My New Jersey history podcast with “Exit Interviews”

Exit Interviews is a new podcast run by David Piegaro.  I am honored to be one of the first few guests, along with Chris Christie.  Think of this session as “Tyler Cowen as regional thinker.”  Almost 100% fresh material, not to mention some trolling directed at Central and South Jersey, Philly too.  Here is my episode.

Definitely recommended, and let us hope that David Remnick gets on soon to defend the honor of River Vale vs. Hillsdale in Bergen County…

Immigration and health for elderly Americans

We measure the impact of increased immigration on mortality among elderly Americans, who rely on the immigrant-intensive health and long-term care sectors. Using a shift-share approach we find a strong impact of immigration on the size of the immigrant care workforce: admitting 1,000 new immigrants would lead to 142 new foreign healthcare workers, without evidence of crowd out of native health care workers. We also find striking effects on mortality: a 25% increase in the steady state flow of immigrants to the US would result in 5,000 fewer deaths nationwide. We identify reduced use of nursing homes as a key mechanism driving this result.

That is from a new NBER working paper by David C. Grabowski, Jonathan Gruber & Brian E. McGarry.

My simple model of fertility decline

My core model is both simple and depressing.  Fertility rates have declined around the world because birth control technologies became much better and easier to use.  And people — women in particular — just do not want that many kids.

I do understand that better birth control happened a long time ago, for instance birth control pills become widely available in the wealthier countries in the 1960s, or sometimes the 1970s.  Nonetheless the diffusion of new technologies can be very slow, and for norms to shift it can take generational turnover or even a bit more.  Plus “fertility contagion effects” take a long time to work their way fully through the system.

Those long lags may be difficult to swallow, but social science has numerous examples of very long operative mechanisms.  (Just think of how long it took potential migrants to exploit open borders, for instance pre-WWI.)  Furthermore, fertility rates have indeed been falling for a long time in the wealthier countries.

So a lot of women, once they face the realities of the stress and trying to make ends meet, want only one kid.  You end up with a large number of one kid families, some people who never marry/procreate at all, and a modest percentage of families with 2-4 kids.  There are also plenty of cases cases where the guy leaves, self-destructs, or never marries, after siring a single child with a woman.  That gives you the fertility rates we are seeing, albeit with cultural and economic variation.

Richard Hanania considers why income is not the driving force behind the decline, and why the decline is continuing.

Part of this model is that many women just love having a child.  They love “children” so much that a single child fills up their needs and desires.

I see a similar mechanism in my own life.  I very much enjoy having Spinoza around the house, but I have zero desire to take in another canine.  Whenever I want more “dog attention,” I can assure you that the supply is highly elastic.  Similarly, a single kid can take up a lot of your time and affection, again supply is elastic from the side of the kid.  Maybe parents learning how much they can enjoy a single kid has been another cultural lag?

Under my preference-driven model, fertility declines are very difficult to reverse.  I believe that is also consistent with the evidence to date.

So this is a problem we need to worry about.  The asymptote is rather unpleasant, and the path along the way involve less human well-being, possibly less innovation, and maybe some major fiscal crises as well.

As Arnold Kling would say, “Have a nice day.”

Recursive self-improvement from AI models

With Claude Opus 4.6 and 5.3 Codex, both stellar achievements, the pace is heating up:

OpenAI went from its last Codex release, on December 18, 2025, to what is widely acknowledged to be a much more powerful one in less than two months. This compares to frequent gaps of six months or even a year between releases. If OpenAI can continue at that rate, that means we can easily get four major updates in a year.

But the results from what people in the AI world call “recursive self-improvement” could be more radical than that. After the next one or two iterations are in place, the model will probably be able to update itself more rapidly yet. Let us say that by the third update within a year, an additional update can occur within a mere month. For the latter part of that year, all of a sudden we could get six updates—one a month: a faster pace yet.

It will depend on the exact numbers you postulate, but it is easy to see that pretty quickly, the pace of improvement might be as much as five to ten times higher with AI doing most of the programming. That is the scenario we are headed for, and it was revealed through last week’s releases.

Various complications bind the pace of improvement. For the foreseeable future, the AIs require human guidance and assistance in improving themselves. That places an upper bound on how fast the improvements can come. A company’s legal department may need to approve any new model release, and a marketing plan has to be drawn up. The final decisions lie in the hands of humans. Data pipelines, product integration, and safety testing present additional delays, and the expenses of energy and compute become increasingly important problems.

And:

Where the advance really matters is for advanced programming tasks. If you wish to build your own app, that is now possible in short order. If a gaming company wants to design and then test a new game concept, that process will go much faster than before. A lot of the work done by major software companies now can be done by much smaller teams, and at lower cost. Improvements in areas such as chip design and drone software will come much more quickly. And those advances filter into areas like making movies, in which the already-rapid advance of AI will be further accelerated.

Here is more from me at The Free Press.

Tuesday assorted links

1. Becca Rothfeld and Jordan Salama joining The New Yorker.

2. Discord will be requiring a face scan or ID for full access.  I wonder what induced that change?

3. Meta-study showing that the returns to education are not so high.

4. Is she the most important philosopher in the world? (WSJ)

5. Do not exercise options unless you have to!

6. Motorola announced a 100-year-bond in 1997.

7. Jonathan Bate on Substack.

The politics of using AI

Using new data from the Gallup Workforce Panel, we document a persistent partisan gap in self-reported AI use at work: Democrats are consistently more likely than Republicans to report frequent use. In 2025:Q4, for example, 27.8% of Democrats report using AI weekly or daily, compared with 22.5% of Republicans. Democrats also report deeper task-level integration, using AI in 16% more work activities than Republicans. Consistent with this, Democrats are employed in occupations with higher predicted AI exposure based on task-content measures and report larger perceived differences in AI-related job displacement risk. However, in regression models the partisan gap in AI use disappears once we control for education, industry, and occupation, indicating that observed differences primarily reflect compositional variation rather than political affiliation per se.

That is from a new paper by Nicholas Bloom and Christos Makridis.

Poverty reduction is slowing down

The basic reason why I’m not very optimistic about Africa’s growth prospects under current conditions is that the track record is extremely poor, and there’s little reason to think that anything fundamental has changed. Between 1992 and 2022, median income in China grew at an average annualized rate of 6.6 percent per year; in India it grew at a rate of 2.9 percent per year; but in sub-Saharan Africa it grew at just 1.6 percent per year, less than the rate of growth exhibited in the famously stagnant (and much wealthier) United Kingdom. But in much of the continent the picture has been worse than mere slow growth. Some countries that were relatively stable a few decades ago are now in a state of apparently permanent civil conflict, as in the Democratic Republic of the Congo (DRC) or Somalia; while other countries that have been blessed by relative stability, such as Kenya, Malawi, or Zambia, are poorer on a median income basis than they were in the ‘80s or ‘90s.

There are many things to say about why economic growth in Africa has been so disappointing, from the primacy of extractive resource sectors to the dominance of predatory elites to the poor state of human capital to the ubiquity of corruption to the absence, in many places, of a strong state monopoly on legitimate violence. But these are merely surface-level problems: the fact that these conditions exist in nearly every country in Africa, despite their widely varying historical experiences and the different ideologies with which their states have experimented, suggests that the fundamental problem is not so much with the state but the society underlying the state. If you were to describe this problem briefly, you could do quite well with something like “kinship groups crowd out effective institutions.” African societies have extraordinarily strong kinship ties, such that impersonal institutions and relationships are systematically subordinated to family, clan, and ethnic loyalties; as a result many African societies have found it extraordinarily difficult to build effective states and civil societies that are capable of doing what states and civil societies are supposed to do. (For a more complete elaboration of this view, see my article on why African nations don’t have large firms.) Solving that problem took Europe roughly a millennium; and that was when people didn’t have access to AK-47s.

Here is more from David Oks.

This security will be pricing *something* (but what?)

Alphabet has lined up banks to sell a rare 100-year bond, stepping up a borrowing spree by Big Tech companies racing to fund their vast investments in artificial intelligence this year.

The so-called century bond will form part of a debut sterling issuance this week by Google’s parent company, according to people familiar with the matter. Alphabet was also selling $15bn of dollar bonds on Monday and lining up a Swiss franc bond sale, the people said.

Century bonds — long-term borrowing at its most extreme — are highly unusual, although a flurry were sold during the period of very low interest rates that followed the financial crisis, including by governments such as Austria and Argentina.

Here is more from the FT, let us see how the yield comes in…

For a long time I have been predicting the return of phrenology

Yup:

Human capital—encompassing cognitive skills and personality traits—is central for labor-market success, yet personality remains difficult to measure at scale. Leveraging advances in AI and comprehensive LinkedIn microdata, we extract the Big 5 personality traits from facial images of 96,000 MBA graduates, and demonstrate that this novel “Photo Big 5” predicts school rank, job matching, compensation, job transitions, and career advancement. The Photo Big 5 provides predictive power comparable to race, attractiveness, and educational background, and is only weakly correlated with cognitive measures such as test scores. We show that individuals systematically sort into occupations where their personality traits are valued and earn higher wages when traits align with occupational demands. While the scalability of the Photo Big 5 enables new academic insights into the role of personality in labor markets, its growing use in industry screening raises important ethical concerns regarding statistical discrimination and individual autonomy.

That is from a new NBER working paper by Marius Guenzel, Shimon Kogan, Marina Niessner & Kelly Shue.

Why is Singapore no longer “cool”?

To be clear, I am not blaming Singapore on this one.  But it is striking to me how much Americans do not talk about Singapore any more.  They are much, much more likely to talk about Europe or England, for instance.  I see several reasons for this:

1. Much of the Singapore fascination came from the right-wing, as the country offered (according to some) a right-wing version of what a technocracy could look like.  Yet today’s American political right is not very interested in technocracy.

2. Singapore willingly takes in large numbers of immigrants (in percentage terms), and tries to make that recipe work through a careful balancing act.  That approach still is popular with segments of the right-wing intelligentsia, but it is hardly on the agenda today.  For the time being, it is viewed as something “better not to talk about.”  Especially in light of some of the burgeoning anti-Asian sentiment, for instance from Helen Andrews and some others.  It is much more common that Americans talk about foreign countries mismanaging their immigration policies, for instance the UK and Sweden.

3. Singaporean government looks and feels a bit like a “deep state.”  I consider that terminology misleading as applied to Singapore, but still it makes it harder for many people to praise the place.

4. Singapore is a much more democratic country than most outsiders realize, though they do have an extreme form of gerrymandering.  Whatever you think of their system, these days it no longer feels transgressive, compared to alternatives being put into practice or at least being discussed.  Those alternatives range from more gerrymandering (USA) to various abrogations of democracy (potentially all over).  In this regard Singapore, without budging much on its own terms, seems like much more of a mainstream country than before.  That means there is less to talk about.

4b. Singapore’s free speech restrictions, whatever you think of them, no longer seem so far outside the box.  Trump is suing plenty of people.  The UK is sending police to knock on people’s doors for social media posts, and so on.  That too makes Singapore more of a “normal country,” for better or worse (I would say worse).

5. The notion of an FDI-driven, MNE-driven growth strategy seems less exciting in an era of major tech advances, most of all AI.  Singapore seems further from the frontier than a few years ago.  People are wishing to talk about pending changes, not predictability, with predictability being a central feature of many Singaporean service exports.

6. If you want to talk about unusual, well-run small countries, UAE is these days a more novel case to consider, with more new news coming out of it.

Sorry Singapore, we are just not talking about you so much right now!  But perhaps, in some significant ways, that is a blessing in disguise.  At least temporarily.  I wrote this post in part because I realize I have not much blogged about Singapore for some years, and I was trying to figure out why.

Addendum, from Ricardo in the comments:

These are good points. I would add:

7. It used to be that Singapore was a poster-child of globalization, showing how a country can succeed by opening up free trade, foreign investment, and skilled immigration. Since globalization is uncool on the right, and arguably is uncool across the political spectrum, the country doesn’t serve anyone’s narratives.

As far as the political right is concerned, I would also add:

8. Health care policy is boring for the American right. During the Obama years, it was common to see people on the right bring up Singapore’s health care system as an alternate way of doing things (always ignoring things like the prominent role that state hospitals play in the system and the restrictions put on private health insurance companies there). Now that there isn’t a center-left policy proposal to fight against on the health care front, the example of Singapore is no longer interesting or useful.

Bryan Caplan on immigration backlash

Bryan writes:

Tyler tries to cure my immigration backlash confusion, but not to my satisfaction.  The overarching flaw: He equivocates between two different versions of “backlash to immigration.”

Version 1: Letting in more immigrants leads to more resistance to immigration.

Version 2: Letting in more immigrants leads to so much resistance to immigration that the total stock of immigration ultimately ends ups lower than it would have been.

Backlash in the first sense is common, but no reason for immigration advocates to moderate.  Backlash in the second sense is a solid reason for immigration advocates to moderate, but Tyler provides little evidence that backlash in this sense is a real phenomenon.

Do read the whole thing, but I feel I am obviously right here.  Bryan should read newspapers more!  If I did not provide much evidence that backlash is a significant phenomenon, it is because I thought it was pretty obvious.  A few points:

1. I (and Bryan all the more so) want more immigration than most voters want.  But I recognize that if you strongly deny voters their preferences, they will turn to bad politicians to limit migration.  So politics should respect voter preferences to a reasonable degree, even though at the margin people such as myself will prefer more immigration, and also better immigration rules and systems.

2. The anti-immigrant politicians who get elected are very often toxic.  And across a wide variety of issues.  The backlash costs range far wider than just immigration policies.  (I do recognize this does not apply in every case, for instance Meloni in Italy seems OK enough and is not a destructive force.  She also has not succeeded in limiting migration, and probably cannot do so without becoming toxic.  So maybe that story is not over yet.  In any case, consider how many of the other populist right groups have a significant pro-Russia element, Russia being right now probably the most evil country in the world.)

3. If immigration runs “out of control” (as voters perceive it) in your country, there will be anti-immigrant backlash in other countries too.  For instance in Japan and Poland.  Bryan considers only backlash in the single country of origin.  In Japan, for instance, voters just handed their PM a new and powerful mandate, in large part because of the immigration issue.  The message was “what is happening in other countries, we do not want that happening here.”  The globalization of communications and debate increases the scope and power of the backlash effect considerably.

Most of all, it is simply a mistake to let populist right parties become the dominant force in Europe, and sometimes elsewhere as well.  You might think it is not a mistake because we need them to limit migration.  Well, that is not my view, but I am arguing it is a mistake to get to that margin to begin with.

In short, we need to limit migration to prevent various democracies from going askew.  Nothing in that argument contradicts the usual economic (and other) arguments for a lot of immigration being a good thing.  And still it is a good thing to try to sell one’s fellow citizens on the case for more immigration.  Nonetheless we are optimizing subject to a constraint, namely voter opinion.  Why start off an intertemporal bargaining game by trying to seize as much surplus (immigration) as possible?  That to me is obvious, more obvious every day I might add.

*Codex*

No, this is not an AI post.  Codex is a NYC bookshop at 1 Bleecker St., at Bowery.  It is quite extraordinary in its curation of used books.  The fiction section is large, yet you can pick up virtually any title on the shelves and it is worth reading.  A wonderful place to go to get reading ideas, plus the prices are reasonable and the used books are in decent shape.  Such achievements should be praised.