Category: Data Source

The great retrogression average is over

White, non-college-educated Americans born in the 1960s face shorter life expectancies, higher medical expenses, and lower wages per unit of human capital compared with those born in the 1940s, and men’s wages declined more than women’s. After documenting these changes, we use a life-cycle model of couples and singles to evaluate their effects. The drop in wages depressed the labor supply of men and increased that of women, especially in married couples. Their shorter life expectancy reduced their retirement savings but the increase in out-of-pocket medical expenses increased them by more. Welfare losses, measured a one-time asset compensation are 12.5%, 8%, and 7.2% of the present discounted value of earnings for single men, couples, and single women, respectively. Lower wages explain 47-58% of these losses, shorter life expectancies 25-34%, and higher medical expenses account for the rest.

That is from a new NBER working paper by Margherita Borella, Mariacristina De Nardi, and Fang Yang.

Women in the economics profession

Nearly 100 female economists say a peer or a colleague has sexually assaulted them. Nearly 200 say they were the victim of an attempted assault. And hundreds say they were stalked or touched inappropriately, according to a far-reaching survey of the field.

The results, compiled by the American Economic Association, also reveal deep evidence of gender and racial discrimination within the field. Half of the women who responded to the survey said they had been treated unfairly because of their sex, compared with 3 percent of men. Nearly half of women said they had avoided speaking at a conference or a seminar to guard against possible harassment or “disrespectful treatment.” Seven in 10 women said they felt their colleagues’ work was taken more seriously than their own.

Here is more from Ben Casselman and Jim Tankersley at NYT.

The rise of the temporary scientist

Here is a new and important piece on the economics of science, from Staša MilojevićFilippo Radicchi, and John P. Walsh:

Contemporary science has been characterized by an exponential growth in publications and a rise of team science. At the same time, there has been an increase in the number of awarded PhD degrees, which has not been accompanied by a similar expansion in the number of academic positions. In such a competitive environment, an important measure of academic success is the ability to maintain a long active career in science. In this paper, we study workforce trends in three scientific disciplines over half a century. We find dramatic shortening of careers of scientists across all three disciplines. The time over which half of the cohort has left the field has shortened from 35 y in the 1960s to only 5 y in the 2010s. In addition, we find a rapid rise (from 25 to 60% since the 1960s) of a group of scientists who spend their entire career only as supporting authors without having led a publication. Altogether, the fraction of entering researchers who achieve full careers has diminished, while the class of temporary scientists has escalated. We provide an interpretation of our empirical results in terms of a survival model from which we infer potential factors of success in scientific career survivability. Cohort attrition can be successfully modeled by a relatively simple hazard probability function. Although we find statistically significant trends between survivability and an author’s early productivity, neither productivity nor the citation impact of early work or the level of initial collaboration can serve as a reliable predictor of ultimate survivability.

As Raghuveer Parthasarathy argues in his excellent blog post: “…small groups may be innovative, but they are the hardest to sustain given the randomness of scientific funding.”

For the pointer I thank Raghuveer Parthasarathy.

The competence downshift by white liberals

Most Whites, particularly sociopolitical liberals, now endorse racial equality. Archival and experimental research reveals a subtle but persistent ironic consequence: White liberals self-present less competence to minorities than to other Whites—that is, they patronize minorities stereotyped as lower status and less competent. In an initial archival demonstration of the competence downshift, Study 1 examined the content of White Republican and Democratic presidential candidates’ campaign speeches. Although Republican candidates did not significantly shift language based on audience racial composition, Democratic candidates used less competence-related language to minority audiences than to White audiences. Across 5 experiments (total N = 2,157), White participants responded to a Black or White hypothetical (Studies 2, 3, 4, S1) or ostensibly real (Study 5) interaction partner. Three indicators of self-presentation converged: competence-signaling of vocabulary selected for an assignment, competence-related traits selected for an introduction, and competence-related content of brief, open-ended introductions. Conservatism indicators included self-reported political affiliation (liberal-conservative), Right-Wing Authoritarianism (values-based conservatism), and Social Dominance Orientation (hierarchy-based conservatism). Internal meta-analyses revealed that liberals—but not conservatives—presented less competence to Black interaction partners than to White ones. The simple effect was small but significant across studies, and most reliable for the self-reported measure of conservatism. This possibly unintentional but ultimately patronizing competence-downshift suggests that well-intentioned liberal Whites may draw on low-status/competence stereotypes to affiliate with minorities.

Here is the paper by Dupree, C. H., & Fiske, S. T., yes there is a replication crisis in social psychology, nonetheless I thought this was worth passing along.

For the pointer I thank a loyal MR reader.

Do female board members matter?

Maybe less than you might think, at least once you adjust for geographic distance:

Recent literature has shown that gender diversity in the boardroom seems to influence key monitoring decisions of boards. In this paper, we examine whether the observed relation between gender diversity and board decisions is due to a confounding factor, namely, directors’ geographic distance from headquarters. Using data on residential addresses for over 4,000 directors of S&P 1500 firms, we document that female directors cluster in large metropolitan areas and tend to live much farther away from headquarters compared to their male counterparts. We also reexamine prior findings in the literature on how boardroom gender diversity affects key board decisions. We use data on direct airline flights between U.S. locations to carry out an instrumental variables approach that exploits plausibly exogenous variation in both gender diversity and geographic distance. The results show that the effects of boardroom gender diversity on CEO compensation and CEO dismissal decisions found in the prior literature largely disappear when we account for geographic distance. Overall, our results support the view that gender-diverse boards are “tougher monitors” not because of gender differences per se, but rather because they are more geographically remote from headquarters and hence more reliant on hard information such as stock prices. The findings thus suggest that board gender policies, such as quotas, could have unintended consequences for some firms.

Here is the paper by Zinat S. Alam, Mark A. Chen, Conrad S. Ciccotello, and Harley E. Ryan.  Via the excellent Kevin Lewis.

Does a Carbon Tax Reduce CO 2 Emissions? Evidence From British Columbia

From Felix Pretis:

Using difference-in-differences and a novel break-detection approach I show that the introduction of a carbon tax has not ‘yet’ led to a significant reduction in aggregate CO2 emissions in British Columbia, Canada. Despite the lack of detectable aggregate effect, there are heterogeneous emission reductions across sectors: the tax led to a reduction in emissions from transportation incl. personal vehicles (-5%), buildings (-5%), waste processing (-3%), and light manufacturing, construction and forestry (-11%). Introducing a new method to assess policy based on breaks in difference-in-differences fixed effect panel models, I demonstrate that neither the carbon tax, nor the carbon price and emissions trading schemes introduced in other Canadian provinces are detected as significant interventions in aggregate emissions. The absence of significant aggregate reductions in emissions is consistent with existing evidence that current carbon taxes (and prices) are too low to be effective.

Since current carbon taxes are already not so popular, I don’t take this as especially good news.  For the pointer I thank Warren Smith.

Opioids and the Labor Market

Do not believe those who tell you the only labor market problems have been demand side!:

This paper studies the relationship between local opioid prescription rates and labor market outcomes. We improve the joint measurement of labor market outcomes and prescription rates in the rural areas where nearly 30 percent of the US population lives. We find that increasing the local prescription rate by 10 percent decreases the prime-age employment rate by 0.50 percentage points for men and 0.17 percentage points for women. This effect is larger for white men with less than a BA (0.70 percentage points) and largest for minority men with less than a BA (1.01 percentage points). Geography is an obstacle to giving a causal interpretation to these results, especially since they were estimated in the midst of a large recession and recovery that generated considerable cross-sectional variation in local economic performance. We show that our results are not sensitive to most approaches to controlling for places experiencing either contemporaneous labor market shocks or persistently weak labor market conditions. We also present evidence on reverse causality, finding that a short-term unemployment shock did not increase the share of people abusing prescription opioids. Our estimates imply that prescription opioids can account for 44 percent of the realized national decrease in men’s labor force participation between 2001 and 2015.

The fact that the demand side blade of the scissors can be powerful does not imply the supply side blade does not matter, no matter how many snide tweets you may read to the contrary.

The paper is by Dionissi Aliprantis, Kyle Fee, and Mark E. Schweitzer at the Cleveland Fed.

Via Ilya Novak.

The man who catalogues the Royal Family

Long before there was such a thing as “Big Data,” there was Tim O’Donovan, a retired insurance broker who has meticulously tabulated the British royal family’s engagements with pencil and paper every day for 40 years.

In a row of old-fashioned leather-bound ledgers, in a wisteria-fringed house in the village of Datchet, just west of London, he has amassed an extraordinary collection of raw data. The Autumn Dinner of the Fishmongers’ Company, convened in October by Princess Anne? It’s in there. The opening of the Pattern Weaving Shed in Peebles, Scotland? Of the Dumfries House Maze? Of a window at the Church of St. Martin in the Bull Ring? Noted.

Mr. O’Donovan, 87, is not part of the hurly-burly of royal commentary. Not only is he not active on social media, he claims never to have seen it. (“I am glad to say I don’t have anything to do with it,” he said, a bit starchily. “Everything I’ve heard about it is negative.”)

Every year, Mr. O’Donovan releases a comparative table listing the number of engagements attended by the highest-ranking royals, setting off a flurry of barbed commentary in the British news media. The feeding frenzy comes because Mr. O’Donovan, intentionally or not, has effectively invented a metric of how much the members of the royal family work.

He does it for fun, as his hobby:

Born into a family of avid collectors, he hungered in his 40s to undertake a statistical project; he had been impressed by a man who used public records to tabulate the waxing and waning popularity of baby names, publishing his findings once a year in a letter to the editor of The Times of London. He found his fodder in the Court Circular, an account of the royals’ engagements that appears in The Times of London. He decided to clip each one, paste it in a ledger and run the numbers, releasing his first results at the end of 1979.

Here is more from Ellen Barry (NYT).  Here is an article on digital hoarders.

China non-fact of the day

China’s economy is about 12 per cent smaller than official figures indicate, and its real growth has been overstated by about 2 percentage points annually in recent years, according to research. The findings in the paper published on Thursday by the Brookings Institution, a Washington think-tank, reinforced longstanding scepticism about Chinese official statistics.  They also add to concerns that China’s slowdown is more severe than the government has acknowledged. Even based on official data, China’s economy grew at its slowest pace since 1990 last year at 6.6 per cent.

That is from Gabriel Wildau of the FT — adjust your debt to gdp ratios accordingly.

The Brother Earnings Penalty

This paper examines the impact of sibling gender on adolescent experiences and adult labor market outcomes for a recent cohort of U.S. women. We document an earnings penalty from the presence of a younger brother (relative to a younger sister), finding that a next-youngest brother reduces adult earnings by about 7 percent. Using rich data on parent-child interactions, parents’ expectations, disruptive behaviors, and adult outcomes, we provide a first step at examining the mechanisms behind this result. We find that brothers reduce parents’ expectations and school monitoring of female children while also increasing females’ propensity to engage in more traditionally feminine tasks. These factors help explain a portion of the labor market penalty from brothers.

That is by Angela Cooks and Eleonora Patacchin in Labour Economics.  Once again, family niche effects seem to matter.  Via the excellent Kevin Lewis.

Work isn’t so bad

Although we spend much of our waking hours working, the emotional experience of work, versus non-work, remains unclear. While the large literature on work stress suggests that work generally is aversive, some seminal theory and findings portray working as salubrious and perhaps as an escape from home life. Here, we examine the subjective experience of work (versus non-work) by conducting a quantitative review of 59 primary studies that assessed affect on working days. Meta-analyses of within-day studies indicated that there was no difference in positive affect (PA) between work versus non-work domains. Negative affect (NA) was higher for work than non-work, although the magnitude of difference was small (i.e., .22 SD, an effect size comparable to that of the difference in NA between different leisure activities like watching TV versus playing board games). Moderator analyses revealed that PA was relatively higher at work and NA relatively lower when affect was measured using “real-time” measurement (e.g., Experience Sampling Methodology) versus measured using the Day Reconstruction Method (i.e., real-time reports reveal a more favorable view of work as compared to recall/DRM reports). Additional findings from moderator analyses included significant differences in main effect sizes as a function of the specific affect, and, for PA, as a function of the age of the sample and the time of day when the non-work measurements were taken. Results for the other possible moderators including job complexity and affect intensity were not statistically significant.

That is from a new paper by Martin J. Biskup, Seth Kaplan, Jill C. Bradley-Geist, and Ashley A. Membere.  Such meta-analyses have their problems, but I consider other kinds of analysis, with complementary results, in my forthcoming book Big Business: A Love Letter to an American Anti-Hero.

Via Rolf Degen.

No Urban Wage Premium for Non-College Educated Workers

The Economist has a nice graph and article on the urban wage premium based on David Autor’s work. The graphs shown that in the past both college and non-college educated workers earned higher wages in more densely populated areas but today only college-educated workers experience an urban wage-premium.

Housing costs eat a large share of the college wage-premium so even college educated workers are not as better off in cities as the graphs make it appear. Autor’s point, however, is that wages for the non-college educated aren’t higher in cities so they might not move to cities even with lower housing costs. That could be true but I also suspect that the urban wage premium for the non-college educated is endogenous–firms employing these workers have moved out of the city but could move back in with lower housing and land costs.

CEOs play games cooperatively, and well

We study whether CEOs of private firms differ from other people with regard to their strategic decisions and beliefs about others’ strategy choices. Such differences are interesting since CEOs make decisions that are economically more relevant, because they affect not only their own utility or the well-being of household members, but the utility of many stakeholders inside and outside of the organization. They also play a central role in shaping values and norms in society. We expect differences between both groups, because CEOs are more experienced with strategic decision making than comparable people in other professional roles. Yet, due to the difficulties in recruiting this high-profile group for academic research, few studies have explored how CEOs make incentivized decisions in strategic games under strict controls and how their choices in such games differ from those made by others. Our study combines a stratified random sample of 200 CEOs of medium-sized firms with a carefully selected control group of 200 comparable people. All subjects participated in three incentivized games—Prisoner’s Dilemma, Chicken, Battle-of-the-Sexes. Beliefs were elicited for each game. We report substantial and robust differences in both behavior and beliefs between the CEOs and the control group. The most striking results are that CEOs do not best respond to beliefs; they cooperate more, play less hawkish and thereby earn much more than the control group.

Here is the paper, by Håkan J. Holm, Victor Nee, and Sonja Opper, via the excellent Rolf Degen.

The impact of the Trump trade war

We analyze the short-run impacts of the 2018 trade war on the U.S. economy. We estimate import demand and export supply elasticities using changes in U.S. and retaliatory war tariffs over time. Imports from targeted countries decline 31.5% within products, while targeted U.S. exports fall 9.5%. We find complete pass-through of U.S. tariffs to variety-level import prices, and compute the aggregate and regional impacts of the war in a general equilibrium framework that matches these elasticities. Annual losses from higher costs of imports are $68.8 billion (0.37% of GDP). After accounting for higher tariff revenue and gains to domestic producers from higher prices, the aggregate welfare loss is $6.4 billion (0.03% of GDP). U.S. tariffs favored sectors located in politically competitive counties, suggesting an ex ante rationale for the tariffs, but retaliatory tariffs offset the benefits to these counties. Tradeable-sector workers in heavily Republican counties are the most negatively affected by the trade war.

Here is the full paper, by Pablo D. Fajgelbaum, Pinelopi K. Goldberg, Patrick J. Kennedy, and Amit K. Khandelwal.  Full pass-through, of course, means that monopoly in these markets is likely not such a big deal.

The Mormon asymptote?

…compared to some other religions, Mormonism is not doing too badly.  Mormonism’s US growth rate of .75 percent in 2017 — kept in positive territory by still-higher-than-average fertility among Mormons — is actually somewhat enviable when compared to, for example, the once-thriving Southern Baptists, who have bled out more than a million members in the last ten years.  Mormonism is not yet declining in membership, but it has entered a period of decelerated growth.  In terms of congregational expansion, the LDS Church in the United States added only sixty-five new congregations in 2016, for an increase of half a percentage point.  In 2017, the church created 184 new wards and branches in the United States, but 184 units also closed, resulting in no net gain at all.

By some estimates (p.7), only about 30 percent of young single Mormons in the United States go to church regularly.  The idea of the Mormon mission, however, is rising in import:

More than half of Mormon Millennials have served a full-time mission (55 percent), which is clearly the highest proportion of any generation; among GenXers, 40 percent served, and in the Boomer/Silent generation, it was 28 percent.

In contrast, “returning to the temple on behalf of the deceased” is falling (p.54).

Mormons are about a third more likely to be married than the general U.S. population, 66 to 48 percent.  But note that 23 percent of Mormon Millennials admit to having a tattoo, against a recommended rate of zero (p.162).

And ex-Mormon snowflakes seem to be proliferating.  For GenX, the single biggest reason giving for leaving the church was “Stopped believing there was one church”.  For Millennials, it is (sadly) “Felt judged or misunderstood.”

That is all from the new and excellent Jana Riess, The Next Mormons: How Millennials are Changing the LDS Church.

Oxford University Press also sent me a copy of J. Brian O’Roark Why Superman Doesn’t Take Over the World: What Superheroes Can Tell us About Economics, which I have not yet read.