Category: Data Source

Legal Systems and Economic Performance in Colonial Shanghai, 1903-1934

Abstract: How important are legal systems to economic performance? To address this question, I focus on a historical period from colonial Shanghai, where quite different legal systems operated in the International Settlement andFrench Concession. In particular, employing novel historical data, I examine 1903–1934 land value discontinuities at the border between these Settlements. Substantial discontinuities were found in the 1900s, with higher land values associated with the International Settlement. However, by the 1930s, this land value advantage of the International Settlement had disappeared. A closer look at the institutions reveals that the French Concession adapted its operation to be more business friendly, under competition from the neighboring International Settlement. This suggests that the French legal system per se was not a barrier to economic growth, but rather it could function well if interpreted and implemented properly. This paper thus adds to evidence that formal legal system is not a key determinant of economic performance.

That is from Mingxi Li, who is on the job market this year from UC Davis.

The gender gap in preferences

This is taken from new work by Ángel Cuevas, Rubén Cuevas, Klaus Desmet, and Ignacio Ortuño-Ortín.  Here is the abstract:

This paper uses information on the frequency of 45,397 Facebook interests to study how the difference in preferences between men and women changes with a country’s degree of gender equality. For preference dimensions that are systematically biased toward the same gender across the globe, differences between men and women are larger in more gender-equal countries. In contrast, for preference dimensions with a gender bias that varies across countries, the opposite holds. This finding takes an important step toward reconciling evolutionary psychology and social role theory as they relate to gender.

Here is a bit more:

Our premise is that innately gender-specific interests should mostly conform to evolutionary psychology theory, whereas other interests should mostly conform to social role theory. We find strong evidence consistent with this premise.

And some detail on the categories:

We say that an interest is gender-related if it displays a systematic bias toward the same gender across the globe. More specifically, if in more than 90% of countries an interest is more prevalent among the same gender, then we refer to it as gender-related. For example, “cosmetics” and “motherhood” are universally more common among women, whereas “motorcycles” and “Lionel Messi” are universally more common among men. Conversely, we say that an interest is non-gender-related if its gender bias varies across countries. More specifically, if an interest is more common among men in at least 30% of countries and more common among women in at least another 30% of countries, then we refer to it as nongender-related. For example, “world heritage site” and “physical fitness” do not display a systematic gender bias across the globe.

And indeed everything works out as one ought to expect.  In the more gender-equal countries, men have “more male” interests, and the women have “more female” interests.  But for the less gender-specific interests, greater equality ends up resulting.  As for magnitude:

the standardized β is 30% when taking 9 dimensions, meaning that a one standard deviation increase in gender equality increases the difference in preferences between men and women by 30% of its standard deviation. The corresponding standardized β when taking 68 dimensions is 19%. Overall, the evidence points to a positive relation between gender equality and the difference in interests between men and women.

Hope you all are interested in this one!

The”hot hand” depends on location

Here is new research by Robert M. Lantis and Erik T. Nesson:

Do basketball players exhibit a hot hand? Results from controlled shooting situations suggest the answer is yes, while results from in-game shooting are mixed. Are the differing results because a hot hand is only present in similar shots or because testing for the hot hand in game situations is difficult? Combining repeated shots in a location and shots across locations, the NBA 3-Point Contests mimics game situations without many of the confounding factors. Using data on the 1986-2019 contests, we find a hot hand, but only within shot locations. Shooting streaks increase a hot hand only if a player makes his previous shot and only within locations. Even making three shots in a row has no effect on making the next shot if a player moves locations. Our results suggest that any hot hand in basketball is only present in extremely similar shooting situations and likely not in the run-of-play.

This YouTube video, of Stephen Curry, is one of the greatest videos of all time.

Regional personality variation across the United States

Here is a fun piece for Bloomberg, I would say you should take Five Factor personality theory somehow seriously, but not too seriously.  Excerpt:

Let’s consider extraversion. The least extroverted states in the country are Maine, Washington and Oregon, which fits my stereotype that a disproportionate number of the residents of those states are seeking some kind of isolation. Wisconsin has the most extroverted population, with Illinois, Iowa and Nebraska coming in next. The Midwest seems to be a friendly and outgoing place. That is to me also no huge surprise, though I would not have picked Wisconsin to be No. 1. The southern states come in at about average, while New Mexico, Nevada, Vermont and Montana do not measure as very extroverted, relative to the rest of the country.

And:

The data on conscientiousness run counter to stereotype. My expectation was that the Midwest would win out here, but the Southeast ranks the highest. Coastal California fares poorly, as do scattered parts of the Midwest and West, again non-obvious or unexpected results. If it restores your faith in stereotypes, the area surrounding New Orleans, perhaps the most licentious city in the South, also rates low in conscientiousness.

Overall, the two strongest correlates of conscientiousness were Republican share of the vote, and share of married individuals in the population.

When it comes to emotional stability, fans of “The Sopranos” or “Seinfeld” will not be surprised: The Northeast, stretching down through Appalachia, ranks the lowest by a noticeable amount. There’s a reason George Costanza and Tony Soprano fit right in.

Mobile internet and political polarization

So far this paper is my favorite of the job market papers I have seen this year, and it is by Nikita Melnikov of Princeton.  Please do read each and every sentence of the abstract carefully, as each and every sentence offers interesting and substantive content:

How has mobile internet affected political polarization in the United States? Using Gallup Daily Poll data covering 1,765,114 individuals in 31,499 ZIP codes between 2008 and 2017, I show that, after gaining access to 3G internet, Democratic voters became more liberal in their political views and increased their support for Democratic congressional candidates and policy priorities, while Republican voters shifted in the opposite direction. This increase in polarization largely did not take place among social media users. Instead, following the arrival of 3G, active internet and social media users from both parties became more pro-Democratic, whereas
less-active users became more pro-Republican. This divergence is partly driven by differences in news consumption between the two groups: after the arrival of 3G, active internet users decreased their consumption of Fox News, increased their consumption of CNN, and increased their political knowledge. Polarization also increased due to a political realignment of voters: wealthy, well-educated people became more liberal; poor, uneducated people—more conservative.

My read of these results (not the author’s to be clear!) is that the mobile internet polarized the Left, but not so much the Right.  What polarized the Right was…the polarization of the Left, and not the mobile internet.

And please do note this sentence: “This increase in polarization largely did not take place among social media users.”  It seems that on-line versions of older school media did a lot of the work.

Here are further papers by Melnikov.

Cognitive sentences to ponder

The main conclusions are that, although children’s intelligence relative to their peers remains associated with social class, the association may have weakened recently, mainly because the average intelligence in the highest-status classes may have moved closer to the mean.

Here is the paper by Lindsay Paterson, British data, and for the pointer I thank the excellent Kevin Lewis.

Daddy’s girl?

That is the title of a new paper by Maddelena Ronchi and Nina Smith:

We study the role of managers’ gender attitudes in shaping gender inequality within the workplace. Using Danish registry data, we exploit the birth of a daughter as opposed to a son as a plausibly exogeneous shock to male managers’ gender attitudes and compare within-firm changes in women’s labor outcomes depending on the manager’s newborn gender. We find that women’s relative earnings and employment increase by 4.4% and 2.9% respectively following the birth of the manager’s first daughter. These effects are driven by an increase in managers’ propensity to replace male workers by hiring women with comparable education, hours worked, and earnings. In line with managers’ ability to substitute men with comparable women, we do not detect any significant effect on firm performance. Finally, we find evidence of rapid behavioral responses which intensify over time, suggesting that both salience and direct exposure to themes of gender equality contribute to our results.

Note that Ronchi is on the job market this year.  Via Jennifer Doleac.  I am not sure of the last part of that last sentence (are other mechanisms possible?  Maybe these fathers simply become better at understanding female talent?), but still this is an interesting result.

Why Are Relatively Poor People Not More Supportive of Redistribution?

We test a key assumption underlying seminal theories about preferences for redistribution, which is that relatively poor people should be the most in favor of redistribution. We conduct a randomized survey experiment with over 30,000 participants across 10 countries, half of whom are informed of their position in the national income distribution. Contrary to prevailing wisdom, people who are told they are relatively poorer than they thought are less concerned about inequality and are not more supportive of redistribution. This finding is consistent with people using their own living standard as a “benchmark” for what they consider acceptable for others.

That is from a newly published paper by Christopher Hoy and Franziska Mager.

“Potential” and the gender promotion gap

We show that widely-used subjective assessments of employee “potential” contribute to gender gaps in promotion and pay. Using data on 30,000 management-track employees from a large retail chain, we find that women receive substantially lower potential ratings despite receiving higher job performance ratings. Differences in potential ratings account for 30-50% of the gender promotion gap. Women’s lower potential ratings do not appear to be based on accurate forecasts of future performance: women outperform male colleagues with the same potential ratings, both on average and on the margin of promotion. Yet, even when women outperform their previously forecasted potential, their subsequent potential ratings remain low, suggesting that firms persistently underestimate the potential of their female employees.

Here is the paper by Benson, Li, and Shue.  Via the excellent Samir Varma.

Further evidence that mobility shocks are positive

This time the work is from Emi Nakamura, Jósef Sigurdsson, Jón Steinsson, in the Review of Economic Studies:

We exploit a volcanic “experiment” to study the costs and benefits of geographic mobility. In our experiment, a third of the houses in a town were covered by lava. People living in these houses were much more likely to move away permanently. For the dependents in a household (children), our estimates suggest that being induced to move by the “lava shock” dramatically raised lifetime earnings and education. While large, these estimates come with a substantial amount of statistical uncertainty. The benefits of moving were very unequally distributed across generations: the household heads (parents) were made slightly worse off by the shock. These results suggest large barriers to moving for the children, which imply that labour does not flow to locations where it earns the highest returns. The large gains from moving for the young are surprising in light of the fact that the town affected by our volcanic experiment was (and is) a relatively high income town. We interpret our findings as evidence of the importance of comparative advantage: the gains to moving may be very large for those badly matched to the location they happened to be born in, even if differences in average income are small.

And here are some earlier mobility results related to Hurricane Katrina, another exogenous shock that forced many people out.  Make that change in your life!  Now!

Via Paul Novosad.

On the persistence of the China Shock

Here are new results from Autor, Dorn, and Hanson:

We evaluate the duration of the China trade shock and its impact on a wide range of outcomes over the period 2000 to 2019. The shock plateaued in 2010, enabling analysis of its effects for nearly a decade past its culmination. Adverse impacts of import competition on manufacturing employment, overall employment-population ratios, and income per capita in more trade-exposed U.S. commuting zones are present out to 2019. Over the full study period, greater import competition implies a reduction in the manufacturing employment-population ratio of 1.54 percentage points, which is 55% of the observed change in the value, and the absorption of 86% of this net job loss via a corresponding decrease in the overall employment rate. Reductions in population headcounts, which indicate net out-migration, register only for foreign-born workers and the native-born 25-39 years old, implying that exit from work is a primary means of adjustment to trade-induced contractions in labor demand. More negatively affected regions see modest increases in the uptake of government transfers, but these transfers primarily take the form of Social Security and Medicare benefits. Adverse outcomes are more acute in regions that initially had fewer college-educated workers and were more industrially specialized. Impacts are qualitatively—but not quantitatively—similar to those caused by the decline of employment in coal production since the 1980s, indicating that the China trade shock holds lessons for other episodes of localized job loss. Import competition from China induced changes in income per capita across local labor markets that are much larger than the spatial heterogeneity of income effects predicted by standard quantitative trade models. Even using higher-end estimates of the consumer benefits of rising trade with China, a substantial fraction of commuting zones appears to have suffered absolute declines in average real incomes.

Understanding the Rise in Life Expectancy Inequality

By Gordon B. Dahl et.al.:

We provide a novel decomposition of changing gaps in life expectancy between rich and poor into differential changes in age-specific mortality rates and differences in “survivability”. Declining age-specific mortality rates increases life expectancy, but the gain is small if the likelihood of living to this age is small (ex ante survivability) or if the expected remaining lifetime is short (ex post survivability). Lower survivability of the poor explains between one-third and one-half of the recent rise in life expectancy inequality in the US and the entire change in Denmark. Our analysis shows that the recent widening of mortality rates between rich and poor due to lifestyle-related diseases does not explain much of the rise in life expectancy inequality. Rather, the dramatic 50% reduction in cardiovascular deaths, which benefited both rich and poor, made initial differences in lifestyle-related mortality more consequential via survivability.

Via the excellent Kevin Lewis.  And RAD from the comments: “Greater survivability of cardio vascular events allows lifestyle choices to catch-up with people.”