Category: Data Source
In defense of Texas jobs performance?
I have now read Matthias Shapiro (not a Perry supporter by the way) and he seems to have the best treatment so far. One excerpt:
Since the recession started hourly wages in Texas have increased at a 6th fastest pace in the nation.
Another:
We can see that Texas has grown the fastest, having increased jobs by 2.2% since the recession started. I want to take a moment and point out that second place is held by North Dakota. I added North Dakota to my list of states to show something very important. North Dakota currently has the lowest unemployment rate of any state at 3.2%. And yet Texas is adding jobs at a faster rate than North Dakota. How can this be?
The reason is that people are flocking to Texas in massive numbers…
As you can see, Texas isn’t just the fastest growing… it’s growing over twice as fast as the second fastest state and three times as fast as the third. Given that Texas is (to borrow a technical term) f***ing huge, this growth is incredible.
People are flocking to Texas in massive numbers. This is speculative, but it *seems* that people are moving to Texas looking for jobs rather than moving to Texas for a job they already have lined up. This would explain why Texas is adding jobs faster than any other state but still has a relatively high unemployment rate.
This piece encompasses, and responds to, all of the “Texas critiques” we have seen so far. And there are good graphs at the link. For the pointer I thank Nate Silver, a tough cookie when it comes to data; he calls it a “great piece.”
Facts about Houston
Kevin Williamson informs us:
The typical owner-occupied home in Brooklyn costs well over a half-million dollars. In Suffolk County it’s nearly $400,000. In Houston? A whopping $130,100. Put another way: In Houston, the median household income is 39 percent of the cost of a typical house. In Brooklyn, the median household income is 8 percent of the cost of the median home, and in Boston it’s only 14 percent. When it comes to homeownership, $1 in earnings in Houston is worth a lot more than $1 in Brooklyn or Boston. But even that doesn’t really tell the story, because the typical house in Houston doesn’t look much like the typical house in Brooklyn: Some 64 percent of the homes in Houston are single-family units, i.e., houses. In Brooklyn, 85 percent are multi-family units, i.e. apartments and condos.
Hat tip goes to Tall Dave, who also has blogged high-IQ dating.
Fear without Function: Do Sex Offender Registries Reduce Crime?
Sex offender registries contain a disturbing amount of information about sex offenders. The Washington DC, registry, for example, provides photos of sex offenders and will map their homes and workplaces down to the block level. The CA registry includes photos and maps unique home addresses. In some states, neighbors are notified by telephone when a registered sex offender moves into the neighborhood.
Sex offenders are often also highly restricted on where they can work and live–so much so, that in some states they have been effectively banished. In CA, sex offenders must be monitored via GPS for life. Many states allow sex offenders to be kept in prison past their sentences, based only on a judge’s opinion that the sex offender might commit a future crime. Bear in mind that teenagers having sex with other teenagers, hiring or trying to hire a prostitute and even streaking can make a person fall under the sex offender statutes. Moreover, contrary to popular belief, sex offenders have low recidivism rates, much lower than for most other crimes.
Why the obsessive focus on sex crimes? I see it as coming from deep and primitive feelings and fears about sex, after all we don’t have homicide registries. At least not yet. Sex offender registries, however, may be the thin end of the wedge. How long will it be before we require monitoring of all convicted criminals? Will we soon wear augmented reality spectacles that list the criminal history of individuals as they pass by on the street (and perhaps also their credit ranking?). Is this really a good idea? At the very least, it’s important to know whether these laws deter crime and if so whether they are cost effective. Two new papers in the Journal of Law and Economics examine these issues.
J.J. Prescott and Jonah Rockoff find that registries can have a modest deterrent effect on crime but that notification laws can increase recidivism. Notification laws and other such punishments can increase recidivism because they make it much harder for registered offenders to find a job and reintegrate into society.
I especially like Amanda Agan’s paper Sex Offender Registries: Fear without Function?. Agan writes:
I find little evidence to support the effectiveness of sex offender registries, either in practice or in potential. Rates of sex offense do not decline after the introduction of a registry or public access to a registry via the Internet, nor do sex offenders appear to recidivate less when released into states with registries. The data from Washington, D.C., indicate that census blocks with more offenders do not experience statistically significantly higher rates of sexual abuse, which implies that there is little information one can infer from knowing that a sex offender lives on one’s block.
Agan’s paper is unusual in that it uses three different datasets and a variety of empirical strategies. It also makes clever use of geocoded crime data and the aforementioned sex offender home and work addresses from the DC registry.
Full Disclosure: Agan’s paper was written, under my direction, when she was an undergraduate at George Mason University. Amanda is now nearing her graduation from the PhD economics program at the University of Chicago.
Sentences to ponder
Already, hundreds more American troops have been killed in Afghanistan during the less than three years of the Obama administration than during the eight years of the George W. Bush administration.
Here is more. I don’t think that “# of Americans killed” is a good final standard for right and wrong, still I believe many Americans would be shocked to see this comparison.
Since the 1980s, spending cuts no longer cause riots
Interestingly, though, since the late 80s, this relationship has broken up and vanished. According to the results, in modern, industrial societies, there is no longer any palpable link between spending cuts and rioting.
In fact there is a correlation in the opposite direction, though it is not statistically significant. Here is much more, about the study which everyone is citing. It doesn’t show what people are saying it shows, unless they see today as like 1926. Arguably the democratization of Eastern Europe is a key factor in changing the results.
QE3: The long and the short of it
Long term rates and short-term rates are linked through arbitrage so a credible commitment to keep short-term rates low for an extended period of time can also generate a movement in long-term rates, as Justin Wolfers points out. According to Macroeconomic Advisors the effect can be quite large:
In principle, FOMC communications can be very powerful. If the FOMC could encourage the market to shift out its expectation of the time of the first rate hike by six months, the impact on the ten-year Treasury yield would be comparable to that of $760 billion of QE! Our analysis suggests that a six-month shift in the expected time of the first rate hike would have a significant impact on the yield curve.
Lottery Winners Do Not Avoid Bankruptcy
The rags to riches to rags story of a poor, unemployed fellow who wins the lottery, blows the cash, and ends up just as poor and unemployed as he began is a common trope. (Here is a classic in the genre). In a paper just published in the Review of Economics and Statistics (gated, free version here), Hankins, Hoekstra and Skiba argue that the rags to riches to rags story has a systematic component.
The authors link records of lottery winners to bankruptcy records. The use of the lottery is a great randomization device, although obviously it restricts the sample to people who play the lottery.
The central finding is this: people who win large amounts are just as likely to end up bankrupt as people who win small amounts. People who win a large amount, $50,000 to $150,000, have a lower bankruptcy rate immediately after winning but a higher bankruptcy rate a few years later so the 5-year bankruptcy rate for the big winners is no lower than for the small winners. Amazingly, by the time the big winners do go bankrupt their assets and debts are not significantly different from those of the small winners. The big winners who ended up bankrupt could have paid off all of their debts but chose not to.
N.B. the result is not that most lottery winners go bankrupt or that winning money doesn’t help people–the result, as Robin Hanson might say, is that bankruptcy isn’t about money.
Is there a productivity crisis in Canada?
From Stephen Gordon, how about this?:
…an increase in business sector MFP [multi-factor productivity] of just over 10% in the span of almost 50 years is still not particularly impressive. And business sector MFP has fallen over the past ten years.
Yet the real story is more complicated and Gordon in fact prefers to dispense with the MFP metric. Let’s look at a stunning graph:
You can see that Mining and Extraction TFP takes a long plunge, even though Canada today prospers through selling natural resources. So what’s up? One of Gordon’s arguments against TFP is his claim that this graph implies earlier mining technologies were better than current mining technologies (unlikely), but that is a misunderstanding of what TFP measures. Think of TFP as trying to pick “the stuff we get for free through innovation.” Falling TFP in mining reflects Canada’s move from “suck it up with a straw” oil to complex, high cost extraction tar sands projects and the like. They have moved down this curve a long, long way.
Yet Canada still prospers: someone is willing to pay for all the time and trouble they put into extraction, because the other natural resource options are costlier at the relevant margin. Another way to make the point is that this graph, and the embedded story of productivity, is very bad news for someone, just not Canada, at least not so far.
You will see plenty of talk about the problem cases in the world economy, for instance Greece or Portugal. But arguably it is the success stories — Canada and Australia — which are scarier and more indicative of the true long-run problem.
Sentences to ponder
… in America’s system of gridlock-based government priority is now on buck passing rather than achieving policy goals. Democrats are putting a higher priority on a desire to get Republicans to vote for tax increases than they are on a desire to have taxes be higher. Republicans, conversely, are trying to avoid voting for tax increases rather than trying to prevent tax increases from taking place.
That is from Matt. I wonder what underlying model of politics this is evidence for. Could it be that the real rewards from office holding come from one’s interest groups, later on? But why is the reward so closely tied to measures of loyalty rather than actual results? Are the external interest groups such poor monitors? If so, that would help explain why the observed Beckerian political bargains are so inefficient and so subject to polarized bickering.
I agree with this post of Matt’s too, 2008 was worse than we had thought. Now let’s apply some (finite) backward induction. How about 2007? Was that year worse than we thought? 2006 anyone? I think of 2008 and 2009 as when the crumminess of some of the preceding years was revealed as common knowledge. The real mistakes of the Commerce Dept. were about the previous years and that is only beginning to sink in.
Spending Cuts
A big hat tip on this post to Russ Roberts who used the 10 year time frame to compare in this excellent post.
Sentences to ponder
Here is Nancy Youssef, via Kevin Drum:
Rather than cutting $400 billion in defense spending through 2023, as President Barack Obama had proposed in April, the current debt proposal trims $350 billion through 2024, effectively giving the Pentagon $50 billion more than it had been expecting over the next decade.
With the wars in Iraq and Afghanistan winding down, experts said, the overall change in defense spending practices could be minimal: Instead of cuts, the Pentagon merely could face slower growth.
….”This is a good deal for defense when you probe under the numbers,” said Lawrence Korb, a defense expert at the Center for American Progress, a left-leaning research center. “It’s better than what the Defense Department was expecting.”
Norway facts of the day
1. 12.2% of their 4.9 million people are immigrants.
2. By nationality, the two largest groups in that 12.2% are Poles and then Swedes, followed by Pakistanis.
3. About 40% of those immigrants are from the West.
Here is the relevant background article.
Discretionary spending over the next ten years
Drawing on Chris Edwards, Will Wilkinson relays the picture:
Believe it or not, some people are flipping out over this outcome. Do read Will’s entire post. And for Tea Partiers out there: is this the best the nuclear option can get you? I’d say rethink your theory of public opinion.
For those who want it, a rescaled graph is here, it still goes up!
More from Josh Barro
This should be placed at the beginning of every blog post or column on the debt ceiling hike:
That points to a hit to annual GDP growth of roughly 0.04 percentage points from the FY 12 changes in this plan—an effect that will be impossible to pick up amidst the noise.
You can read through his reasoning here. Here is a “least common denominator” look at the deal.
The gdp revisions and labor market weirdness
The weirdness is still there. Menzie Chinn does the hard work and reports back:
Formal statistical tests indicate that the relationship between GDP growth and private employment growth has experienced breaks at each of the past two recessions, and strongly rejected stability (using 1-step-ahead recursive residual tests) in the last recession. This remains true regardless of whether one uses the pre-revision or post-revision data, although the rejection of stability is slightly less marked using the revised data.