Category: Data Source
Very good New York Times sentences Arlington fact of the day
“Consider Arlington, Va., our best guess for where you might be reading this article.”
That is from an excellent NYT piece on health care and prices. The very interesting original research is here (pdf), main point is that where (properly adjusted) Medicare spending is high is surprisingly uncorrelated with where private health care spending is high. Furthermore policy may have been encouraging too many hospital mergers.
Here is Kevin Drum summarizing the study’s results on the importance of competition.
Is America’s middle class diminishing?
I’ve been reading through the new Pew report (pdf) on this question. I found these to be the two most interesting passages:
As the middle-income population hovers near minority status, the population of upper-income adults is growing more rapidly than the population of lower-income adults. From 1971 to 2015, the number of adults in upper-income households increased from 18.4 million to 51 million, a gain of 177%. During the same period, the number of adults in lower -income households increased from 33.2 million to 70.3 million, a gain of 112%.
I would say America is developing its top twenty percent rather nicely. The future refrain will have to be: “We are the eighty percent!”, or something like that. Then there is this:
The biggest winners since 1971 are people 65 and older. This age group was the only one that hada smaller share in the lower-income tier in 2015 than in 1971. Not coincidentally, the poverty rate among people 65 and older fell from 24.6% in 1970 to 10% in 2014. Evidence shows that rising Social Security benefits have played a key role in improving the economic status of older adults. The youngest adults, ages 18 to 29, are among the notable losers with a significant rise in their share in the lower-income tiers.
That part augurs not so well for our future, given a certain degree of persistence of earnings.
I was part of an NPR On Point discussion of the study.
In which English counties was the Industrial Revolution most strongly rooted?
There is a new and very interesting paper by Morgan Kelly, Joel Mokyr, and Cormac Ó Gráda on this topic, here is the abstract:
We analyze factors explaining the very different patterns of industrialization across the 42 counties of England between 1760 and 1830. Against the widespread view that high wages and cheap coal drove industrialization, we find that industrialization was restricted to low wage areas, while energy availability (coal or water) had little impact Instead we find that industrialization can largely be explained by two factors related to the human capability of the labour force. Instead of being composed of landless labourers, successful industrializers had large numbers of small farms, which are associated with better nutrition and height. Secondly, industrializing counties had a high density of population relative to agricultural land, indicating extensive rural industrial activity: counties that were already reliant on small scale industry, with the technical and entrepreneurial skills this generated, experienced the strongest industrial growth. Looking at 1830s France we find that the strongest predictor of industrialization again is quality of workers shown by height of the population, although market access and availability of water power were also important.
Garett Jones, telephone! Here is a related paper on human capital and industrialization (pdf), in that study it is the elites who matter. And here is a new Eric Chaney paper (pdf) on the decline of Islamic science and the role of political elites.
I also found this summary bit from the first paper interesting: “…the early Industrial Revolution was less about the sudden appearance of radically new technologies than about improving fairly familiar technologies to the stage where they became commercially viable…”
Do compensating differentials play a key role in boosting inequality?
Isaac Sorkin is a job candidate from the University of Michigan, and he has some fascinating new research on that question. Here is the abstract:
Firms account for a substantial share of earnings inequality. Although the standard explanation for why is that search frictions support an equilibrium with rents, this paper finds that compensating diff erentials are at least as important. To reach this finding, this paper develops a structural search model and estimates it on U.S. administrative data with 1.5 million firms and 100 million workers. The model analyzes the revealed preference information contained in how workers move between firms. Compensating di fferentials are revealed when workers systematically move to lower-paying fi rms, while rents are revealed when workers systematically move to higher-paying firms. With the number of parameters proportional to the number of firms (1.5 million), standard estimation approaches are infeasible. The paper develops an estimation approach that is feasible for data on this scale. The approach uses tools from numerical linear algebra to measure central tendency of worker flows, which is closely related to the ranking of firms revealed by workers’ choices.
The paper is here.
Here is Adam Ozimek on the research. I would put it this way: very often when workers switch jobs, they take a pay cut, voluntarily, in return for better amenities. In this regard “true inequality” is lower than measured income inequality would suggest.
See also Isaac’s paper on the long-run effects of the minimum wage.
Rhetoric so often fails to achieve what we wish to achieve
Mr. Obama also said, “It is our responsibility to reject religious tests on who we admit into this country.” But negative searches about Syrian refugees rose 60 percent. Searches asking how to help Syrian refugees dropped 35 percent. The president asked us to “not forget that freedom is more powerful than fear.” But searches for “kill Muslims” tripled during his speech.
There was one line, however, that did trigger the type of response Mr. Obama might have wanted. He said, “Muslim Americans are our friends and our neighbors, our co-workers, our sports heroes and yes, they are our men and women in uniform, who are willing to die in defense of our country.”
After this line, for the first time in more than a year, the top Googled noun after “Muslim” was not “terrorists,” “extremists” or “refugees.” It was “athletes,” followed by “soldiers.” And, in fact, “athletes” kept the top spot for a full day afterward.
That is from a fascinating new piece by Evan Soltas and Seth Stephens-Davidowitz.
Is there actually good news on carbon emissions?
From a recent issue of Nature, from Robert B. Jackson, et.al.:
Rapid growth in global CO2 emissions from fossil fuels and industry ceased in the past two years, despite continued economic growth. Decreased coal use in China was largely responsible, coupled with slower global growth in petroleum and faster growth in renewables.
I would call that speculative, most of all because we don’t know how much of China’s current economic and thus coal-burning slowdown is cyclical rather than structural. Still, it might be true.
How much news has this received, relative to the Paris meetings? Less than a hundredth, I suspect. Typical readers and viewers are far more interested in the deliberate actions of high-status political leaders than they are interested in underlying structural developments, even when the latter are probably of more import. We need dramatic stories with prestigious protagonists, leading the way. Even if some hate those individuals and their status, at least they then have someone to rail against, as indeed you will find in the comments section of this blog, among many other places.
This is just one way in which I feel the world I live in is a delusion and shadow play, relative to the truth.
The original pointer was from Marc Andreessen, with later re-emphasis from Noah Smith.
China’s workforce could rise rather than fall
That is the subject of a new FT article by Steve Johnson. I’ve already covered this on MR, but here is a recap of some of Johnson’s points:
1. Official pension ages in urban areas are 50 for blue-collar women, 55 for white-collar women and 60 for men. Those could be raised by the government thereby boosting the labor force. For instance, in terms of actual practice, at age 60 only 55 of urban Chinese men are still in the labor force, and just one-third of urban Chinese women are still in the labor force.
2. Chinese pension policy penalizes late retirement and this easily could be changed.
As Johnson writes: “…if China adopted measures to retain older workers in the labor force, its working population would barely fall at all until at least the mid-2030s.”
With more women working, China in 2040 might have a labor force as large as it has today. If the retirement issue and the gender issue are both solved, China’s labor force in 2040 likely will be 10 percent higher than it is today.
So the common meme of “the Chinese labor force is about to start shrinking” doesn’t really have to be true. The Chinese economy has many problems, but I think this one is overrated. And we haven’t even talked yet about possible productivity increases.
Last Minute Gift Shopping by Gender of Spouse
A timely chart from Christopher Ingraham at Wonkblog. Christopher concludes that compared to wives, husbands wait till the last minute to gift shop for their spouse. A plausible interpretation, although do note that it’s not the case that women are searching earlier just less.
Economists don’t know what they are talking about
I am sorry, I would not have written that post title a few months ago, as it is not in general my style. But I am disheartened by the recent Booth poll of economists, where the weight of opinion suggests that the Fed should raise rates this December. Only seventeen percent say “uncertain,” when in my view that is obviously the correct answer. I won’t myself say “don’t raise rates,” but there are enough good arguments for that view (see Krugman for instance) that it deserves more than 19% support. In the space for comments, there was not a lot of talk about how outlining the broader path for monetary policy was a better and more important question.
This same group, in September, gave a lot of support to the idea of a $15 national minimum wage, a policy change which Alan Krueger himself rejects. How many of those supportive economists were primed to first think of typical manufacturing wages in Mississippi?
You people on that panel, you are all better economists than I am. Except when you are allowed to vote.
But quite seriously, my opinion of the professional consensus — on topics outside an individual’s research specialty — really has gone down as a result of these polls. And, not to put too fine a gloss on it, but my opinion of myself has gone up. Why should I not just come out and say it?
The marginal value of health care and hospital admission
Here is the job market paper of Nathan Petek, from the Booth School of Business, University of Chicago:
Abstract: The marginal benefit of health care determines the extent to which policies that change health care consumption affect health. I use variation in access to hospitals caused by nearly 1,300 hospital entries and exits to estimate the marginal benefit of inpatient care. I show that hospital entries and exits cause sharp changes in the quantity of inpatient care, but there is no evidence of an effect on average mortality with tight confidence intervals. I find suggestive evidence of an effect on mortality in rural areas and for the over-65 population with magnitudes that imply the marginal benefit of inpatient care is significantly higher for these populations than for the average patient.
Even for rural areas and the elderly, an effect is not seen until more than a year after the event.
By the way, $900 billion is spent annually at U.S. hospitals.
For the pointer I thank David, a loyal MR reader.
Why medical progress is difficult
Here is part of the abstract of a new NBER paper from Gisela Hostenkamp and Frank R. Lichtenberg:
We use Danish diabetes registry and health insurance data to analyze the extent, consequences, and determinants of under-use and overuse of oral anti-diabetic drugs.
Less than half of patients consume the appropriate amount of medication–between 90% and 110% of the amount prescribed by their doctors.
The life expectancy of patients consuming the appropriate amount is 2.5 years greater than that of patients consuming less than 70% of the prescribed amount, and 3.2 years greater than that of patients consuming more than 130% of the prescribed amount, controlling for time since diagnosis, insulin dependence, comorbidities, age, gender and education. Patients consuming the appropriate amount are also less likely to be hospitalized than under- or over-users.
And of course that is from Denmark, which is supposed to be a culture with relatively strong norms of conscientiousness.
What makes geeks tick? A study of Stack Overflow careers
That is the job market paper from Lei Xu, at McGill University, co-authored with Nian and Cabral at NYU’s Stern School. Here is the abstract:
Many online platforms such as Yahoo! Answers and GitHub rely on users to voluntarily provide content. What motivates users to contribute content for free however is not well understood. In this paper, we use a revealed preference approach to show that career concerns play an important role in user contributions to Stack Overflow, the largest online Q&A community. We investigate how activities that can enhance a user’s reputation vary before and after the user finds a new job. We contrast this with activities that do not help in enhancing a user’s reputation. After finding a new job, users contribute 25% less in reputation-generating activity on Stack Overflow. By contrast, they reduce their non-reputation-generating activity by only 8% after finding a new job. These findings suggest that users contribute to Stack Overflow in part because they perceive this as a way to improve future employment prospects. We provide direct evidence against alternative explanations such as integer constraints, skills mismatch, and dynamic selection effects. The results also suggest that, beyond altruism, career concerns play an important role in explaining voluntary contributions on Stack Overflow.
I think of this as yet another paper on how reputation can (sometimes, not always) enable the private production of public goods.
How did China’s Cultural Revolution affect adolescent outcomes for the rusticated?
Yes, I thought this year it was time to search the job market candidates at National University of Singapore. I ran across some fascinating work by Huihua Xie:
Does a difficult environment in early life shape people’s core beliefs and values? We examine the long-term impact of the send-down movement during China’s Cultural Revolution, when urban educated youths were forced out of cities to work and live in undesirable rural areas. The mandatory policy applied to urban youth who graduated from junior or senior high school between 1966 and 1976. We identify the send-down effect by regression discontinuity, comparing individuals who graduated just before and just after the implementation of the policy. Using individual-level survey data, we find that rusticated individuals value family and relationships more highly, are less likely to believe in luck as the most important factor for success, and support social equality more strongly.
The paper, with Jie Gong and Yi Lu, is here, under resubmission at the JPE. She also has an interesting paper on how being rusticated during the Cultural Revolution led to later problems with chronic illness and mental health. Yet another paper considers whether and how the education of your sibling can make you better off or worse off, using regression discontinuity methods.
Europe pollution fact of the day
Europe’s air is less corrosive than it once was, and much less foul than China’s or India’s. Industrial decline and clean-air policies since the 1950s have brought levels of many pollutants, such as sulphur dioxide, fine particulate matter (a dust that can irritate lungs), and nitrogen oxides down over the past few decades. Yet more than 400,000 Europeans still die prematurely each year because of air pollution, according to the European Environmental Agency. In 2010 the health-related costs were thought to be between €330 billion ($437 billion) and €940 billion, or 3%-7% of GDP.
Nine out of ten European city-dwellers are exposed to pollution in excess of guidelines produced by the World Health Organisation (WHO). Some of the highest levels of nitrogen dioxide are found in London; several cities in Turkey are choked with high levels of PM10 (particulate matter of at most 10-micron diameter). But some of the worst pollution is in Eastern Europe (see map). Coal-fired power stations are still common there, and some pollutants blow in from the rest of Europe. The commission is prosecuting 18 governments for infringing pollution limits.
Researchers at King’s College London have found that a child born in London in 2010 can expect to have his life cut short by nine months as a result of breathing its high levels of PM2.5—the very finest particulate matter—if pollution levels do not change.
That article excerpt is from The Economist.
Denmark fact of the politically incorrect paper of the day
Using Danish matched employer-employee data, this paper estimates the relative productivity of men and women and finds that the gender “productivity gap” is 12 percent–seventy five percent of the 16 percent residual pay gap can be accounted for by productivity differences between men and women.
That is from the job market paper of Yana Gallen, a job market candidate from Northwestern.