Category: Data Source
Technological Disruption in the US Labor Market
Deming, Ong and Summers have a good overview of long-run and very recent changes in the US labor market. Using a measure of occupational titles the authors find:
The years spanning 1990-2017 were the most stable period in the history of the US labor market, going back nearly 150 years.
It’s a bit too early to distinguish an AI revolution from a COVID shock but the last four years look to be more disruptive than any since the 1970s and over a slightly longer period there are trends including a decline in retail, as consumers shift to online shopping and delivery, and a decline in office work, the latter especially suggesting an AI effect:
There were 850,000 fewer retail sales workers in the US in 2023 compared to 2013 even though the US economy added more than 19 million jobs over this period.
There are nearly five hundred thousand fewer secretaries and administrative assistants in the US labor force now than there were a decade ago. At the same time, management and business occupations have grown very rapidly. There were four million more managers and 3.5 million more business and financial operations jobs in the US in 2023 than there were in 2013.
Keep in mind that these changes are occurring as employment and wages overall are rising.
The Effects of Gender Integration on Men
Evidence from the U.S. military:
Do men negatively respond when women first enter an occupation? We answer this question by studying the end of one of the final explicit occupational barriers to women in the U.S.: in 2016, the U.S. military opened all positions to women, including historically male-only combat occupations. We exploit the staggered integration of women into combat units to estimate the causal effects of the introduction of female colleagues on men’s job performance, behavior, and perceptions of workplace quality, using monthly administrative personnel records and rich survey responses. We find that integrating women into previously all-male units does not negatively affect men’s performance or behavioral outcomes, including retention, promotions, demotions, separations for misconduct, criminal charges, and medical conditions. Most of our results are precise enough to rule out small, detrimental effects. However, there is a wedge between men’s perceptions and performance. The integration of women causes a negative shift in male soldiers’ perceptions of workplace quality, with the effects driven by units integrated with a woman in a position of authority. We discuss how these findings shed light on the roots of occupational segregation by gender.
That is all from
Gender Composition and Group Behavior
Evidence from city councils:
How does gender composition influence individual and group behavior? To study this question empirically, we assembled a new, national sample of United States city council elections and digitized information from the minutes of over 40,000 city-council meetings. We find that replacing a male councilor with a female councilor results in a 25p.p. increase in the share of motions proposed by women. This is despite causing only a 20p.p. increase in the council female share. The discrepancy is driven, in part, by behavioral changes similar to those documented in laboratory-based studies of gender composition. When a lone woman is joined by a female colleague, she participates more actively by proposing more motions. The apparent changes in behavior do not translate into clear differences in spending. The null finding on spending is not driven by strategic voting; however, preference alignment on local policy issues between men and women appears to play an important role. Taken together, our results both highlight the importance of nominal representation for cultivating substantive participation by women in high-stakes decision making bodies; and also provide evidence in support of the external validity of a large body of laboratory-based work on the consequences of group gender composition.
That is from a new NBER working paper by
Using AI to analyze changes in pedestrian traffic
That is the topic of my latest Bloomberg column, here is one bit:
Fortunately, there is new research. We have entered the age where innovative methods of measurement, such as computer vision and deep learning, can reveal how American life has changed.
Researchers at the National Bureau of Economic Research compiled footage of four urban public spaces, two in New York and one each in Philadelphia and Boston, from 1979-1980 and again in 2008-2010. These snapshots of American life, roughly 30 years apart, reveal how changes in work and culture might have shaped the way people move and interact on the street.
The videos capture people circulating in two busy Manhattan locations, in Bryant Park in midtown and outside the Metropolitan Museum of Art on the Upper East Side; around Boston’s Downtown Crossing shopping district; and on Chestnut Street in downtown Philadelphia. One piece of good news is that at least when it comes to our street behavior, we don’t seem to have become more solitary. From 1980 to 2010 there was hardly any change in the share of pedestrians walking alone, rising from 67% to 68%.
A bigger change is that average walking speed rose by 15%. So the pace of American life has accelerated, at least in public spaces in the Northeast. Most economists would predict such a result, since the growth in wages has increased the opportunity cost of just walking around. Better to have a quick stroll and get back to your work desk.
The biggest change in behavior was that lingering fell dramatically. The amount of time spent just hanging out dropped by about half across the measured locations. Note that this was seen in places where crime rates have fallen, so this trend was unlikely to have resulted from fear of being mugged. Instead, Americans just don’t use public spaces as they used to. These places now tend to be for moving through, to get somewhere, rather than for enjoying life or hoping to meet other people. There was especially a shift at Boston’s Downtown Crossing. In 1980, 54% of the people there were lingering, whereas by 2010 that had fallen to 14%.
Consistent with this observation, the number of public encounters also fell. You might be no less likely to set off with another person in tow, but you won’t meet up with others as often while you are underway. The notion of downtown as a “public square,” rife with spontaneous or planned encounters, is not what it used to be.
I prefer the new arrangements, but of course not everybody does. The researchers are
Some Simple Economics of the Google Antitrust Case
The case is straightforward: Google pays firms like Apple billions of dollars to make its search engine the default. (N.B. I would rephrase this as Apple charges Google billions of dollars to make its search engine the default–a phrasing which matters if you want to understand what is really going on. But set that aside for now.) Consumers, however, can easily switch to other search engines by downloading a different browser or changing their default settings. Why don’t they? Because the minor transaction costs are not worth the effort. Moreover, if Google provides the best search experience, most users have no incentive to switch.
Consequently, any potential harm to consumers is limited to minor switching costs, and any remedies should be proportionate. Proposals such as forcing Google to divest Chrome or Android are vastly disproportionate to the alleged harm and risk being counterproductive. Google’s Android has significantly increased competition in the smartphone market, and ChromeOS has done the same for laptops. Google has invested billions in increasing competition in its complements. Google was able to make these investments because they paid off in revenue to Google Search and Google Ads. Kill the profit center and kill the incentive to invest in competition. Unintended consequences.
I argued above that consumer harm is limited to minor switching costs. The plaintiffs’ counter-argue that Google’s purchase of default-status “forecloses” competitors from achieving the scale necessary to compete effectively. This argument relies on network effects – more searches improve search quality through better data. However, this creates a paradox: on the theory of the plaintiffs, two or three firms each operating at smaller scale is worse than one operating at large scale. For the plaintiffs’ argument to hold, it must be shown that we are at the exact sweet spot where the benefits of increased competition in lowering the price of advertising outweighs the efficiency losses to consumer search quality from reduced scale. Yet, there is no evidence in the case—nor even an attempt—to demonstrate that we are at such a sweet spot.
Or perhaps the argument is that with competition we would get even better search but that argument can’t be right because the costs of switching, as noted above, are bounded by some minor transaction costs. Thus, if a competitor could offer better search, it would easily gain scale (e.g. AI search, see below).
Traditional foreclosure analysis requires showing both substantial market closure and consumer harm. Given the ease of switching and the complex relationship between scale and search quality, proving such harm becomes challenging and my read is that the plaintiffs didn’t prove harm.
In my view, the best analogy to the Google antitrust case is Coke and Pepsi battling for shelf space in the supermarket. Returning to my earlier parenthetical point, Apple is like the supermarket charging for prime shelf placement. Is this a significant concern? Not really. Eye-level placement matters to Coke and Pepsi but by construction they are competing for consumers who don’t much care which sugary, carbonated beverage they consume. For consumers who do care, the inconvenience is limited to reaching to a different shelf.
To add insult to injury, the antitrust case is happening when Google is losing advertising share and is under pressure from a new search technology, Artificial Intelligence. AI search from OpenAI, Anthropic, Meta Llama, and xAI is very well funded and making rapid progress. Somehow AI search did manage to achieve scale! As usual, the market appears more effective than the antitrust authorities at creating competition.
Addendum: Admittedly this is outside the remit of the judge, but the biggest anti-competitive activities in tech are probably government policies that slow the construction of new power generation, new power lines, new data centers, and deals between power generators and data centers. I’d prefer the government take on its own anticompetitive effects before going after extremely succesful tech companies that have clearly made consumers much better off.
Literacy Rates and Simpson’s Paradox
Max T. at Maximum Progress shows that between 1992 and 2003 US literacy rates fell dramatically within every single educational category but the aggregate literacy rate didn’t budge. A great example of Simpson’s Paradox! The easiest way to see how this is possible is just to imagine that no one’s literacy level changes but everyone moves up an educational category. The result is zero increase in literacy but falling literacy rates in each category.
Two interesting things follow. First, this is very suggestive of credentialing and the signaling theory of education. Second, and more originally, Max suggests that total factor productivity is likely to have been mismeasured. Total factor productivity tells us how much more output can we get from the same inputs. If inputs increase, we expect output to increase so to measure TFP we must subtract any increase in output due to greater inputs. It’s common practice, however, to use educational attainment as a (partial) measure of skill or labor quality. If educational attainment is just rising credentialism, however, then this overestimates the increase in output due to labor skill and underestimates the gain to TFP.
This does not imply that we are richer than we actually are–output is what it is–but it does imply that if we want to know why we haven’t grown richer as quickly as we did in the past we should direct less attention to ideas and TFP and more attention to the failure to truly increase human capital.
Unauthorized Immigration and Local Government Finances
This paper examines how unauthorized immigration affects the fiscal health of local governments in the United States. Using detailed data on unauthorized immigrants’ countries of origin and arrival dates from the Syracuse TRAC database, we isolate immigration flows driven by social, economic, and political conditions in source countries. We predict local immigration patterns using a shift-share instrument based on pre-existing foreign-born population distributions. We find that the economic effects of unauthorized immigration depend crucially on local labor market conditions. In areas with structurally tight labor markets—characterized by low unemployment and low labor force participation—unauthorized immigration correlates with lower municipal bond yields. However, areas with typical labor market conditions experience higher yields. Areas with “sanctuary” status also experience higher yields when exposed to unauthorized immigration. These yield effects reflect underlying economic mechanisms: unauthorized immigration predicts loosening of labor markets in areas where they were previously tight, whereas in sanctuary areas, unemployment rates increase by more than twice as much. We find unauthorized immigration explains higher expenditures on local public amenities, including welfare assistance, construction, education, and law enforcement, but these expenditures are not offset by higher tax revenues. Overall, our results provide novel insights into the local economic effects of unauthorized immigration.
That is from a new paper by Jess Cornaggia, Kimberly Cornaggia, and Ryan D. Israelsen. Via the excellent Kevin Lewis.
Germany chart of the day
Here is the link.
Who Americans spend their time with, by age
Via the excellent Bryan Caplan.
Birth Dearth and Local Population Decline
Local population decline has spread rapidly since 1970, with half of counties losing population between 2010 and 2020. The workhorse economic models point to net out-migration, likely driven by changing local economies and amenities, as the cause of this trend. However, we show that the share of counties with high net out-migration has not increased. Instead, falling fertility has caused migration rates that used to generate growth to instead result in decline. When we simulate county populations from 1970 to the present holding fertility at its initial level, only 10 percent of counties decline during the 2010s.
That is from a new paper by Brian Asquith and Evan Mast. Via the excellent Kevin Lewis.
Alcohol estimates
The number of deaths caused by alcohol-related diseases more than doubled among Americans between 1999 and 2020, according to new research. Alcohol was involved in nearly 50,000 deaths among adults ages 25 to 85 in 2020, up from just under 20,000 in 1999.
The increases were in all age groups. The biggest spike was observed among adults ages 25 to 34, whose fatality rate increased nearly fourfold between 1999 and 2020.
Women are still far less likely than men to die of an illness caused by alcohol, but they also experienced a steep surge, with rates rising 2.5-fold over 20 years.
The new study, published in The American Journal of Medicine, drew on data from the Centers for Disease Control and Prevention.
Why more South Asian than East Asian CEOs?
Analyses revealed that East Asians faced less prejudice than South Asians and were equally motivated by work and leadership as South Asians. However, East Asians were lower in assertiveness, which consistently mediated the leadership attainment gap between East Asians and South Asians. These results suggest that East Asians hit the bamboo ceiling because their low assertiveness is incongruent with American norms concerning how leaders should communicate.
That is from a new piece by Jackson G. Lu, Richard E. Nibett, and Michael W. Morris, via the excellent Kevin Lewis.
Parents should believe in upward mobility
There is a new paper on this topic, with multiple authors by led by Rebecca Ryan. Here is the abstract:
Research in economics and psychology shows that individuals are sensitive to cues about economic conditions in ways that affect attitudes, beliefs, and behavior. We provide causal evidence that parents’ beliefs about economic mobility prospects shape parental investments of time and money in children. To do so we conduct an on-line information experiment with ~ 1,000 socioeconomically diverse parents of children ages 5-15. The information treatment aimed to manipulate parents’ beliefs in the possibility for future upward (downward) economic mobility in US society. The experimental results yield three conclusions. First, parents are highly sensitive to signals about future economic mobility prospects. Second, parents who are induced to believe in the likely possibility of future upward mobility increase their beliefs about the return on their own investments of time and money. Using a novel measure of time investment we developed, these parents also increase their time investments in the service of boosting children’s skill. Finally, they report being more willing to pay for resources that would boost their child’s skill development. Third, these patterns are true for economically advantaged and disadvantaged families alike. We discuss the implication of these results in terms of reports showing that Americans are losing faith in “The American Dream.”
No, researchers should not lie, but perhaps this gives some additional perspective on who exactly is harming the world. There can be a cost to publishing neurotic, untrue ideas.
Via the excellent Kevin Lewis.
*Is Inequality the Problem?*
Lane Kenworthy has a book coming out next year, I have read it, and it is superb (rooftops) and also very important. Here is a brief excerpt:
Rich democratic nations with higher levels of income inequality or larger increases in income inequality haven’t tended to have slower economic growth, lower or slower-growing household income, or worse household balance sheets…
The notion that income inequality is harmful for health has recieved substantial attention from researchers, and some now take it for granted that inequality reduces longevity. But the country evidence offers very little support for this conclusion.
I will let you know when a pre-order is possible. In the meantime, it shouldn’t matter, but I can also report that Kenworthy is very much a left-leaning thinker, as you can adduce from his policy recommendations toward the end of the book.
How badly do humans misjudge AIs?
We study how humans form expectations about the performance of artificial intelligence (AI) and consequences for AI adoption. Our main hypothesis is that people project human-relevant problem features onto AI. People then over-infer from AI failures on human-easy tasks, and from AI successes on human-difficult tasks. Lab experiments provide strong evidence for projection of human difficulty onto AI, predictably distorting subjects’ expectations. Resulting adoption can be sub-optimal, as failing human-easy tasks need not imply poor overall performance in the case of AI. A field experiment with an AI giving parenting advice shows evidence for projection of human textual similarity. Users strongly infer from answers that are equally uninformative but less humanly-similar to expected answers, significantly reducing trust and engagement. Results suggest AI “anthropomorphism” can backfire by increasing projection and de-aligning human expectations and AI performance.
That is from a new paper by Raphael Raux, job market candidate from Harvard. The piece is co-authored with Bnaya Dreyfuss.