Month: November 2019
Learning is Caring: An Agrarian Origin of American Individualism
I am looking forward to reading this one, from Itzchak Tzachi Raz, who is on the job market from Harvard this year:
This study examines the historical origins of American individualism. I test the hypothesis that local heterogeneity of the physical environment limited the ability of farmers on the American frontier to learn from their successful neighbors, turning them into self-reliant and individualistic people. Consistent with this hypothesis, I find that current residents of counties with higher agrarian heterogeneity are more culturally individualistic, less religious, and have weaker family ties. They are also more likely to support economically progressive policies, to have positive attitudes toward immigrants, and to identify with the Democratic Party. Similarly, counties with higher environmental heterogeneity had higher taxes and a higher provision of public institutions during the 19th century. This pattern is consistent with the substitutability of formal and informal institutions as means to solve collective action problems, and with the association between “communal” values and conservative policies. These findings also suggest that, while understudied, social learning is an important determinant of individualism.
Here is the home page, the paper is not yet available. Here is his actual job market paper, on adverse possession. I do hope the author lets me know once this paper is ready, I am very much looking forward to reading it.
Saturday assorted links
What should I ask Esther Duflo?
I will be doing a Conversation with her, no associated public event, so what should I ask?
I thank you all in advance for your sage wisdom and counsel.
Public employee pension and municipal insolvency
This paper studies how governments manage public employee pensions and how this affects insolvency risk. I propose a quantitative model of governments that choose their savings and risk exposure by borrowing/saving in defaultable bonds, borrowing in non-defaultable pension benefits, and saving in a pension fund that earns a risk premium. In insolvency, the government can receive transfers from households who may differ from the government in their preferences for public services and private consumption. I match the model to a panel of CA cities and a hand-collected record of fiscal emergencies. The model predicts that governments are highly vulnerable to another stock market bust. A hypothetical shock to pension funds in 2015 produces twice as many fiscal emergencies as the original 2008-10 shock. In the quantified model, the government undersaves and take excess risk relative to what households would choose. Savings requirements that limit spending to essential services plus 0.3% of cash-on-hand produce large welfare gains for households. Requiring the pension fund to invest more in safe assets decreases household welfare because the lower average return discourages the government from saving.
That is from the job market paper by Sean Myers of Stanford University.
Economists and non-economists on elasticity
From a recent paper by Joanna Venator and Jason Fletcher:
In this paper, we estimate the impacts of abortion clinic closures on access to clinics in terms of distance and congestion, abortion rates, and birth rates. Legislation regulating abortion providers enacted in Wisconsin in 2011-2013 ultimately led to the closure of two of five abortion clinics in Wisconsin, increasing the average distance to the nearest clinic to 55 miles and distance to some counties to over 100 miles. We use a difference-in-differences design to estimate the effect of change in distance to the nearest clinic on birth and abortion rates, using within-county variation across time in distance to identify the effect. We find that a hundred-mile increase in distance to the nearest clinic is associated with 25 percent fewer abortions and 4 percent more births. We see no significant effect of increased congestion at remaining clinics on abortion rates. We find significant racial disparities in who is most affected by abortion clinic closures, with increases in distance increasing birth rates significantly more for Black, Asian, and Hispanic women. Our results suggest that even small numbers of clinic closures can result in significant restrictions to abortion access of similar magnitude to those seen in Texas when a greater number of clinics closed their doors.
There are (at least) two possible responses to such results, and that is without even getting into one’s underlying view of the ethics of abortion. One is to say that a great deprivation has occurred because many fewer women end up having abortions. Another response is to infer that the marginal value of the abortions could not have been so high to begin with, if the number drops off so readily.
The same issue comes up with Obamacare. If the price of health insurance goes up, quite a large number of people decide to go without coverage. Is the size of that number a measure of the human tragedy resulting from the price increase? Or is it a measure of how little those people actually value health insurance? Or somehow both?
I have yet to meet a person who can think through these issues rationally and absorb what is interesting and valid in each of those two perspectives.
Are queens more warlike than kings?
Yes, in a nutshell, as Gordon Tullock used to claim:
Are states led by women less prone to conflict than states led by men? We answer this question by examining the effect of female rule on war among European polities over the 15th-20th centuries. We utilize gender of the first born and presence of a female sibling among previous monarchs as instruments for queenly rule. We find that polities led by queens were more likely to engage in war than polities led by kings. Moreover, the tendency of queens to engage as aggressors varied by marital status. Among unmarried monarchs, queens were more likely to be attacked than kings. Among married monarchs, queens were more likely to participate as attackers than kings, and, more likely to fight alongside allies. These results are consistent with an account in which marriages strengthened queenly reigns because married queens were more likely to secure alliances and enlist their spouses to help them rule. Married kings, in contrast, were less inclined to utilize a similar division of labor. These asymmetries, which reflected prevailing gender norms, ultimately enabled queens to pursue more aggressive war policies.
That is by Oeindrila Dube and S.P. Harish, here is the working paper version, here is the forthcoming in the JPE version.
Friday assorted links
Release Bad News on a Friday
Politicians have long known to release bad news on a Friday and it appears that pharmaceutical firms may do likewise.
Safety alerts are announcements made by health regulators warning patients and doctors about new drug-related side effects. However, not all safety alerts are equally effective. We provide evidence that the day of the week on which the safety alerts are announced explains differences in safety alert impact. Specifically, we show that safety alerts announced on Fridays are less broadly diffused: they are shared 34% less on social media, mentioned in 23% to 66% fewer news articles, and are 12% to 51% less likely to receive any news coverage at all. As a consequence of this, we propose Friday alerts are less effective in reducing drug-related side effects. We find that moving a Friday alert to any other weekday would reduce all drug-related side effects by 9% to 12%, serious drug-related complications by 6% to 15%, and drug-related deaths by 22% to 36%. This problem is particularly important because Friday was the most frequent weekday for safety alert announcements from 1999 to 2016. We show that this greater prevalence of Friday alerts might not be random: firms that lobbied the U.S. Food and Drug Administration in the past are 49% to 56% more likely to have safety alerts announced on Fridays.
From The Friday Effect in Management Science by Diestre, Barber and Santalo.
Hat tip: Kevin Lewis.
The impact of the Affordable Care Act
The Impact of the Affordable Care Act: Evidence from California’s Hospital Sector
(with Mark Duggan and Atul Gupta) R&R, AEJ: Economic PolicyThe Affordable Care Act (ACA) authorized the largest expansion of public health insurance in the U.S. since the mid-1960s. We exploit ACA-induced changes in the discontinuity in coverage at age 65 using a regression discontinuity based design to examine effects of the expansion on health insurance coverage, hospital use, and patient health. We then link these changes to effects on hospital finances. We show that a substantial share of the federally-funded Medicaid expansion substituted for existing locally-funded safety net programs. Despite this offset, the expansion produced a substantial increase in hospital revenue and profitability, with larger gains for government hospitals. On the benefits side, we do not detect significant improvements in patient health, although the expansion led to substantially greater hospital and emergency room use, and a reallocation of care from public to private and better-quality hospitals.
The fall of women’s share in computer science
“Engineering the gender gap: Fall of Women’s Share in Computer Science”
Download Job Market Paper (PDF)
No college major is inherently male or female. In this paper, I explore how gender traditions in the U.S influence women’s academic preferences today. I make two arguments. First, the scientific fields which involve more women today coincide with those science subjects included in home economics, an exclusively feminine field. Second, the percentage of women in computer science decreases when this major relocates to the Engineering School, a traditionally masculine domain. I argue that shaping computer science into an engineering subject has constrained women’s ability to reallocate their human capital in response to the technology shock brought by personal computers.
That is from Yiling Zhao, who is on the job market this year from Northwestern.