Category: Data Source
The new Raj Chetty paper on changes in opportunity
Here is the paper, with co-authors Will Dobbie, Benjamin Goldman, Sonya R. Porter, and Crystal S. Yang. Here is the abstract:
We show that intergenerational mobility changed rapidly by race and class in recent decades and use these trends to study the causal mechanisms underlying changes in economic mobility. For white children in the U.S. born between 1978 and 1992, earnings increased for children from high-income families but decreased for children from low-income families, increasing earnings gaps by parental income (“class”) by 30%. Earnings increased for Black children at all parental income levels, reducing whiteBlack earnings gaps for children from low-income families by 30%. Class gaps grew and race gaps shrank similarly for non-monetary outcomes such as educational attainment, standardized test scores, and mortality rates. Using a quasi-experimental design, we show that the divergent trends in economic mobility were caused by differential changes in childhood environments, as proxied by parental employment rates, within local communities defined by race, class, and childhood county. Outcomes improve across birth cohorts for children who grow up in communities with increasing parental employment rates, with larger effects for children who move to such communities at younger ages. Children’s outcomes are most strongly related to the parental employment rates of peers they are more likely to interact with, such as those in their own birth cohort, suggesting that the relationship between children’s outcomes and parental employment rates is mediated by social interaction [emphasis added]. Our findings imply that community-level changes in one generation can propagate to the next generation and thereby generate rapid changes in economic mobility.
Here is NYT coverage, here is WSJ coverage.
Not the worst news…
We find that markups increased by about 30 percent on average over the sample period. The change is primarily attributable to decreases in marginal costs, as real prices only increased slightly from 2006 to 2019. Our estimates indicate that consumers have become less price sensitive over time.
That is from a new NBER working paper by
…the empirical evidence relating to concentration trends, markup trends, and the effects of mergers does not actually show a widespread decline in competition. Nor does it provide a basis for dramatic changes in antitrust policy. To the contrary, in many respects the evidence indicates that the observed changes in many industries are likely to reflect competition in action.
Rooftops, people…
Germany fact of the day
Here is the source.
The Financial Consequences of Legalized Sports Gambling
Following a 2018 ruling of the U.S. Supreme Court, 38 states have legalized sports gambling. We study how this policy has impacted consumer financial health using the state-by-state rollout of legal sports gambling and a large and comprehensive dataset on consumer financial outcomes. Our main finding is that overall, consumers’ financial health is modestly deteriorating as the average credit score in states that legalize sports gambling decreases by roughly 0.3%. The decline in credit score is associated with changes in indicators of excessive debt. We find a substantial increase in bankruptcy rates, debt collections, debt consolidation loans, and auto loan delinquencies. We also find that financial institutions respond to the reduced creditworthiness of consumers by restricting access to credit. These results are stronger for states that allow sports gambling online compared to states that restrict access to in-person betting and larger for young men in low-income counties. Together, these results indicate that the ease of access to sports gambling is harming consumer financial health by increasing their level of debt.
That is from a new paper by Brett Hollenbeck, Poet Larsen, and Davide Proserpio.
Who uses ChatGPT?
By Anders Humlum and Emilie Vestergaard:
We study the adoption of ChatGPT, the icon of Generative AI, using a large-scale survey experiment linked to comprehensive register data in Denmark. Surveying 100,000 workers from 11 exposed occupations, we document that ChatGPT is widespread, but substantial inequalities have emerged. Women are 20 percentage points less likely to have used the tool. Furthermore, despite its potential to lift workers with less expertise, users of ChatGPT earned more already before its arrival. Workers see a substantial productivity potential in ChatGPT but are often hindered by employer restrictions and the need for training. Informing workers about expert assessments of ChatGPT shifts workers’ beliefs but has limited impacts on actual adoption.
Here is the link to the full paper.
Does Income Affect Health? (an RCT)
This paper provides new evidence on the causal relationship between income and health by studying a randomized experiment in which 1,000 low-income adults in the United States received $1,000 per month for three years, with 2,000 control participants receiving $50 over that same period. The cash transfer resulted in large but short-lived improvements in stress and food security, greater use of hospital and emergency department care, and increased medical spending of about $20 per month in the treatment relative to the control group. Our results also suggest that the use of other office-based care—particularly dental care—may have increased as a result of the transfer. However, we find no effect of the transfer across several measures of physical health as captured by multiple well-validated survey measures and biomarkers derived from blood draws. We can rule out even very small improvements in physical health and the effect that would be implied by the cross-sectional correlation between income and health lies well outside our confidence intervals. We also find that the transfer did not improve mental health after the first year and by year 2 we can again reject very small improvements. We also find precise null effects on self-reported access to health care, physical activity, sleep, and several other measures related to preventive care and health behaviors. Our results imply that more targeted interventions may be more effective at reducing health inequality between high- and low-income individuals, at least for the population and time frame that we study.
That is from a new NBER working paper by
The employment effects of a guaranteed income
By Eva Vivalt, Elizabeth Rhodes, Alexander W. Bartik, David E. Broockman, Sarah Miller, Here is the link, but I am still sleeping. Here is the abstract:
We study the causal impacts of income on a rich array of employment outcomes, leveraging an experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per month unconditionally for three years, with a control group of 2,000 participants receiving $50/ month. We gather detailed survey data, administrative records, and data from a custom mobile phone app. The transfer caused total individual income to fall by about $1,500/year relative to the control group, excluding the transfers. The program resulted in a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours, with participants’ partners reducing their hours worked by a comparable amount. The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances. Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
This is the largest and most extensive RCT of its kind on this issue, and the results are not extremely positive.
Hollywood evidence on McCarthyism
There is a new NBER working paper on this topic by Hui Ren Tan and Tianyi Wang, here is the abstract:
We study a far-reaching episode of demagoguery in American history. From the late 1940s to 1950s, anti-communist hysteria led by Senator Joseph McCarthy and others gripped the nation. Hundreds of professionals in Hollywood were accused of having ties with the communist. We show that these accusations were not random, targeting those with dissenting views. Actors and screenwriters who were accused suffered a setback in their careers. Beyond the accused, we find that the anti-communist crusade also had a chilling effect on film content, as non-accused filmmakers avoided progressive topics. The decline in progressive films, in turn, made society more conservative.
Here is extensive (positive) commentary by Alice Evans:
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- Dissidents who had organised against the House Un-American Activities Committee (HUAC) were 27 to 32 percentage points more likely to be accused.
- Celebrities – actors with more experience and Academy Award nominations were more likely to be accused.
- Actors and writers involved in progressive films were more likely to be accused.
Quicker and easier to read than the paper. I also would like to see numbers on how many exactly were in fact communists.
Migrant exposure and anti-migrant sentiment
The subtitle of the paper is The Case of the Venezuelan Exodus, and the authors are Jeremy Lebow, Jonathan Moreno-Medina, Salma Mousa, and Horacio Coral. Here is part of the abstract:
We study the mass exodus of Venezuelans across Latin America, which coincided with an unprecedented worsening in migrant sentiment in the countries that received the most Venezuelans. However, we find no evidence that this decrease occurred in the regions within-country that received the most migrants. We do this using multiple migrant sentiment outcomes including survey measures and social media posts, multiple levels of geographic variation across seven Latin American countries, and an instrumental variable strategy. We find little evidence for heterogeneity along a range of characteristics related to labor market competition, public good scarcity, or crime. The results are consistent with anti-migrant sentiment being a national-level phenomenon, divorced from local experiences with migrants.
Keep in mind that domestic natives typically have significant (national-level) misinformed objections to the migrants, such as thinking they are far more numerous than in fact they are. But they don’t dislike the actual presence of the immigrants, quite the contrary.
Good news on Covid and your brain
Results: All six cognitive tests, measured before January 1, 2020, are significant predictors of infection status during the pandemic. The two subjective cognition measures show no significant association with infection. We replicate earlier cross-sectional findings of a negative association between COVID-19 infection and subsequent cognition. However, once accounting for baseline cognition, no significant associations are found for either the tests or the subjective measures. For three of the six cognitive tests the effects change signs.
Conclusions and relevance: We find no evidence for a negative association between COVID-19 infection and subsequent measures of cognitive functioning. The associations found in earlier studies may at least partly reflect reverse causation.
That is from a new research paper by Bas Weerman, et.al. Via the excellent Kevin Lewis.
Thinking about the Roman Empire
The full title of the piece is “Identification and measurement of intensive economic growth in a Roman imperial province,” by Scott G. Ortman et.al. Here is the abstract:
A key question in economic history is the degree to which preindustrial economies could generate sustained increases in per capita productivity. Previous studies suggest that, in many preindustrial contexts, growth was primarily a consequence of agglomeration. Here, we examine evidence for three different socioeconomic rates that are available from the archaeological record for Roman Britain. We find that all three measures show increasing returns to scale with settlement population, with a common elasticity that is consistent with the expectation from settlement scaling theory. We also identify a pattern of increase in baseline rates, similar to that observed in contemporary societies, suggesting that this economy did generate modest levels of per capita productivity growth over a four-century period. Last, we suggest that the observed growth is attributable to changes in transportation costs and to institutions and technologies related to socioeconomic interchange. These findings reinforce the view that differences between ancient and contemporary economies are more a matter of degree than kind.
Thereby pondered! Via Alexander Le Roy.
Indian work from home data
The Covid-19 pandemic forced firms globally to shift workforces to working from home [WFH]. Firms are now struggling to implement a return to working from the office [WFO], as employees enjoy the significant benefits of WFH for their work-life balance. Therefore many firms are adopting a hybrid model in which employees work partly from the office and partly from home. We use unique and detailed data from an Indian IT services firm which contains a precise measure of innovation activity of over 48,000 employees in these three work environments. Our key outcomes are the quantity and quality of ideas submitted by employees. Based on an event study design, the quantity of ideas did not change during the WFH period as compared to WFO, but the quality of ideas suffered. During the later hybrid period, the quantity of submitted ideas fell. In the hybrid phase innovation suffered particularly in teams which were not well coordinated in terms of when they worked at the office or from home. Our findings suggest that remote and hybrid work modes may inhibit collaboration and innovation.
(Link and citation of paper corrected.) Here is the full piece from Michael Gibbs, Friederike Mengel, and Christoph Siemroth.
Poland’s PPP income is likely to exceed that of Japan by 2026.
Here is the link.
The class gap in academic career progression
There is a new and excellent paper by Anna Stansbury and Kyra Rodriguez on this topic:
Unlike gender or race, class is rarely a focus of research or DEI efforts in elite US occupations. Should it be? In this paper, we document a large class gap in career progression in one labor market: US tenure-track academia. Using parental education to proxy for socioeconomic background, we compare career outcomes of people who got their PhDs in the same institution and field (excluding those with PhD parents). First-generation college graduates are 13% less likely to end up tenured at an R1, and are on average tenured at institutions ranked 9% lower, than their PhD classmates with a parent with a (non-PhD) graduate degree. We explore three sets of mechanisms: (1) research productivity, (2) networks, and (3) preferences. Research productivity can explain less than a third of the class gap, and preferences explain almost none. Our analyses of coauthor characteristics suggest networks likely play a role. Finally, examining PhDs who work in industry we find a class gap in pay and in managerial responsibilities which widens over the career. This means a class gap in career progression exists in other US occupations beyond academia.
Here is a first-rate tweet storm by Stansbury on the paper. Via Aidan Finley.
Rent Control
Kholodilin offers a comprehensive review of the literature on rent control, some 206 papers, published and unpublished from 1967-2013. The results are summarized in the figure below where (-) indicates papers finding a negative effect, (0) no effect and (+) a positive effect. The top left figure, for example, shows, not surprisingly, that almost all papers find that rent controls does lower rents in the rent-controlled units.
Most papers that study the issue, however, find that rents increase in the uncontrolled units (middle row, right column.) In other words, “the imposition of rent control amplifies the shortage of housing. Therefore, the waiting queues become longer and would-be tenants must spend more time looking for a dwelling.”
Similarly, “nearly all studies indicate a negative effect of rent control on mobility” (top column, middle row).
Importantly, “the published studies are almost unanimous with respect to the impact of rent control on the quality of housing….[namely] that rent control leads to a deterioration in the quality of those dwellings subject to regulations.” (middle row, middle column).
