Category: Data Source

New results on the China shock, furthermore the China shock is largely over

Using Census micro data we find that the impact of Chinese import competition on US manufacturing had a striking regional variation. In high-human capital areas (for example, much of the West Coast or New England) most manufacturing job losses came from establishments industry switching to services. The establishment remained open but changed to research, design, management or wholesale. In the low human-capital areas (for example, much of the South and mid-West) manufacturing job-losses came from plant closure without much offsetting gain in service employment. Offshoring appears to drive these manufacturing job losses – the Chinese trade impact arose primarily in large importing firms that were simultaneously expanding service sector employment. Hence, our data suggest Chinese trade redistributed jobs from manufacturing in lower income areas to services in higher income areas. Finally, the impact of Chinese imports appear to have disappeared after 2007 – we find strong employment impacts from 2000 to 2007, but nothing since from 2008 to 2015.

That is from a new paper by Nicholas Bloom, Kyle Handley, André Kurmann, and Philip Luck.  Via Bryan Caplan.

Early-career setback and future career impact

Setbacks are an integral part of a scientific career, yet little is known about whether an early-career setback may augment or hamper an individual’s future career impact. Here we examine junior scientists applying for U.S. National Institutes of Health (NIH) R01 grants. By focusing on grant proposals that fell just below and just above the funding threshold, we compare “near-miss” with “near-win” individuals to examine longer-term career outcomes. Our analyses reveal that an early-career near miss has powerful, opposing effects. On one hand, it significantly increases attrition, with one near miss predicting more than a 10% chance of disappearing permanently from the NIH system. Yet, despite an early setback, individuals with near misses systematically outperformed those with near wins in the longer run, as their publications in the next ten years garnered substantially higher impact. We further find that this performance advantage seems to go beyond a screening mechanism, whereby a more selected fraction of near-miss applicants remained than the near winners, suggesting that early-career setback appears to cause a performance improvement among those who persevere. Overall, the findings are consistent with the concept that “what doesn’t kill me makes me stronger.” Whereas science is often viewed as a setting where early success begets future success, our findings unveil an intimate yet previously unknown relationship where early-career setback can become a marker for future achievement, which may have broad implications for identifying, training and nurturing junior scientists whose career will have lasting impact.

That is the abstract of a new paper by Yang Wang, Benjamin F. Jones, and Dashun Wang.

What Explains Labor’s Declining Share of Revenue in Major League Baseball?

Somehow I had missed this earlier paper by John Charles Bradbury:

Since the early-2000s, the share of revenue going to Major League Baseball players has been diminishing similar to the decline of labor’s share of revenue observed in the US economy. This study examines potential explanations for the decline in baseball, which may result from related factors and provide information relevant to explaining this macroeconomic trend. The results indicate that the value-added from non-player inputs, collective bargaining agreement terms, and related changes in the returns to winning contributed to the decline of players’ share of income. Competition from substitute foreign labor and physical capital are not associated with the decline in labor’s share of income in baseball.

There is also this sentence:

The decline in labor’s revenue share in MLB is consistent with changes in revenue share in the hospitality and leisure industry that experienced a decrease in labor’s share of income from 65.7 percent to 62.1 percent between 1987 and 2011 (Elsby, Hobijn, and Şahin 2013).

Another hypothesis I have heard is that baseball players are not nearly as good at, or as well-suited for, the use of social media, as compared say to the more visible basketball players.  Another (quite speculative) claim is that sabermetrics has commoditized a lot of players and in turn lowered their bargaining power.

Sentences to ponder

…modest genetic selection/concentration was evident for teen pregnancy and poor educational outcomes, suggesting that neighbourhood effects for these outcomes should be interpreted with care.

Note however:

Findings argue against genetic selection/concentration as an explanation for neighbourhood gradients in obesity and mental health problems.

Here is the full piece, via K.

Genes, income, and happiness

Significant differences between genetic correlations indicated that, the genetic variants associated with income are related to better mental health than those linked to educational attainment (another commonly-used marker of SEP). Finally, we were able to predict 2.5% of income differences using genetic data alone in an independent sample. These results are important for understanding the observed socioeconomic inequalities in Great Britain today.

That is from a new paper by W. David Hill, et.al.  And from Abdel Abdellouai’s summary:

Educational attainment shows a larger genetic overlap with subjective wellbeing than IQ does (rgs = .11 & .03, respectively), while income shows a larger genetic overlap with subjective wellbeing than both education or IQ (rg = .32).

All via Richard Harper.

Loser companies

As economic profits grow larger, so do economic losses at the other end of the distribution. The bottom 10 percent of companies destroy as much value as the top 10 percent create, and today’s bottom-decile companies have 1.5 times more economic loss, on average, than their counterparts of 20 years ago (Exhibit 1). That means for every company that creates economic value, there is another company that destroys economic value. Yet these value-destroying companies continue to survive, holding on to their resources for increasingly longer durations and continuing to attract capital. A growing number are turning into “zombie” companies, unable to generate enough cash flow even to sustain interest payments on their debts. The impact of these economic losses goes beyond these companies’ investors, managers, and workers: it drives down the returns for healthy companies that compete for the same resources or profits.

That is from a new McKinsey study, via Marty Manley.

The evolution of political views

This paper examines the effect of party affiliation on an individual’s political views. To do this, we exploit the party realignment that occurred in the U.S. due to abortion becoming a more prominent and highly partisan issue over time. We show that abortion was not a highly partisan issue in 1982, but a person’s abortion views in 1982 led many to switch parties over time as the two main parties diverged in their stances on this issue. We find that voting for a given political party in 1996, due to the individual’s initial views on abortion in 1982, has a substantial effect on a person’s political, social, and economic attitudes in 1997. These findings are stronger for highly partisan political issues, and are robust to controlling for a host of personal views and characteristics in 1982 and 1997. As individuals realigned their party affiliation in accordance with their initial abortion views, their other political views followed suit.

That is a new paper by Eric D. Gould, and Estaban F. Klor, via the excellent Kevin Lewis.

p.s. don’t call it “tribalism,” that is something else.

A lot of the fear of smart phones and social media may be based on faulty data

New research shows that the fear of smart phones and social media was built on a castle made of sand. Turns out almost all of previous research never bothered to validate their assessments of smart phone use – and that appears to have been a HUGE mistake.

That is from Patrick Markey at Villanova, here is the whole thread.  Here Dr. Andrea Howard has some comments about screen time and suicide correlations.

Determinants of college majors

Students who happen to be assigned classes in one of four required subjects during the semester when they’re supposed to pick a major are twice as likely to major in the assigned subject, according to a new working paper from Pope, and Richard Patterson and Aaron Feudo of the U.S. Military Academy.

This held true regardless of how well a student did or how much they liked the course, according to the economists’ analysis of U.S. Military Academy class data from 2001 to 2015. Their database included grades, class times and students’ opinions of the course. It allowed them to control for factors such as students’ hometowns and racial backgrounds.

“Small and seemingly unimportant things can really have a large impact on people’s life decisions,” Pope said. Often students cite a specific class or teacher as justification for this life-altering choice.

In a related paper, the economists, along with Carnegie Mellon’s Kareem Haggag, showed students are about 10 percent less likely to major in a subject if they took a class at 7:30 a.m. Likewise, as students grow more fatigued during the day they grow about 10 percent less likely to major in the subject covered by each successive class…

Given how easily a first choice of major can be swayed by accidents of timing and environment, it’s perhaps not surprising that 37 percent of students eventually switch, according to a new paper from University of Memphis economists Carmen Astorne-Figari and Jamin D. Speer that will be published in the journal Economics of Education Review…

Students with lower GPAs are more likely to leave their major. But so are women of all ability levels. In contrast, men are more likely to drop out instead of sticking around and trying a different subject, according to a study published last year by Astorne-Figari and Speer.

Both men and women are most likely to abandon majors in the sciences. In addition, education and philosophy appear in the top five majors men leave most frequently, while women are more likely to leave computer science…

Students tend to switch to less competitive majors.

And:

On net, business, social sciences and economics tend to gain the most students from major switching, while biology, computer science and medicine (medical and health services) tend to lose the most.

Here is the full WaPo piece by Andrew Van Dam.

Immigration Status, Immigrant Family Ties, and Support for the Democratic Party

That is a newly published piece by George Hawley, Social Science Quarterly, not yet available on-line as far as I can find:

I test the hypothesis that immigration status itself is a predictor of Democratic Party affiliation and vote choice, even controlling for other attributes. I further test whether having immigrant parents and grandparents has a similar effect. Method.To examine these questions, I created single- and multilevel models of party affiliation and vote choice using the 2016 Cooperative Congressional Election Study. Results. Even after controlling for a myriad of individual and contextual attributes, immigration status was a statistically significant and substantively important predictor of Democratic affiliation. This was also true of the children and grandchildren of immigrants, but this effect weakened over multiple generations. Conclusion. Immigration status itself appears to be an important determinant of voting patterns, which is highly consequential, given the large and growing foreign-born population in the United States.

Perhaps this explains some small part of American politics in recent times.

For the pointer I thank D.

Perceptions of crony capitalism

This paper discusses a national survey of business leaders that sought to deter-mine how government favoritism toward particular firms correlates with attitudes about government, the market, and selectively favorable economic policy. Findings indicate that those individuals who believe they work for favored firms are more likely to approve of free markets in the abstract but also more likely to say the US market is currently too free. These individuals are more skeptical of competition and more inclined to approve of government intervention in markets. They also are more likely to approve of government favoritism and to believe that favoritism is compatible with a free market. Those who have direct experience with economic favoritism or are more attuned to such favoritism are more likely to have distorted perceptions of free- market capitalism and are more comfortable with further favoritism.

That is the abstract of a new Mercatus working paper, by Matthew D. Mitchell, with Scott Eastman and Tamara Winter.

Temperature and judicial decisions

The title is “Temperature and Decisions: Evidence from 207,000 Court Cases,” the authors are Anthony Heyes and Soodeh Saberian, and here is the abstract:

We analyze the impact of outdoor temperature on high-stakes decisions (immigration adjudications) made by professional decision-makers (US immigration judges). In our preferred specification, which includes spatial, temporal, and judge fixed effects, and controls for various potential confounders, a 10°F degree increase in case-day temperature reduces decisions favorable to the applicant by 6.55 percent. This is despite judgements being made indoors, “protected” by climate control. Results are consistent with established links from temperature to mood and risk appetite and have important implications for evaluating the influence of climate on “cognitive output.”

Here is the (gated) link to American Economic Journal: Applied Economics.  Here are ungated versions.