declining since about 1997. And Japan’s overall population has been growing older, so with fewer workers supporting so many retirees, national savings will dwindle and resources will be diverted from urgent tasks like revitalizing companies and otherwise invigorating the economy. Japan has already gone from being a miracle exporter to a country that runs steady trade deficits. Perhaps there is simply no narrowly economic recipe to keep its economy growing; Edward Hugh made this argument in his recent ebook, “The A B E of Economics.”

I am extremely pessimistic that we will manage to achieve any more than a small amount of workable population transfers.  Furthermore potential underpopulation is one of the most serious and underrated problems today, as Robin Hanson argued a few years ago.

There is also this bit, the first sentence of which may remind you of Steve Sailer:

France, Israel and Singapore are three countries where population issues are being discussed quite frankly; all have explicit public policies to encourage more births. And more countries will probably go down this route. Encouraging people to have more children, and generally bidding for human talent, may characterize the economic policies of the future, just as cities and states today bid for football stadiums and factories.

By the way, recent reports indicate that the relaxation of China’s one-child policy have led to many fewer births than were expected.  And this new paper (pdf) indicate that immigrant inflows raise the birth rates of native women by making child care more affordable.

In the modern sense that is, of course potatoes have been genetically modified for a long time:

The Agriculture Department on Friday approved the first genetically modified potato for commercial planting in the United States, a move likely to draw the ire of groups opposed to artificial manipulation of foods.

The Innate potato, developed by the J.R. Simplot Co., is engineered to contain less of a suspected human carcinogen that occurs when a conventional potato is fried, and is also less prone to bruising during transport.

Boise, Idaho-based Simplot is a major supplier of frozen french fries to fast-food giant McDonald’s.

The story is here, and you will note that on Tuesday the mandatory GMO-labeling initiatives failed in Oregon and Colorado, the second failure in Oregon and that means failures in four states overall.  Less positively, voters in Maui County, Hawaii chose to restrict GMO cultivation altogether.  And now McDonald’s is under pressure not to use these new potatoes for its french fries.  But of course you can understand the marketing dilemma of McDonald’s here — they can’t just come out and say “these french fries won’t give you cancer.”