Since Donald Trump has picked Betsy DeVos to be education secretary, many commentators have been pulling out their anti-school choice arguments from the closet, and for the most part it isn’t a pretty sight. To insist on a single government-run school and trash school choice, while out of the other side of one’s mouth criticizing Trump for “authoritarianism,” and other times proclaiming “Black Lives Matter” is from my point of view a pretty poor mix.
To be sure, we’re still not sure how well vouchers work, and I would suggest continuing experimentation rather than full-on commitment. Frankly, I find a lot of the voucher advocates unconvincing, but let’s not forget the single most overwhelming (yet neglected) empirical fact about vouchers: they improve parent satisfaction.
That result is not much contested. For instance:
Universally, school choice parents are highly satisfied with choice schools, reporting greater discipline, more responsive staff and better educational environments than the public schools they left. That parents are satisfied with their choice schools is a valuable indicator that school choice delivers real benefits. As University of Wisconsin professor John Witte, the official evaluator of the Milwaukee choice program, recently commented on school choice research: “There’s one very consistent finding: Parental involvement is very positive, and parental satisfaction is very positive…parents are happier. The people using vouchers are mostly black and Hispanic and very poor…they deserve the same kind of options that middle-class white people have.”
Patrick J. Wolf’s survey of twelve voucher programs (pdf) supports this interpretation. And here are strongly positive results on parental satisfaction Indiana. I could go on, but I don’t think there is much need.
Of course parents may like school choice for reasons other than test scores. To draw from the first link above, parents may like the academic programs, teacher skills, school discipline, safety, student respect for teachers, moral values, class size, teacher-parent relations, parental involvement, and freedom to observe religious traditions, among other facets of school choice.
Perhaps now is the time to remind you that how the buyers like the product is the fundamental standard used by economists for judging public policy? That is not to say it is the final standard all things considered, but surely economists should at least start here and report positive parental satisfaction as a major feature of school choice programs. In fact, I’ll say this: if you’re reading a critique of vouchers and the critic isn’t willing to tell you up front that parents typically like this form of school choice, I suspect the critic isn’t really trying to inform you.
To be sure, you still might not favor school vouchers. You might think they cost too much, you might think they will politicize private schools too much, or you might think they weaken national unity too much, to cite a few possibilities. (Although please, on that latter matter you can’t just say something silly like “public schools and the army made America what it is today.” You need some actual evidence. Won’t parents who are happy with the schooling of their children also contribute to national unity and push us away from polarization? That effect might outweigh whatever more negative mechanism you have in mind. Evidence please, not just sentiment.)
And as for test scores, the evidence there is still unclear. Here are a few earlier MR posts, no cherry- or lemon-picking, please.
Scott Alexander has some excellent comments on vouchers and school choice.
2. “McDavid is studying economics at Witten/Herdecke University in western Germany’s Ruhr region.” By the way, he is upset about his implicit marginal tax rate. A good piece. [Update: better link here]
5. “To a young person, $1,000 can be a lot of money. To us, it isn’t,” says Strachman. “We collect social geeks—1517 is a search cost.” Link here.
That is the paper’s subtitle, the title is “Midpregnancy marriage and divorce,” and the authors are
Conventional wisdom holds that births following the colloquially termed “shotgun marriage”—that is, births to parents who married between conception and the birth—are nearing obsolescence. To investigate trends in shotgun marriage, we matched North Carolina administrative data on nearly 800,000 first births among white and black mothers to marriage and divorce records. We found that among married births, midpregnancy-married births (our preferred term for shotgun-married births) have been relatively stable at about 10 % over the past quarter-century while increasing substantially for vulnerable population subgroups. In 2012, among black and white less-educated and younger women, midpregnancy-married births accounted for approximately 20 % to 25 % of married first births. The increasing representation of midpregnancy-married births among married births raises concerns about well-being among at-risk families because midpregnancy marriages may be quite fragile. Our analysis revealed, however, that midpregnancy marriages were more likely to dissolve only among more advantaged groups. Of those groups considered to be most at risk of divorce—namely, black women with lower levels of education and who were younger—midpregnancy marriages had the same or lower likelihood of divorce as preconception marriages. Our results suggest an overlooked resiliency in a type of marriage that has only increased in salience.
2. Why fake data when you can fake a scientist, note that Borat still serves on a few editorial boards.
6. The Obama overtime regulations disrespect workers (and their bosses).
I think this is one of the best videos that we have ever done at MRUniversity–it combines history, technology and economics with a great story that links it all together. It’s the final video in the section of our Principles of Macroeconomics class covering unemployment and labor force participation. As always, the videos are free to use and they pair exquisitely well with the best principles textbook, Modern Principles.
Addendum: The video is based on some great papers, here are links: The Power of the Pill by Claudia Goldin and Lawrence Katz and Martha Bailey’s papers “Momma’s Got the Pill”: How Anthony Comstock and Griswold v. Connecticut Shaped US Childbearing and More Power to the Pill.
2. Are you Howard Roark? The libertarian architect.
3. A problem for industrial policy: export specialization is not as stable as you think.
4. Ted Gioia’s 100 best albums of 2016, always an event. All kinds of music.
5. How good are Cuba’s social indicators anyway? A very good post.
Asians in America faced heavy discrimination and animus in the early twentieth century. Yet, after institutional restrictions were lifted in the late 1940s, Asian incomes quickly converged to white incomes. Why? In the politically incorrect paper of the year (ungated) Nathaniel Hilger argues that convergence was due to market forces subverting discrimination. First, a reminder about the history and strength of discrimination against Asians:
Foreign-born Asians were barred from naturalization by the Naturalization Act of 1790. This Act excluded Asians from citizenship and voting except by birth, and created the important new legal category of “aliens ineligible for citizenship”…Asians experienced mob violence including lynchings and over 200 “roundups” from 1849-1906 (Pfaelzer, 2008), and hostility from anti-Asian clubs much like the Ku Klux Klan (e.g., the Asiatic Exclusion League, Chinese Exclusion League, Workingmen’s Party of CA), to an extent that does not appear to have any counterpart for blacks in CA history. Both Asians and blacks in CA could not testify against a white witness in court from 1853-73 (People v. Hall, 1853, see McClain, 1984), limiting Asians’ legal defense against white aggression. The Chinese Exclusion Act of 1882 and the “Gentlemen’s Agreement” in 1907 barred further immigration of all “laborers” from China and Japan.
…Asians have also faced intense economic discrimination. Many cities and states levied discriminatory taxes and fees on Asians (1852 Foreign Miner’s Tax, 1852 Commutation Tax, 1860 Fishing License, 1862 Police Tax, 1870 “queue” ordinance, 1870 sidewalk ordinance, and many others). Many professional schools and associations in CA excluded Asians (e.g., State Bar of CA), as did most labor unions (e.g., Knights of Labor, American Federation of Labor), and many employers declined to hire Asians well into the 20th century (e.g., Mears, 1928, p. 194-204). From 1913-23, virtually all western states passed increasingly strict Alien Land Acts that prohibited foreign-born Asians from owning land or leasing land for extended periods. Asians also faced laws against marriage to whites (1905 amendment to Section 60 of the CA Civil Code) and U.S. citizens (Expatriation Act 1907, Cable Act 1922). From 1942-46, the US forcibly relocated over 100,000 mainland Japanese Americans (unlike other Axis nationalities, e.g. German or Italian Americans) to military detention camps, in practice destroying a large share of Japanese American wealth. In contrast, blacks in CA were eligible for citizenship and suffrage, were officially (though often not de facto) included in CA professional associations and labor unions that excluded Asians, were not covered by the Alien Land Acts, and were not confined or expropriated during WWII.
Despite this intense discrimination, Asian (primarily Japanese and Chinese) incomes converged to white incomes as early as 1960 and certainly by 1980. One argument is that Asians invested so heavily in education that convergence has been overstated but Hilger shows that convergence occurred conditional on education. Similarly, convergence was not a matter of immigration or changing demographics. Instead, Hilger argues that once institutional discrimination was eased in the 1940s, market forces enforced convergence. As I wrote earlier, profit maximization subverts discrimination by employers:
If the wages of X-type workers are 25% lower than those of Y-type workers, for example, then a greedy capitalist can increase profits by hiring more X workers. If Y workers cost $15 per hour and X workers cost $11.25 per hour then a firm with 100 workers could make an extra $750,000 a year. In fact, a greedy capitalist could earn more than this by pricing just below the discriminating firms, taking over the market, and driving the discriminating firms under.
If that theory is true, however, then why haven’t black incomes converged? And here is where the paper gets into the politically incorrect:
Modern empirical work has indicated that cognitive test scores—interpreted as measures of productivity not captured by educational attainment—can account for a large share of black-white wage and earnings gaps (Neal and Johnson, 1996; Johnson and Neal, 1998; Fryer, 2010; Carruthers and Wanamaker, 2016). This literature documents large black-white test score gaps that emerge early in childhood (Fryer and Levitt, 2013), persist into adulthood, and appear to reflect genuine skills related to labor market productivity rather than racial bias in the testing instrument (Neal and Johnson, 1996). While these modern score gaps have not been fully accounted for by measured background characteristics (Neal, 2006; Fryer and Levitt, 2006; Fryer, 2010), they likely relate to suppressed black skill acquisition during slavery and subsequent educational discrimination against blacks spanning multiple generations (Margo, 2016).
…A basic requirement of this hypothesis is that Asians in 1940 possessed greater skills than blacks, conditional on education. In fact, previous research on Japanese Americans in CA support this theory. Evidence from a variety of cognitive tests given to students in CA in the early 20th century suggest test score parity of Japanese Americans with local whites after accounting for linguistic and cultural discrepancies, and superiority of Japanese Americans in academic performance in grades 7-12 (Ichihashi, 1932; Bell, 1935).
Hilger supplements these earlier findings with a small dataset from the Army General Classification Test:
…these groups’ cognitive test performance can be studied using AGCT scores in WWII enlistment records from 1943. Remarkably, these data are large enough to compare Chinese, blacks and whites living in CA for these earlier cohorts. In addition, this sample contains enough young men past their early 20s to compare test scores conditional on final educational attainment, which can help to shed light on mechanisms underlying the conditional earnings gap documented above.
Figure XII plots the distribution of normalized test score residuals by race from an OLS regression of test z-scores on dummies for education and age. Chinese Americans and whites have strikingly similar conditional skill distributions, while the black skill distribution lags behind by nearly a full standard deviation. Table VIII shows that this pattern holds separately within broad educational categories. These high test scores of Chinese Americans provide strong evidence that the AGCT was not hopelessly biased against non-whites, as Neal and Johnson (1996) also find for the AFQT (the successor to the AGCT) in more recent cohorts.
From Hilger’s conclusion:
Using a large and broadly representative sample of WWII enlistee test scores from 1943 both on their own and matched to the 1940 census, I document the striking fact that these test scores can account for a large share of the black, but not Asian, conditional earnings gap in 1940. This result suggests that Asians earnings gaps in 1940 stemmed primarily from taste-based or some other non-statistical discrimination, in sharp contrast with the black earnings gap which largely reflected statistical discrimination based on skill gaps inherited from centuries of slavery and educational exclusion. The rapid divergence of conditional earnings between CA-born Asians and blacks after 1940—once CA abandoned its most severe discriminatory laws and practices—provides the first direct empirical evidence in support of the hypothesis of Arrow (1972) and others that competitive labor markets tend to eliminate earnings gaps based purely on taste-based but not statistical discrimination.
Hilger’s other research is here.
That’s banks doing proprietary trading for their own accounts, which was limited by Dodd-Frank. But have those limitations been effective? Maybe not, at least that is what Jussi Keppo and Josef Korte suggest in their newly published paper:
We analyze the Volcker Rule’s announcement effects on U.S. bank holding companies. In line with the rule and the banks’ public compliance announcements, we find that those banks that are affected by the Volcker Rule already reduced their trading books relative to their total assets 2.34% more than other banks. However, the announcement of the rule did not reduce the banks’ overall risk taking. To keep their risk targets, the affected banks raised the riskiness of their asset returns. We also find some evidence that the affected banks raised their trading risk and decreased the hedging of their banking business.
I would not consider this the final word, but those results are hardly a surprise. Trying to control bank risk-taking on a limited number of margins is likely to misfire, given the possibilities for other portfolio adjustments.
Most of all I find it striking how many people have strong opinions on the Volcker rule, one way or another, simply because they feel they ought to be on one “side” of the issue.
Here is an overview of what is up, here is the plan itself. Since it was produced by a bureaucracy rather than a blogger, it is hard to wade through the verbiage. Nonetheless one of the bottom lines is a call for greater unity of methods and especially terms, so as to make discrete studies by different researchers more easily comparable, searchable, and aggregated into broader meta-studies, for instance:
In response to these types of measurement concerns, the Patient-Reported Outcomes Measurement Information System (PROMIS) developed a common scale or metric on which all measures of a given construct can be expressed. To achieve this, PROMIS developed and tested item banks using modern psychometric theory that, in addition to producing more precise and efficient measures, allow different measures of the same construct to be cocalibrated. As a result, different instruments measuring the same construct can be expressed on a single metric, aiding data harmonization and integration.
Another approach to addressing this data harmonization and integration challenge is to develop consensus measures for specific constructs. PhenX, for example, has developed a curated set of measurement protocols for specific phenotypic constructs. The NCI Grid-Enabled Measures website utilizes a crowdsourcing wiki approach to cataloging the various measures of a given social or behavioral construct. The National Library of Medicine has generated a directory of common data elements that serves as a repository for commonly accepted measures and data structures that, if adopted by researchers, would facilitate data integration across studies.
The original pointer is from Mitchell Eckert. Keep in mind economists that, depending on your definition of economics, the NIH arguably supports at least as much economics research as does the NSF.
You might also be interested in University of Wisconsin job market candidate Nathan Yoder, whose main paper, a theory paper, is on improving incentives for academic research. Here is the latter part of the abstract:
In keeping with current practice, the institution contracts based on the experiment’s result instead of its methodology. This removes a degree of freedom from the optimal design problem, but I show that there need not be loss from doing so. The optimal contract has two general characteristics. First, to discourage the production of false positive results, negative results supporting conventional wisdom must be rewarded. Second, the most informative results must be disproportionately rewarded. To arrive at these conclusions, I contribute to the literature by characterizing solutions and comparative statics of Bayesian persuasion problems using differentiability.
These topics remain very much understudied.
2. Bagpipe nudge.
6. If Cuba had never had a communist revolution (a research paper based on a counterfactual scenario, pdf).
1. TLS books of the year list. I can’t recall seeing such a good list from the TLS.
4. A tweet storm from my IO class, including on CEO pay.
5. David Brooks on Kahneman and Tversky (NYT).
I was disappointed by most of this year’s well-known releases, and did most of my rewarding fiction reading in past classics. But these are the fiction or fiction-related works I found to be outstanding this year:
Eimear McBride, The Lesser Bohemians. A novel of an affair, with intoxicating Irish prose and a genuine energy on the page, though it is more a work of intensifying fervor than a traditional plot-based story.
Claire Louise-Bennett, Pond, more from Ireland, short, nominally fiction but more like a circular sensory experience of reading overlapping short stories, with a cumulative effect akin to that of poetry. I found this one mesmerizing.
Javier Marias, Thus Bad Begins. I have only started this, but so far I like it very much. I have enough faith in Marias to put in on the list.
Juan Gabriel Vásquez, Reputations, a short Colombian novel on memory — personal, historical, sexual, and otherwise, this was my favorite short work of the year.
The Complete Works of Primo Levi, in three volumes, edited by Ann Goldstein. By no means is all of this fiction, but I will put these books in this category. A revelation, as Levi has more works of interest, and a broader range of intellect and understanding, than I had realized. There is plenty of linguistics, economics, history, and social science in these literary pages as well as consistently beautiful writing and superb translations. This is technically from 2015, but I missed it last time around.
Emily Dickinson’s Poems as She Preserved Them, edited by Cristanne Miller. The visual presentation of poetry matters too, plus she is one of the very best.
The Found and the Lost: The Collected Novellas of Ursula K. LeGuin, self-recommending.
Elena Ferrante, Frantumaglia. A revealing mismash look into the mind of the author, giving you an integrated picture of her world view, with carefully calculated feints thrown in. I should note this one works only if you know and love her novels already. Ferrante’s “children’s” story The Beach at Night is also worthwhile, very dark, you can read it in a small number of minutes. Here is a good NYT review.
Jean-Michael Rabaté, Think Pig! Beckett at the Limit of the Human. This work of criticism is grounded in literary theory, but informative and smart nonetheless.
Michael Orthofer, The Complete Review Guide to Literary Fiction. An amazingly comprehensive and informative work, mostly about literature in translation, from the creator of the Literary Saloon blog about fiction. I liked it so much I decided to do a Conversation with Michael Orthofer. If you could own only ten works on literature, this should be one of them.
If you give me only one pick, I opt for the Primo Levi, even if you think you already know his work.
A few I didn’t get to read yet, but have hopes for are Alan Moore’s Jerusalem, and Deborah Levy’s Hot Milk, caveat emptor in both cases, plus Invisible Planets, edited by Ken Liu, a collection of Chinese science fiction.
My post on best non-fiction of the year will be coming soon, plus I’ll do new entries for any excellent fiction between now and the end of the year.