Law

Eva Ihnenfeldt was in her bathrobe when German police showed up at 8 a.m. one morning to search her home.

“I racked my brain for any unexplained murders,” said the owner of a digital marketing business, which was simultaneously searched. The search warrant cited paragraph 132a of the German criminal code. Her crime was blogging about a gag gift from her children, an honorary Ph.D. certificate purchased for €39 on Groupon.

…{The German] obsession [with academic titles] has spawned not only a host of weird rules and traditions—misuse can draw a year in prison or stiff fines—but a posse of mostly anonymous vigilantes who scout out unearned titles, academic plagiarists and other ivory tower scofflaws.

Sleuthing under pseudonyms including Dr. Simplicius and Plagin Hood, dozens of German scholars spend hours of their own time scouring obscure theses for questionable citations. Targets have included academics, minor celebrities and leading politicians. Most are exposed on the website VroniPlag Wiki, named for an early target.

…One academic downloaded 50,000 medical theses and exposed more than 60 cases of significant plagiarism. Another spent three months, full-time, investigating a single thesis.

And this:

German law in the past prohibited foreign Ph.D.s from using the title “Dr.”

American Ian T. Baldwin, a Cornell-educated professor of ecology in eastern Germany, received a summons from his local police chief in early 2008.

“He wanted to know how I planned to plead to the charge of Titelmissbrauch,” or misuse of titles, recalled Prof. Baldwin, who directs the Max Planck Institute for Chemical Ecology. “I couldn’t even pronounce it.”

This website (in German) spells out the proper protocols.  Here is the full article, by Tom Fairless, with the pointer from the excellent Samir Varma.

There have been so many blog posts on male labor force participation, it is time to give women some additional coverage.  So Kubota, a job market candidate at Princeton, has an excellent paper on this topic.

Child Care Costs and Stagnating Female Labor Force Participation in the US

The increasing trend of the female labor force participation rate in the United States stopped and turned to a decline in the late 1990s. This paper shows that structural changes in the child care market play a substantial role in influencing female labor force participation. I first provide new estimates of long-term measures of prices and hours of child care using the Survey of Income and Program Participation. Hourly expenditure on child care rose by 40% and hours of daycare used declined by 20%. Next, I build a life-cycle model of married couples that features a menu of child care options that captures important features of reality. The calibrated model predicts that the rise in child care costs leads to a 5% decline in total employment of females, holding all else constant. Finally, this paper provides two hypotheses and their supporting evidence about the causes of rising child care costs: (i) restrictive licensing to home-based child care providers, and (ii) the negative effect of expanded child care subsidies to lower income households on the incentives for those individuals to operate the home-based daycare.

I will be continuing my coverage of interesting job market papers, as more interesting ones come on line.

Addendum: Kevin Drum adds comment.

The Niskanen Center says no, Vox says yes.  Bailey and Bookbinder at Niskanen:

…while the Clean Power Plan is a dead letter for reasons explained below, every other such executive action will be litigated and delayed. The environmental NGOs’ law departments are getting back into their 2003-2006 mode even as we write this. Not only were the great majority of similar Bush agency actions overturned by the courts, but the current makeup of both the D.C. Circuit and the other federal appellate courts are significantly more favorable to environmental litigants than they were a decade ago.

…getting rid of the CPP is not going to have much of an effect on steadily-declining power sector emissions. As EPA has indicated, the CPP would have little real impact on emission paths in the early years, as low gas prices and state renewable mandates have done most of the work already. There is no sign either will change soon and technology (e.g. LED streetlights) is driving electricity demand reductions in ways that will probably continue.

Trump’s reputed interest in freeing-up permitting of energy infrastructure (e.g., gas pipelines and drilling on public lands, if indeed it can be achieved) may have the paradoxical effect of further reducing emissions. It could make it easier to get currently very cheap Marcellus / Utica gas into the center of the country and perhaps even increase overall natural gas output. This can have only one outcome; reduced national gas prices overall and less coal consumption.

Roberts and Plumer at Vox:

You can see a partial list of past House Republican bills here. In 2013, they proposed cutting EPA funding by fully one-third. GOP committees churned out bill after bill to cut research funding for renewable energy by 50 percent, block rules on coal pollution, block rules on oil spills, block rules on pesticide spraying, accelerate oil and gas drilling permits on public land, prohibit funding for creation or expansion of wildlife refuges, cut funding for the Advanced Technology Vehicle Manufacturing Loan Program, and … well, there are 61 items on the list.

The Senate GOP isn’t far behind: In 2015, they floated a bill to cut the EPA’s budget by 9 percent and block rules on everything from ground-level ozone pollution to climate change. There may be a few more moderate GOP senators who think global warming is a problem, like Susan Collins (R-ME). But they do not dominate the caucus: Fossil-fuel enthusiasts like Mitch McConnell and James Inhofe do.

There’s no indication that Trump will buck his party on these issues.

Overall I am more persuaded by the Niskanen analysis, but both pieces are worth reading.  Here is my earlier post on the same issues.

Does Donald Trump want to streamline the FDA and speed new drugs to patients? The Washington Post thinks that it can read the tea leaves:

A single sentence in President-elect Donald Trump’s health-care platform sends a strong hint to the drug and medical device industry that they may have an easier time getting their products on the market under his administration.

“Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products,” his health plan states.

On the face of it, the bullet point may seem almost bland, but efforts to integrate patients’ preferences and encourage innovation often result in proposals aimed at speeding up the process for getting new medicines on the market by easing regulations. Critics argue that such efforts can erode standards that are in place to protect patients from drugs that don’t work and might even be harmful.

“The language … is industry code for deregulation and reducing of safety standards,” said Robert Weissman, president of Public Citizen, a consumer watchdog.

There is plenty of evidence that the FDA is too slow (see, for example, here, here, here and here) so I would support such a move. Senators Cruz and Lee proposed a reciprocity bill last term under which drugs approved in other developed countries would quickly be approved here; perhaps such a bill could find renewed interest in a Trump administration (Economists also support the idea of reciprocity.)

On the other hand, Trump has expressed support for Medicare being allowed to negotiate drug prices which is tantamount to price controls given the size of Medicare and that is potentially a disaster. Price controls could significantly reduce research and development in the pharmaceutical industry and end up greatly adding to the invisible graveyard. Trump’s advisers would seem to lean towards streamlining the FDA process rather than imposing price controls but it’s difficult to be certain.

It seems so, based on the nature of the transition team, the stock market reaction to Trump’s election, what the Trump web site says they will do, and what they have the power to do.

Here is my recent piece on rethinking Dodd-Frank, which I think has been less than a success for the most part.  Here were my original comments on Dodd-Frank, piece by piece, which I think were mostly on the mark.  But overall Dodd-Frank ended up harming mortgage lending, and thus residential investment, more than I had been expecting.  Here is my earlier post “Is the Fed our savior in financial regulation?”  Overall, most of the gains from Dodd-Frank can be kept through adequate capital standards, and so there is a potential win from modifying the status quo.  I would stress the simple point that most people who favor (or oppose) Dodd-Frank could not explain what the bill actually does, but they simply choose their positions based on how anti-finance they think they should be.  That is a mistake.

I do plan to give you ongoing reports on economic policy changes as I see them developing.

…individuals with criminal records have an involuntary separation rate that is no higher than that of other employees and a voluntary separation rate that is much lower. Employees with a criminal record do have a slightly higher overall rate of discharge for misconduct than do employees without a record, although we find increased misconduct only for sales positions. We also find that firms that do not use information about criminal backgrounds seem to compensate by placing more weight on qualifications that are correlated with a criminal record, such as low educational attainment.

That is from a new paper by Dylan Minor, Nicola Persico, and Deborah M. Weiss.

Read it here, here is just one bit:

If there is any common theme to my predictions, it stems from Trump’s history in franchising his name and putting relatively little capital into many of his business deals. I think his natural instinct will be to look for some quick symbolic victories to satisfy supporters, and then pursue mass popularity with a lot of government benefits, debt and free-lunch thinking. I don’t think the Trump presidency will be recognizable as traditionally conservative or right-wing.

I do wish to stress this is all speculative and I expect there will be many more surprises to come.

I say probably not.  Leonid Bershidsky writes:

Although some of these groups have made headlines with their gun-toting antics, the militiamen I met in Florida were more afraid and disoriented than fearsome…It’s hard to imagine [those] people…taking up arms for Trump if he loses and refuses to concede defeat. One reason is that they are not die-hard Trump fans. Another is that they’re realistic about how much power they have.

I think it is far more likely there is some additional violence if Trump wins.  Does “emboldening” or “disillusionment” encourage more aggression?  I am more afraid of too much enthusiasm for how much “change” is possible, then leading to overreaching among some of the less salubrious followers, backed by a belief that “now everything is permitted.”

In the meantime, it’s 1968, and Eddie Brinkman is stepping up to the plate to bat

I am impressed by how many very good job market papers are coming out of UCSD this year.  This work, by Onyi Lam, I expect will be some of my favorite of the entire job market season.  The underlying theme is how effectively propaganda and censorship often work through incentives and political culture, rather than outright coercion.  Here is one of the papers:

Advertisers Capture: Evidence from Hong Kong

This paper provides evidence that non-coercive political pressure on the media can be substantial. It shows that advertisers in Hong Kong engage in politically-induced advertising boycott on media that adopts a political stance which is against the mainland Chinese government policy. Using daily advertising data between 2010 and 2014, I exploit the exogenous variation of the occurrence of political events and their intensity to examine to what degree political salience affects firms’ decisions to place ads in a pro-Democracy (as opposed to pro-Beijing) newspaper, particularly so among Beijing-friendly firms. I estimate that the pro-Democracy newspaper suffered from an ad revenue loss equivalent to 21.9% of its total advertising revenue in 2014 due to political reasons.

Here is a very recent Guardian story about how the Hong Kong publishing industry is shrinking under pressure from China.  Hong Kong of course is heating up again, as China blocked two elected members from the legislature.

Here is another paper by Lam, this one being work in progress:

Measuring Subjectivity in History Textbooks (with Eddie Lin (University of Chicago))

History textbooks provide a lens through which students view the nation’s past. Government, especially that of authoritarian regime, has an incentive to present biased content in the history textbook to influence students’ political views. This paper considers the problem of measuring subjectivity history textbooks in China, Hong Kong and Taiwan. Using sentiment analysis, I find empirical evidence that history textbooks in mainland China exhibit stronger degree of subjectivity than history textbooks used in Hong Kong and Taiwan. Specifically, the paper measures the adjective content in the textbook, the ratio of positive to negative words in specific time periods and employs word embedding method that measures distance from entities of interest such as the Chinese Communist Party.

This entire topic is understudied by economists…

Losers go to jail

by on November 7, 2016 at 3:30 am in Data Source, Law, Political Science | Permalink

That is the title of the job market paper of Mitch Downey, of UCSD, the subtitle is “Congressional Elections and Union Officer Prosecutions,” and here is the abstract:

Democratic societies rely on fair judicial systems and competitive political systems. If politicians can control criminal investigations of influential groups and use them to undermine political opponents and protect supporters, it subverts these systems. I test whether prosecutions of politically active labor unions respond to Congressional election outcomes. I use novel data on federal indictments, campaign contributions to measure support, and a regression discontinuity to recover causal effects. I find that union officers are 67% more likely to be indicted when the candidate their union supported barely loses. These indictments weaken unions’ ability to influence politics, making reelection more difficult for union-supported Representatives and easier for the union-opposed. As such, the discontinuity might reflect reduced indictments to protect election winners’ union supporters or increased indictments to target winners’ union opponents. A series of analyses suggest it includes both. The results show that US politicians manipulate the justice system to maintain power.

His other papers, at the above link, are interesting too, covering voting, labor market frictions, and also the political economy of Afghanistan.

Not very much, and maybe not at all.  There are numerous papers on this question, with a variety of results, but this one is perhaps the most thorough and best-specified:

Got ID? The Zero Effects of Voter ID Laws on County-Level Turnout, Vote Shares, and Uncounted Ballots, 1992-2014
Abstract: Abstract Do voter ID laws disenfranchise voters? Despite a ferocious, politically charged debate in the media and public opinion, the scholarly evidence on the effects of voter ID requirements is inconclusive. In this paper, I use county-level administrative data from 1992 to 2014 and a Differences-in-Differences research design to identify and estimate the impact of voter ID laws on turnout, Democratic vote share, and irregular ballots. I find no effect of ID laws on any of these outcomes. All estimates are fairly precise and robust to a number of regression specifications. Estimates of heterogeneous effects by educational attainment, poverty rate and minority presence are similarly supportive of ID laws having no impact on electoral outcomes of any type.

That is from Enrich Cantoni, who is on the job market from MIT this year.  That is not his job market paper, however, that paper considers how much the distance to the poll influences turnout.

No, I don’t see them voting down Brexit, any more than Republican Senators ever were going to endorse Hillary Clinton, even though many of them are rooting for her.  The more likely scenario out of Brexit is simply that Parliament stalls, demanding that Theresa May give them “the right Brexit.”  Of course there is no such thing, wrong Brexit is wrong Brexit, if only because EU-27 cannot agree on very much.  But with enough stalling, eventually another national election will be held and of course Brexit would be a major issue, probably the major issue.  That in essence would serve as a second referendum, and if anti-Brexit candidates did well enough, parliamentarians would have cover to go against the previous expression of the public will.

I give that path out of Brexit p = 0.2, with another p = 0.1 for “somehow Brexit just doesn’t happen.”

Here is commentary from Joshua Tucker.  And from Jolyom Maugham.

Addendum: The final word on Brexit rights may be held by…the European Court of Justice.

China fact of the day

by on November 3, 2016 at 1:54 am in Data Source, Economics, Law | Permalink

Chinese cities are less densely populated than many people think:

While China is a very populous country, density in Chinese cities is typically much lower than major American metropolitan areas. For example, the first tier cities have population density varying from 1,000 to 2,000 people per square kilometer in 2010, whereas New York City has density of 10,000 people per square kilometer and the top 100 American MSAs all have density above 4,000 people per square kilometer.

That is from Glaeser, Huang, Ma, and Shleifer “A Real Estate Boom With Chinese Characteristics,” an interesting and useful paper.  They argue that current Chinese real estate prices might prove sustainable, but there is a basic dilemma that cannot be avoided:

…that path may create significant social costs. Construction employment would plummet. Millions of Chinese may lose the apparent productivity advantages associated with living in Chinese cities (Chauvin et al. 2016). Local governments would lose the financial autonomy from land sales and taxes that has been their institutional basis. The alternative for the Chinese government is to accommodate high levels of construction and housing supply. As we showed, this will lead to very low or negative expected returns to investment in housing. The welfare of potential new buyers will rise, but current owners will suffer losses.

Recommended reading.

This seems like one of many under-reported stories of this year, and I think that holds no matter what is your point of view on abortion:

Although many limitations remain, innovative dispensing efforts in some states, restricted access to surgical abortions in others and greater awareness boosted medication abortions to 43 percent of pregnancy terminations at Planned Parenthood clinics, the nation’s single largest provider, in 2014, up from 35 percent in 2010, according to previously unreported figures from the nonprofit.

The national rate is likely even higher now because of new federal prescribing guidelines that took effect in March. In three states most impacted by that change – Ohio, Texas and North Dakota – demand for medication abortions tripled in the last several months to as much as 30 percent of all procedures in some clinics, according to data gathered by Reuters from clinics, state health departments and Planned Parenthood affiliates.

Among states with few or no restrictions, medication abortions comprise a greater share, up to 55 percent in Michigan and 64 percent in Iowa.

…Studies have shown medical abortions are effective up to 95 percent of the time.

Approved in France in 1988, the abortion pill was supposed to be a game changer, a convenient and private way to end pregnancy. In Western Europe, medication abortion is more common, accounting for 91 percent of pregnancy terminations in Finland, the highest rate, followed by Scotland at 80 percent, according to the Guttmacher Institute, a nonprofit research organization that supports abortion rights.

Here is the full account, via a loyal MR reader.

That is the title of my latest Bloomberg column.  Here is one bit:

Some of the best arguments for the TPP are underwhelming as public rhetoric. “If we don’t pass this trade agreement, China will write the rules for the region,” is perhaps the most significant point. Yet it is framed as a negative, namely that something worse than TPP may happen. This focuses the public on the defects and weakness of American leadership, making the positive options on the table seem less than transformational.

It’s as if U.S. elites are saying: “We screwed this one up by letting Chinese influence get so far in the first place. Trust us now to set it straight.” However true that may be, few private companies would succeed with that kind of motivation in their advertising.

But if you read the rest of the column, you will see that the case for TPP is truly exciting indeed…