The US has Relatively Low Rates of Hiring Discrimination

There have now been lots of resume-audit studies in which identical resumes but for the “minority-distinct” name are sent out to employers and callback rates are measured. A meta-study of 97 field experiments (N = 200,000 job applicants) in 9 countries in Europe and North America finds there is some discrimination in every county but, if anything, the USA has one of the lower rates of discrimination while France and perhaps also Sweden have very high levels. These result’s aren’t  that surprising to those who travel but they run counter to the narrative that the US is uniquely or especially discriminatory because of its history of slavery and capitalism. Capitalism, in fact, is likely to predict less discrimination. A picture summarizes. The US is here defined as 1 and these are relative levels after controlling for some basic differences across studies:

The authors make a number of interesting points:

…national histories of slavery and colonialism are neither necessary nor sufficient conditions for a country to have relatively high levels of labor market discrimination. Some countries with colonial pasts demonstrate high rates of hiring discrimination, but several countries without extensive colonial pasts (outside Europe), such as Sweden, demonstrate similar levels. Likewise, the lower rates of discrimination against minorities in the United States than we find for many European countries seem contrary to expectations that emphasize the primacy of connection to slavery in shaping the contemporary level of national discrimination. These results do not suggest that slavery and colonialism do not matter for levels of discrimination, rather they indicate that they matter in more complex ways than suggested by theories that posit simple, direct influences of the past on current discrimination.

And:

High discrimination in the French labor market seems inconsistent with claims made by some scholars that discourse or measurement of race and ethnicity itself will tend to produce more discrimination by promoting “groupism” and group stereotypes (Sniderman and Hagendoorn 2007). The efforts in France not to measure or formally discuss race or ethnicity do not seem to have led to less discrimination.

And, reminisicent of Agan and Starr’s work on ban the box policies:

…the cross-national differences we find should not be read as primarily reflecting national levels of prejudice or as indicators of national levels of racism. Our discrimination measures are specific to hiring, and some evidence suggests national levels in discrimination in other outcomes may be different. For instance,we find low hiring discrimination in Germany,15 but Germany has not been found to be low on housing discrimination (Auspurg, Schneck, and Hinz 2018), suggesting weak antiminority prejudice may not account for this result. More likely, low discrimination in Germany could be a result of distinctive hiring practices in Germany: Employees typically submit far more extensive background information at initial application than in most other countries—including, for instance, high school transcripts and reports from apprenticeships (Weichselbaumer 2016). This may reduce the tendency of employers to assume lower skills and qualifications among nonwhite applicants, which is one potential source of discrimination. If so, this suggests the importance of high levels of individual information about applicants as a method to mitigate discrimination (c.f., Wozniac 2015; Auspurg et al. 2018).

It’s notable that these studies have mostly been done in Western capitalist democracies. I would bet that discrimination rates would be much higher in Japan, China and Korea not to mention Indonesia, Iraq, Nigeria or the Congo. Understanding why discrimination is lower in Western capitalist democracies would reorient the literature in a very useful way.

Hat tip: Jay Van Bavel.

Will a nuclear weapon be launched in combat by the end of 2023?

This prediction is from Manifold Markets. Metaculus gives similar odds to a similar question. These are serious predictions.

In a 2019 post I pointed out that expert surveys (not markets) suggested the annualized probability of a nuclear war was on the order of  ~1%–and I thought that was worryingly high. We are now at ten times that level. This is very, very bad.

Open the Skies!

Here’s a list of the world’s top ten airlines:

  1. Qatar Airways
  2. Singapore Airlines
  3. Emirates
  4. ANA (All Nippon Airways)
  5. Qantas Airways
  6. Japan Airlines
  7. Turkish Airlines
  8. Air France
  9. Korean Air
  10. Swiss International Air Lines

The airlines in this list have at least two things in common: None of world’s best airlines are US owned and none of them are allowed to operate domestically in the United States. The two common elements are related because so-called “cabotage laws” prohibit foreign airlines from serving domestic travelers.

Imagine what international travel would be like if you could only fly on a US owned airline? Ok it’s not that hard to imagine. Restricting international flights to domestic airlines would make international travel much more expensive and more inconvenient. The US State Department rightly lauds the Open Skies Agreements that have brought competition to international flights:

Since 1992 the United States has pursued an “Open Skies” policy designed to eliminate government intervention in airline decision-making about routes, capacity, and pricing in international markets…Open Skies agreements expand cooperative marketing opportunities between airlines, liberalize charter regulations, improve flexibility for airline operations, and commit both governments to high standards of safety and security.  They are pro-consumer, pro-competition, and pro-growth, and facilitate countless new cultural links worldwide.

True! But US domestic flights fly on Closed Skies. Europe has opened up competition to all European airlines. Indeed, Europe is also substantially open to US carriers, but the US is closed to foreign carriers for domestic flights. Cabotage laws are, in effect, a Jones Act for the airlines.

In an good review, Scott Lincicome summarizes:

Europe’s deregulatory experiences—and our own—show that nixing cabotage restrictions would not only put additional downward pressure on fares but also likely improve route coverage and maybe even customer service.

NASA Reduces Existential Risk!

Congratulations to NASA for a direct hit on an asteroid with the goal of shifting its orbit and proving the feasibility of protecting the planet. A great step for mankind!

Tyler and I use asteroid defense as an example of a true public good in our textbook, Modern Principles. Here’s the video from our textbook. Not quite so dramatic but funnier!

Petrov Day!

Today we honor Stanislav Yevgrafovich Petrov whose calm actions and general humanity helped to prevent a nuclear war on September 26th, 1983. The NYTimes reported the events on Petrov’s death in 2017.

Early on the morning of Sept. 26, 1983, Stanislav Petrov helped prevent the outbreak of nuclear war.

A 44-year-old lieutenant colonel in the Soviet Air Defense Forces, he was a few hours into his shift as the duty officer at Serpukhov-15, the secret command center outside Moscow where the Soviet military monitored its early-warning satellites over the United States, when alarms went off.

Computers warned that five Minuteman intercontinental ballistic missiles had been launched from an American base.

“For 15 seconds, we were in a state of shock,” he later recalled. “We needed to understand, ‘What’s next?’ ”

The alarm sounded during one of the tensest periods in the Cold War. Three weeks earlier, the Soviets had shot down a Korean Air Lines commercial flight after it crossed into Soviet airspace, killing all 269 people on board, including a congressman from Georgia. President Ronald Reagan had rejected calls for freezing the arms race, declaring the Soviet Union an “evil empire.” The Soviet leader, Yuri V. Andropov, was obsessed by fears of an American attack.

Colonel Petrov was at a pivotal point in the decision-making chain. His superiors at the warning-system headquarters reported to the general staff of the Soviet military, which would consult with Mr. Andropov on launching a retaliatory attack.

After five nerve-racking minutes — electronic maps and screens were flashing as he held a phone in one hand and an intercom in the other, trying to absorb streams of incoming information — Colonel Petrov decided that the launch reports were probably a false alarm.

As he later explained, it was a gut decision, at best a “50-50” guess, based on his distrust of the early-warning system and the relative paucity of missiles that were launched.

Colonel Petrov died at 77 on May 19 in Fryazino, a Moscow suburb, where he lived alone on a pension. The death was not widely reported at the time. 

A White Supremacist Under Every Bed

AlphaHistory: The Red Scare (1947-57) was a decade-long period of intense anti-communist paranoia in the United States. During this period, millions of ordinary Americans were paralysed by an irrational fear of ‘Reds under the bed’ – the belief that thousands of communist agents and sympathisers were secretly living amongst them, plotting or waiting to overthrow the government.

Today, we live under the White Supremacist Scare, the irrational fear that there is a white supremacist under every bed. An email sent to the parents of University of Virginia students, for example, warns that “events have occurred on Grounds that have been cause for concern” and “the nature and timing of these events have caused some to speculate that they are linked or part of a larger pattern of racially motivated crimes…”. Here is one such event:

Last weekend, several community members reported that a flag bearing a symbol that looked either like a crown or an owl, depending on how the flag is held, was left on the grass near the Memorial to Enslaved Laborers. That same person also left a check for $888.88 that was ultimately delivered, as a surprise, to a student’s room, and the check had the same symbol that was on the flag. As rumors swirled around this bizarre set of events, some speculated that the flag represented a white supremacist organization and that the check was somehow a targeted act of intimidation against a student of color.

A crown! An owl! A check for $888.88! Heil Hitler! It seems odd that giving a check to someone is “targeting” a person of color. But no matter. Logic isn’t important here. What else could this mean but white supremacy? Bear in mind that this is a university where streaking the lawn is a tradition and there are weird numbers, signs, and sigils all over campus.

The UVA police and the FBI—yes, the FBI!—were called in to investigate (n.b. there isn’t even a hint of any crime!). And they got the culprit! Of course, what they discovered was entirely banal. Does it even matter?

“…we discovered that he is part of an organization focusing on micro-philanthropy that occasionally engages in random acts of kindness to current students.”

Moreover, the UVA administration is advertising their investigation, as if how seriously they took this potential threat is a credit to the organization instead of an embarrassment of poor judgment and fevered imagination.

The End of History (of Philosophy)

Hanno Sauer on why philosophers spend far too much time reading and writing about dead philosophers:

What credence should we assign to philosophical claims that were formed without any knowledge of the current state of the art of the philosophical debate and little or no knowledge of the relevant empirical or scientific data? Very little or none. Yet when we engage with the history of philosophy, this is often exactly what we do. In this paper, I argue that studying the history of philosophy is philosophically unhelpful. The epistemic aims of philosophy, if there are any, are frustrated by engaging with the history of philosophy, because we have little reason to think that the claims made by history’s great philosophers would survive closer scrutiny today. First, I review the case for philosophical historiography and show how it falls short. I then present several arguments for skepticism about the philosophical value of engaging with the history of philosophy and offer an explanation for why philosophical historiography would seem to make sense even if it didn’t.

A devastating example:

Consider Plato’s or Rousseau’s evaluation of the virtues and vices of democracy. Here is a (non-exhaustive) list of evidence and theories that were unavailable to them at the time:
  • Historical experiences with developed democracies
  • Empirical evidence regarding democratic movements in developing countries
  • Various formal theorems regarding collective decision making and preference aggregation, such as the Condorcet Jury-Theorem, Arrow’s Impossibility-Results, the Hong-Page-Theorem, the median voter theorem, the miracle of aggregation, etc.
  • Existing studies on voter behavior, polarization, deliberation, information
  • Public choice economics, incl. rational irrationality, democratic realism
The whole subsequent debate on their own arguments…When it comes to people currently alive, we would steeply discount the merits of the contribution of any philosopher whose work were utterly uninformed by the concepts, theories and evidence just mentioned (and whatever other items belong on this list). It is not clear why the great philosophers of the past should not be subjected to the same standard. (Bear in mind that time and attention are severely limited resources. Therefore, every decision we make about whose work to dedicate our time and attention to faces important trade-offs.)

This is obviously true so I think the more interesting question is why do philosophers do this?

Hat tip: Jason Brennan

Taxing Mechanical Engineers and Subsidizing Drama Majors

In The Student Loan Giveaway is Much Bigger Than You Think I argued that the Biden student loan plan would incentivize students to take on more debt and incentivize schools to raise tuition with most of the increased costs being passed on to taxpayers through generous income based repayment plans. Adam Looney at Brookings takes a deep dive into the IDR plan and concludes that it’s even worse than I thought. Here are some of Looney’s key points:

  • As recently as 2017, CBO projected that student loan borrowers would, on average, repay close to $1.11 per dollar they borrowed (including interest). Borrowing was often perceived to be the least favorable way to pay for college. But under the administration’s IDR proposal (and other regulatory changes), undergraduate borrowers who enroll in the plan might be expected to pay approximately $0.50 for each $1 borrowed—and some can reliably expect to pay zero. As a result, borrowing will be the best way to pay for college. If there’s a chance you’ll not need to repay all of the loan—and it’s likely that a majority of undergraduate students will be in that boat—it will be a financial no-brainer to take out the maximum student loan.
  • The data shows that roughly half of Americans with some college experience but not a BA would qualify for zero payments under the proposal, as would about 25% of BA graduates. However, the vast majority of students (including more than 80% of BA recipients) would qualify for reduced payments.
  •  [A] lot of student debt represents borrowing for living expenses, and thus a sizable share of the value of loans forgiven under the IDR proposal will be for such expenses…A graduate student at Columbia University can borrow $30,827 each year for living expenses, personal expenses, and other costs above and beyond how much they borrow for tuition. A significant number of those graduates can expect those borrowed amounts to be forgiven. That means that the federal government will pay twice as much to subsidize the rent of a Columbia graduate student than it will for a low-income individual under the Section 8 housing voucher program…

Looney agrees that the incentive to increase tuition will apply to some graduate and professional programs but he thinks there is less room to increase tuition at undergraduate programs because borrowing is capped (currently! AT) at fairly low rates. But he offers an even more plausible but disheartening scenario that takes us in exactly the wrong direction.

Because the IDR subsidy is based primarily on post-college earnings, programs that leave students without a degree or that don’t lead to a good job will get a larger subsidy. Students at good schools and high-return programs will be asked to repay their loans nearly in full. Want a free ride to college? You can have one, but only if you study cosmetology, liberal arts, or drama, preferably at a for-profit school. Want to be a nurse, an engineer, or major in computer science or math? You’ll have to pay full price (especially at the best programs in each field). This is a problem because most student outcomes—both bad and good—are highly predictable based on the quality, value, completion rate, and post-graduation earnings of the program attended. IDR can work if designed well, but this IDR imposed on the current U.S. system of higher education means programs and institutions with the worst outcomes and highest debts will accrue the largest subsidies.

Looney does a back of the envelope calculation and estimates that typical graduates in Mechanical Engineering will on average get a 0% subsidy but graduates in Music will get a 96% subsidy, in Drama a 99% subsidy and Masseuses a 100% subsidy on average. This of course is exactly the wrong approach. If we are going to subsidize, we should subsidize degrees with plausible positive spillovers not masseues.

The problem is not just the subsidy but the encouragement this gives to create low-value programs:

  • …institutions will have an incentive to create valueless programs and aggressively recruit students into those programs with promises they will be free under an IDR plan….The fact that a student can take a loan for living expenses (or even enroll in a program for purposes of taking out such a loan) makes the loan program easy to abuse. Some borrowers will use the loan system as an ATM, taking out student loans knowing they’ll qualify for forgiveness, and receiving the proceeds in cash, expecting not to repay the loan….I suspect that such abuses will be facilitated by predatory institutions.

Overall, the student loan program, as currently written, is looking to be one of the most costly, inefficient and unwise government programs of the 21st century. As I said in my first post, “fixing” the program is likely to drive ever more increasing intervention into higher education much as has happened with health care. My guess is that no one really thought this albatross through.

John Stuart Mill was Woke and Based

I love that John Stuart Mill was woke and based:

Looking at democracy in the way in which it is commonly conceived, as the rule of the numerical majority, it is surely possible that the ruling power may be under the dominion of sectional or class interests, pointing to conduct different from that which would be dictated by impartial regard for the interest of all. Suppose the majority to be whites, the minority negroes, or vice versâ: is it likely that the majority would allow equal justice to the minority? Suppose the majority Catholics, the minority Protestants, or the reverse; will there not be the same danger? Or let the majority be English, the minority Irish, or the contrary: is there not a great probability of similar evil? In all countries there is a majority of poor, a minority who, in contradistinction, may be called rich. Between these two classes, on many questions, there is complete opposition of apparent interest.

From Considerations on Representative Government.

Prediction Markets Should Be Legal

I submitted a public comment on Kalshi’s request to the CFTC to create a prediction market on which political party will be in control of each chamber of the U.S. Congress.

Political election markets have proven themselves to be a powerful tool for forecasting elections and are typically more accurate, timely and complete than alternative methods such as polls. These markets have been widely used by researchers to understand political behaviour, institutions and events. e.g. see the research summarized here

https://www.nber.org/papers/w18222

and an important application to understanding the costs of war here:

https://onlinelibrary.wiley.com/doi/full/10.1111/j.1468-0335.2008.00750.x

Political election markets are also useful to hedgers, traders and other market participants to help them predict and incorporate information about risks into asset prices.

Markets similar to political election markets have been used to predict other important events such as the prospects for war or scientific breakthroughs and have been adopted by firms to better estimate sales forecasts and other relevant events.

The United States has pioneered the use of these innovative markets and we should continue to lead in creating better means of aggreating information to improve the quality of decision making.

The David J. Theroux Chair in Political Economy: Job Opportunity

The Independent Institute is seeking a capable intellectual leader with a deep and energetic commitment to classical liberal principles, an ability to communicate and connect with others, and the qualities and drive to help perpetuate David J. Theroux’s vision in the research program of the organization in the decades ahead.

As part of Independent’s commitment to excellence, continuous improvement and teamwork, the David J. Theroux Chair is responsible for ensuring that all research activities have intrinsic intellectual merit and would have a significant impact in the service of Independent’s mission to boldly advance peaceful, prosperous, and free societies, grounded in a commitment to human worth and dignity.

The Theroux Chair will ensure that Independent’s scholarship, research and peer-reviewed publications adhere to the highest scholarly standards; provide leadership in support of acquisitions, peer review, author relations, and editorial quality; collaborate with Independent’s other experts to ensure that research, content, and promotional plans and activities are appropriately aligned; and in broad terms sustain Independent’s reputation as a well-respected policy institute.

The Theroux Chair will network with scholars, academic and policy organizations, and professional organizations, in leveraging and promoting mutual efforts in advancing classical liberal analytical methods and aspirations. As opportunities present themselves, the Theroux Chair will organize conferences, symposia, and other events.

More information here.

The “Little Scandinavia” Prison Project

The Scandinavian Prison Project…seeks to empirically assess what happens when certain practices and principles from Scandinavian corrections are implemented in an American prison setting. The project focuses on an ongoing collaboration between the Pennsylvania Department of Corrections (PA DOC), the Norwegian Correctional Service (Kriminalomsorgen), the Swedish Prison and Probation Service (Krimnalvården), and the Danish Prison and Probation Service (Kriminalforsorgen).

…The “Little Scandinavia” unit differs from the regular conditions of confinement at SCI Chester in many important respects. With single cells, custom furniture, a communal kitchen, redesigned common areas, and an outdoor green space, the unit looks unlike any other. Moreover, the officers on the project have, in addition to travelling to Scandinavia to work alongside peer mentors, received training in conflict resolution, suicide prevention and other relevant skills. The uniquely low ratio of trained staff to incarcerated men is intended to facilitate positive interactions and encourage meaningful communication between the people living and working on the unit.

…Importantly, we chose to use a lottery as opposed to the more common (and to some more intuitive) approach of only allowing the most motivated or best-behaved incarcerated people to move to the unit for two main reasons. First, from an ethical perspective, we believe it is more fair and transparent to the incarcerated men to allow all—irrespective of their past behavior and current standing with staff or management—an opportunity to take part in new, potentially beneficial programs in the prison if they wish to do so. Second, using a lottery means that we can meaningfully compare the group of men housed at “Little Scandinavia” to those in the general population. Having two groups that are as similar as possible—with the exception of their conditions of confinement—is important when seeking to develop evidence on the direct impact of the unit on both in-prison and out-prison outcomes, including recidivism and other measures of community reintegration. The research team will also focus our efforts in the months and years to come on following the staff who work on the unit. In particular, we are interested in learning more about how the changing working environment impacts their stress levels, motivation, and professional identities.

I am very interested in the results of this experiment. Although people say that America is different, I think less brutal prisons and more work on reintegration can work here in principle. One issue is that I can see the experiment working both better and worse as an island in a sea of American prisons as opposed to in full equilibrium.

Kudos to Arnold Ventures for being one of the supporters of the research.

The photo isn’t from the Ikea catalogue but a room in a high-security Norwegian prison.

Hat tip: Matt Bruenig. Photo Credit.

Plastic Might Be Making You Fat

WashPost: An emerging view among scientists is that one major overlooked component in obesity is almost certainly our environment — in particular, the pervasive presence within it of chemicals which, even at very low doses, act to disturb the normal functioning of human metabolism, upsetting the body’s ability to regulate its intake and expenditure of energy.

Some of these chemicals, known as “obesogens,” directly boost the production of specific cell types and fatty tissues associated with obesity. Unfortunately, these chemicals are used in many of the most basic products of modern life including plastic packaging, clothes and furniture, cosmetics, food additives, herbicides and pesticides.

Ten years ago the idea of chemically induced obesity was something of a fringe hypothesis, but not anymore.

“Obesogens are certainly a contributing factor to the obesity epidemic,” is what Bruce Blumberg, an expert on obesity and endocrine-disrupting chemicals from the University of California, Irvine, told me by email. “The difficulty is determining what fraction of obesity is related to chemical exposure.”

An important piece of evidence is something I pointed to in my post The Animals are Also Getting Fat namely, cats and dogs are getting fatter and so are rats and so (very importantly) are control mice fed a very standard diet. I hadn’t realized there is also some experimental evidence.

 In particular, consequences of chemical exposure may not appear during the lifetime of an exposed organism but can be passed down through so-called epigenetic mechanisms to offspring even several generations away. A typical example is tributyltin or TBT, a chemical used in wood preservatives, among other things. In experiments exposing mice to low and supposedly safe levels of TBT, Blumberg and his colleagues found significantly increased fat accumulation in the next three generations.

Overall, I find the chemical story plausible–people in the past, even rich people, just didn’t get fat so easily–but my skepticism rises whenever I hear the word epigenetics.

AEA Hypocrisy

Here’s the AEA’s official statement on inclusion:

The AEA seeks to create a professional environment with equal opportunity and fair treatment for all economists, regardless of age, sex, gender identity and expression, race, ethnicity, national origin, religion, sexual orientation, disability, health condition, marital status, parental status, genetic information, political affiliation, professional status, or personal connections.

Yet the AEA is requiring any attendees at the annual meeting to be vaccinated and boosted, a standard which excludes half of the US population! How is that equal opportunity and fair treatment? I suppose some people will want to say “health condition” doesn’t include vaccinated or not…dubious legerdemain…but there’s no question the AEA vaccination policy is a huge violation of the spirit of inclusion.