Category: Data Source
Facts about Rwanda
…Rwanda is still poorer than most African countries due to being less urbanized than most African nations (Rwanda is 82% rural compared to Sub Saharan Africa’s 57% average). Rwanda’s donor aid adds up to ~75% of Rwanda’s government spending, which is roughly $1B.
The average Rwandan makes $1K a year ($3300 at purchasing power parity). At purchasing power parity, Rwanda is far poorer than a Nigerian, Kenyan, or Senegalese (for now) but the average Rwandan is still richer than a Ugandan, Burkinabe, or an Ethiopian…
Rwanda is fast growing, but its growing from a very low base. To put in perspective, even though the oil-state, Angola, has on average declined nearly 3% every year from 2013 to 2023 due to the post 2014 oil price collapse, the average Angolan still makes more than 2x the average Rwandan.
And this:
Like most developing countries, Rwanda’s economy is 75% informal. Rwanda blends economic models: besides private companies, Rwanda has military-owned enterprises like Egypt, Pakistan, or Uganda, party-owned enterprises akin to pre-1990s Taiwan & Eritrea, and state-owned enterprises targeting FDI for joint ventures, similar to Vietnam or Singapore…
Kagame initially embraced neoliberal privatization but then walked it back in the early 2000s to create party-owned enterprises through the Rwanda Patriotic Front (RPF). These enterprises supplement limited tax revenue and are managed by RPF-appointed elites, controlling major sectors like real estate, agro-processing, and manufacturing.
Here is more from Yaw, informative throughout.
Congestion pricing update
Data collected by INRIX, a transportation analytics firm, found that travel times across the city and region had actually slowed overall at peak rush hours — by 3 percent in the morning and 4 percent in the evening — during the first two weeks of congestion pricing compared to a similar period last year.
Travel times improved on highways and major roads in Manhattan during both the morning and evening rush hours. But they were slower in Brooklyn and on Staten Island in the morning and in Queens and the Bronx in the evening.
Times also increased in some New Jersey counties, including Essex and Bergen, but improved in Nassau County on Long Island.
Here is more from the NYT. This is very far from the final word, however.
Do Migrants Pay Their Way? A Net Fiscal Analysis for Germany
This study quantifies the direct average net fiscal impact (ANFI) of migration in Germany, taking into account both indirect taxes and in-kind benefits such as health and education spending. Using a status quo approach with data from the German Socio-Economic Panel (SOEP) for 2018 and microsimulation techniques to impute both indirect taxes and in-kind benefits, our results show that migrants, especially first-generation migrants, have a more favorable net fiscal impact on average compared to natives. However, we demonstrate that this result is mainly driven by the favourable age structure of migrants. When controlling for demographic differences between these groups, we show that second-generation migrants contribute very similarly to natives to the German welfare state. Nevertheless, both natives and second-generation migrants, respectively, contribute more than first-generation migrants. These differences persist even when we do not account for indirect taxes and benefits-in-kind.
That is from a recent paper by Hend Sallam and Michael Christl. One interesting point in the paper is that native Germans have a net negative fiscal impact — is that really consistent with blaming the immigrants for the major problems?
Via the excellent Samir Varma.
Gender gaps in education and declining marriage rates
Over the past half-century, the share of men enrolled in college has steadily declined relative to women. Today, 1.6 million more women than men attend four-year colleges in the U.S. This trend has not lowered marriage rates for college women, a substantial share of whom have historically married economically stable men without college degrees. Both historical evidence and cross-area comparisons suggest that worsening male outcomes primarily undermine the marriage prospects of non-college women. The gap in marriage rates between college-and non-college women is more than 50% smaller in areas where men have the lowest rates of joblessness and incarceration.
That is from a new paper by Clara Chambers, Benny Goldman, and Joseph Winkelmann. Via the excellent Kevin Lewis.
The 1920s immigration restrictions
The 1920s immigration restrictions in the US did not affect manufacturing wages.
The US immigration restrictions of the 1920s lowered the occupational standings of whites and incumbent immigrants.
US counties with more immigrants excluded by the quotas of the 1920s saw increased in-migration.
During the Great Black Migration of the US, black southerners moved to northern counties, filling roles left by excluded immigrants.
During the Great Black Migration, blacks who migrated to counties with more excluded immigrants experienced greater economic gains.
That is from a new piece by Bin Xie in the Journal of Comparative Economics. Via the excellent Kevin Lewis.
More on the AI virtual tutor
The results of the randomized evaluation, soon to be published, reveal overwhelmingly positive effects on learning outcomes. After the six-week intervention between June and July 2024, students took a pen-and-paper test to assess their performance in three key areas: English language—the primary focus of the pilot—AI knowledge, and digital skills.
Students who were randomly assigned to participate in the program significantly outperformed their peers who were not in all areas, including English, which was the main goal of the program. These findings provide strong evidence that generative AI, when implemented thoughtfully with teacher support, can function effectively as a virtual tutor.
Notably, the benefits extended beyond the scope of the program itself. Students who participated also performed better on their end-of-year curricular exams. These exams, part of the regular school program, covered topics well beyond those addressed in the six-week intervention. This suggests that students who learned to engage effectively with AI may have leveraged these skills to explore and master other topics independently.
Moreover, the program benefited all students, not just the highest achievers. Girls, who were initially lagging boys in performance, seemed to gain even more from the intervention, highlighting its potential to bridge gender gaps in learning.
Here is more from the World Bank. Replication is required, but this is encouraging.
Gordon Tullock was right
Do minimum wage changes affect workplace health and safety? Using the universe of workers’ compensation claims in California over 2000-2019, we estimate whether minimum wage shocks affect the rate of workplace injuries. Our identification exploits both geographic variation in state-and city-level minimum wages and local occupation-level variation in exposure to minimum wage changes. We find that a 10% increase in the minimum wage increases the injury rate by 11% in an occupation-metro area labor market which is fully exposed to the minimum wage increase. Our results imply an elasticity of the workplace injury rate to minimum-wage-induced wage changes of 1.4. We find particularly large effects on injuries relating to cumulative physical strain, suggesting that employers respond to minimum wage increases by intensifying the pace of work, which in turn increases injury risk.
That is from a new working paper by Michael Davies, R. Jisung Park, and Anna Stansbury, MIT and U. Penn, by the way. Via the excellent Kevin Lewis.
Anonymous Attention and Abuse
There is a new paper by Florian Ederer, Paul Goldsmith-Pinkham, and Kyle Jensen. It concerns what happens on EJMR, and abusive rhetoric in on line economic discourse. I have not yet read it, but very likely it is of interest. Here is the direct paper link.
The circulation of elites, sort of
Is the top tail of wealth a set of fixed individuals or is there substantial turnover? We estimate upper-tail wealth dynamics during the Gilded Age and beyond, a time of rapid wealth accumulation and concentration in the late 19th and early 20th centuries. Using various wealth proxies and data tracking tens of millions of individuals, we find that most extremely wealthy individuals drop out of the top tail within their lifetimes. Yet, elite wealth still matters. We find a non-linear association between grandparental wealth and being in the top 1%, such that having a rich grandparent exponentially increases the likelihood of reaching the top 1%. Still, over 90% of the grandchildren of top 1% wealth grandfathers did not achieve that level.
That is from a new NBER working paper by Priti Kalsi and Zachary Ward.
Facts about U.S. employment
First, the labor market is no longer polarizing— employment in low- and middle-paid occupations has declined, while highly paid employment has grown. Second, employment growth has stalled in low-paid service jobs. Third, the share of employment in STEM jobs has increased by more than 50 percent since 2010, fueled by growth in software and computer-related occupations. Fourth, retail sales employment has declined by 25 percent in the last decade, likely because of technological improvements in online retail.
That is from a recent NBER working paper by David J. Deming, Christopher Ong, and Lawrence M. Summers.
Canada’s missing entrepreneurs
The sick leave culture that is German
Germans are the “world champions in sick leave”, according to the head of the country’s biggest insurer, who was criticised for demanding that workers without a doctor’s note are unpaid for their first day off.
With the economy slowing and the welfare system under pressure, Germany can ill afford its average per worker of 20 sick days a year, said Oliver Bäte, the chief executive of Allianz SE. The EU average is eight.
The figure of 20 days, based on research by the health insurer DAK, puts a further dent in Germany’s ailing work ethic reputation. Last April, Christian Lindner, then finance minister, admitted that the French, Italians and other nationalities worked “a lot more than we do”, after OECD data showed Germans put in significantly fewer working hours per year than their EU and British neighbours…
“In countries like Switzerland and Denmark people work a month longer per year on average — with comparable pay,” he pointed out.
Here is more from the Times of London. If you can get through the gate, you will see it is Mexico that is the work ethic country.
Evolving Returns to Personality
Weanalyze trends in labor-market returns to psychological traits using data from half a million Finnish men from 2001 to 2015. Cognitive skills’ value declined, while noncognitive skills’ value increased. Our novel findings show that extraversion drives this rise, while conscientiousness remains stable. Extraversion’s rising returns are most pronounced for lower earners and those on the employment margin. These traits predict different labor market paths: extraversion predicts lower education and more work experience, while cognitive ability and conscientiousness lead to higher education and high-paying jobs.
That is from a recent paper by Ramin Izadi and Joonas Tuhkuri.
One early report on congestion pricing in NYC
That is my latest Bloomberg column, here is one bit:
The core version of the plan stipulates a $9 toll for drivers entering Manhattan below and including 60th Street. Implementation is by E-Z Pass, and the tolls can vary in complex ways. But if you don’t cross the line, you don’t pay. So residents below 60th Street are exempt, provided they stay within the zone.
And:
The data do indicate some effective immediate adjustments. Most notably, morning commutes through the major bridges and tunnels into Manhattan have eased. Presumably the tolls have discouraged some drivers whose trips were less important to them, leading to quicker travel times for those drivers willing to pay. Economists typically consider such changes to be an improvement.
Such changes, however, aren’t of much help to native New Yorkers, in particular those living inside the zone. The earliest measurements indicate that traffic within the zone has not eased notably. So far, I would say the biggest beneficiaries of the policy are the wealthier residents of New Jersey and the New York state government, which is now set to take in more revenue.
Whatever you think of those consequences — YMMV, as they say — at least there is now actual data to sift through. You can track it here, and again it is important to stress that these preliminary assessments may change with time.
Many Manhattanites supported the charges on the grounds that they wanted a quieter, cleaner, less congested center city that was more friendly to bicycles and pedestrians. Think of Copenhagen or Amsterdam, if you have ever been. What they may end up getting is a central city more friendly to their cars — and less friendly to outsiders. It remains to be seen if central Manhattan has a path to becoming truly pleasant in the Nordic sense.
I will continue to follow this issue, as new results will be coming in. Of course stiff tolls on those living inside the zone were the correct thing to do. But that is not how politics works.
When did sustained economic growth begin?
The subtitle is New Estimates of Productivity Growth in England from 1250 to 1870, and the authors are Paul Bouscasse, Emi Nakamura, and Jón Steinsson. Abstract:
We estimate productivity growth in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. Our estimates account for these Malthusian dynamics. We find that productivity growth was zero prior to 1600. Productivity growth began in 1600—almost a century before the Glorious Revolution. Thus, the onset of productivity growth preceded the bourgeois institutional reforms of 17th century England. We estimate productivity growth of 2% per decade between 1600 and 1800, increasing to 5% per decade between 1810 and 1860. Much of the increase in output growth during the Industrial Revolution is explained by structural change—the falling importance of land in production—rather than faster productivity growth. Stagnant real wages in the 18th and early 19th centuries—“Engel’s Pause”—is explained by rapid population growth putting downward pressure on real wages. Yet, feedback from population growth to real wages is sufficiently weak to permit sustained deviations from the “iron law of wages” prior to the Industrial Revolution.
The 17th century truly is the important century.