Here is a new study by Valerie Michelman, Joseph Price, and Seth D. Zimmerman:
This paper studies social success at elite universities: who achieves it, how much it matters for students’ careers, and whether policies that increase interaction between rich and poor students can integrate the social groups that define it. Our setting is Harvard University in the 1920s and 1930s, where students compete for membership in exclusive social organizations known as final clubs. We combine within-family and room-randomization research designs with new archival and Census records documenting students’ college lives and career outcomes. We find that students from prestigious private high schools perform better socially but worse academically than others. This is important because academic success does not predict earnings, but social success does: members of selective final clubs earn 32% more than other students, and are more likely to work in finance and to join country clubs as adults, both characteristic of the era’s elite. The social success premium persists after conditioning on high school, legacy status, and even family. Leveraging a scaled residential integration policy, we show that random assignment to high-status peers raises rates of final club membership, but that overall effects are driven entirely by large gains for private school students. Residential assignment matters for long-run outcomes: more than 25 years later, a 50-percentile shift in residential peer group status raises the rate at which private school students work in finance by 37.1% and their membership in adult social clubs by 23.0%. We conclude that the social success premium in the elite labor market is large, and that its distribution depends on social interactions, but that the inequitable distribution of access to high-status social groups resists even vigorous attempts to promote cross-group cohesion.
You can think of this as another attempt to explain the relatively high returns to education, without postulating that students learn so much, and without emphasizing signaling so much. Going to Harvard is in fact winning access to a very valuable set of networks (which in turn is signaling as well, to be clear).
For the pointer I thank Tyler Ransom.
In this issue:
Five cities, five stories? Robert Kaestner explores the heterogeneity of results across Baltimore, Boston, Chicago, Los Angeles, and New York in the work of Raj Chetty, Nathaniel Hendren, and Lawrence Katz, arguing that it is misleading to suggest that moving before the age of 13 to lower-poverty neighborhoods promises better outcomes. Chetty, Hendren, and Katz respond.
The AEA: Republicans need not apply: Mitchell Langbert investigates the American Economic Association, using voter-registration data and political-contribution data to show that the AEA officers, editors, authors, and other players are quite thoroughgoingly Democratic.
The AER: How much space is given to articles on gender, race and ethnicity, and inequality?: Jeremy Horpedahl and Arnold Kling track the trends 1991–2020 for the American Economic Review and Papers & Proceedings.
Lockdowns and covid hospitalizations: John Spry criticizes a JAMA research letter by Soumya Sen, Pinar Karaca-Mandic, and Archelle Georgiou about the effectiveness of stay-at-home orders, for eliding available placebo comparisons. Sen, Karaca-Mandic, and Georgiou reply.
Reading, writing, and Adam Smith: Scott Drylie uses Smith’s final words on school financing to review interpretations of Smith on schooling.
Carl Menger: The Errors of Historicism in German Economics: The first English translation of Menger’s 1884 reply to Gustav Schmoller is provided by Karen Horn and Stefan Kolev, whose Foreword analyzes the not-so-amicable Methodenstreit.
Data alteration: Ron Michener rejoins to Farley Grubb, explaining why he thinks that Grubb had no grounds for altering John McCusker’s data series and thereby generating outliers on which his results depend. (Professor Grubb received Professor Michener’s comment too late to allow for concurrent reply but will reply in the next issue of this journal.)
Frictionless note: With the approval and gratitude of Jeffrey Bergstrand, Nico Stoeckmann corrects the constant in the equation for a special, frictionless case of Bergstrand’s gravity equation for international trade.
Liberalism in Brazil: Lucas Berlanza provides a historical and modern guide to the fortunes of liberal ideas and trends in Brazil, extending the Classical Liberalism in Econ, by Country series to 20 articles.
Readworthy 2050: Nine correspondents respond to the question: What 21st-Century Works Will Merit a Close Reading in 2050?
Karen Horn and Stefan Kolev on Menger vs. Schmoller: The translators discuss Menger’s 1884 The Errors of Historicism in German Economics and the broader Methodenstreit.
In 1790, nearly half of the nation’s enslaved people lived in Virginia.
That was about 236,000 people, and that is from Alan Taylor’s excellent Thomas Jefferson’s Education. In 1785, by the way, the state legislature unanimously rejected a proposal from evangelicals to free the state’s slaves.
Over half the journals we consider have over two thirds of their editorial power located in the USA. A large majority of journals have a tiny editorial contribution from academics located outside of North America and Europe. Any one of the states of California, Massachusetts and Illinois has more power than the four continents of Asia, South America, Africa and Australasia combined.
Here is the video, audio, and transcript. Of course Alex has a new book out Wagnerism: Art and Politics in the Shadow of Music, which explores the complicated legacy of Wagner and music more generally. We learn Alex’s nomination for the greatest pop album ever made, but many of my questions focused on progress in music and musical performance, the nature of talent, the power of culture, and also cancel culture, Wagner of course having been a frequent target for a long time. Here is one excerpt:
COWEN: One theme of your book, as I understand it, is that Wagnerism historically is more diverse than many people realize. There was a branch of Zionism that loved Wagner. There’s an African American tradition that’s quite interested in Wagner. Maybe you can talk me out of some of the worries I have when I listen to Wagner. When I listen, I feel better if I’m listening to Von Klemperer, who is Jewish, and he was a refugee, and he left Europe to come to America. I feel I’m offsetting something in Wagner that disturbs me.
And if you think about what Wagner has become, it seems the problematic element in Wagner — it does somehow match up to the music in a way which is hard to escape. No one listens to Wagner and comes away saying, “Well dull, bourgeois life, as you find under democratic capitalism, is underrated.” No one comes away from Wagner saying, “I now have a greater appreciation for methodological individualism.” Right?
ROSS: [laughs] No.
COWEN: There’s something ominous about the music. How should we, as listeners, come to terms with that? Should we feel guilty when listening to Wagner, given the association with anti-Semitism, Nazis, and much more?
ROSS: I think you should always be wary, let’s say, to Wagner. My whole history with Wagner was, actually, I started out really averse to the entire sound world. When I was a kid growing up with classical music, I tried listening to Lohengrin. I checked records of Lohengrin out of the public library, and I put them on, and I only could stand it for 10 minutes or so.
Of course, I knew nothing about anti-Semitism and Nazism and the connection with Hitler. It was just purely a question of the sound. I found the sound disturbing and this seasick feeling of bobbing from one chord to another without clear demarcations. I just had this instinctual revulsion to it…
ROSS: …conducting is so mysterious in terms of what is actually happening between the conductor and the orchestra. There are explicit messages being sent. There’re instructions being given, but there’s also this slightly mystical side to it, where once you get to a figure like Klemperer, or today, Bernard Haitink, who just retired, or Herbert Blomstedt, who is incredibly vital and active in his 90s.
ROSS: Yeah. Even before they say anything, just the mere fact, when [they] arrive at the podium, there is a level of respect. There is a level of attentiveness and readiness in the orchestra. They don’t have to be won over when Herbert Blomstedt is in front of them. His reputation . . .
Blomstedt — someone like this can just skip all the preliminaries and just go for fine-tuning these points, and everyone plays better because they’re in the presence of this celebrated, legendary older musician. It’s almost as if they don’t even need to do anything anymore. They do, of course. They are working very hard, and Blomstedt is delivering very particular instructions to the orchestra.
But there’s that psychological dimension. The musicians are excited to be having this opportunity, and they think this might be the last time, so they give something more. So that’s the mystery of conducting.
I always think of that anecdote about Furtwängler — I think it was Walter Legge who told this story — watching the orchestra rehearse with a different conductor, and they were playing all right, nothing too inspired. He’s looking straight ahead and looking at the orchestra, and suddenly something changes. Suddenly the playing is electrified, transformed. The conductor seems to have done nothing different. And so, “What is going on? How did that change take place?”
Then he happens to look over his shoulder. Furtwängler is standing by the door, watching. In the few minutes that he’s entered the hall and has been standing at the back, the orchestra noticed him there, and their playing changed completely. So that’s the weird, the slightly occult power that the conductors can have. Just their mere presence transforms the playing.
And I start with this:
COWEN: I have so many questions about Wagner. Let me start with one. Why is it I have the perception that the truly great Wagner recordings come from the 1950s or the 1960s? If I think even of the talk you gave for the New Yorker — well, you talked about Keilberth and Solti and Furtwängler. Those are ancient recordings. Clemens Krauss, that was what, 1953? What has happened to the recording quality of Wagner?
“The email sent by Penn SAS Deans last Tuesday needs to be interpreted with some care. In particular, notice the words “school-funded Ph.D. programs.” There is a lot of institutional background that is lost when the email is read from the outside, especially because the Economics Ph.D. program has its own funding structure that differs from other Ph.D. programs at Penn SAS.
At this moment, the Department of Economics is working out the details of the next year incoming class, but a first-year incoming class and regular classes first-year are planned. Also notice that much of graduate teaching in economics involves Ph.D. students from Wharton, who are not part of SAS. Wharton is going ahead with its Ph.D. admissions.”
That is from an email from a well-informed inside source. Here is the original MR post, blame it on the Dean.
Academics should not be forced to squeeze their research into weekends and holidays, according to the Dutch education minister, who admitted that pressure on some researchers had become intolerable and that professional competition had gone “too far.”
Ingrid van Engelshoven wants to reduce stress and time pressure in academe by tipping the balance away from competitive grants and toward more stable support for universities, reversing a long-term research funding trend in the Netherlands and elsewhere.
Speaking to Times Higher Education in the Hague, she hoped that reforms to Dutch academe would mean that in five to 10 years, academics would be able to do their research “within normal working hours.”
“So you don’t have to skip your vacation, skip your weekend, because you’re busy all week with teaching your students, designing your online courses [or] … drafting your applications for grants,” she said.
Here is the full story by David Matthews.
The School of Arts and Sciences will pause admissions for school-funded Ph.D. programs for the 2021-2022 academic year.
SAS Dean Steven J. Fluharty and Associate Dean for Graduate Students Beth Wenger wrote in an email to SAS standing faculty and graduate students on Tuesday that the decision was made as a result of the COVID-19 pandemic’s impact on the school’s finances.
Addendum: See this update and correction.
There is plenty of relevant psychological advice, here is some more narrowly economic advice from my latest Bloomberg column. Start with this key point:
…it is a common result in empirical economics that consumption habits are slow to adjust to changing circumstances, especially unprecedented circumstances. It is not enough for you to develop new spending habits — you should double down on them.
Savings have been so high in part because people are hoarding resources for an uncertain future. But a lot of the explanation, especially for those with higher incomes, is that planned expenditures became impossible, dangerous or inconvenient. Instead of flying to Paris and staying at a hotel on the Seine, they drove to a cabin in Maine or West Virginia. Or maybe they postponed that purchase of a new car or spent less time browsing in a bookstore. In any case, the end result is less spending and more savings, whether conscious or not.
Those may well have been prudent decisions. Still, many of us are not spending enough money having fun. We have been too slow to develop new, Covid-compatible interests.
Furthermore, likely you are underinvesting in driving to go see people, again due to the sluggishness of habit adjustment. In most parts of America, traffic remains somewhat lower than before, and your human contact is likely lower than before. Go and have lunch with them outside before the weather gets too cold!
I have not applied further indentation:
“…this is seemingly starting to be a big deal in OK, but flying under the radar.
- 10-15 years ago Oklahoma passed a law allowing online-only charter schools with a separate regulatory structure from physical charter schools.
- Critically, the unions did not think to push for an enrollment cap.
- There are 5-10 schools, all quite small, except for one named EPIC.
- Has enrollment (~38,000) that is larger than any district in the state. This enrollment is currently surging faster than its usual high growth because of COVID-19 and could reach 46,000 by the Oct 1 “Money Head Count” deadline.
- From Oct 1, 2018 to Oct 1, 2019, EPIC’s enrollment grew more than the enrollment growth for the entire state of OK.
- Like all public charters in OK, the school is free to attend. Parents get paid $1000 per student per year for school supplies and activities.
- They have 100% online and blended learning options. Teachers in the online-only are paid by how many students they take on and can earn over $100,000. The state average pay for teachers is just over $50,000/yr.
- They are a non-profit but they are run by a closely related for-profit management company that is paid 10% of gross revenue. (Incentives!)
- Everyone in OK education that isn’t EPIC, hates EPIC. The state has multiple lawsuits and audits alleging that they have been committing fraud. These go back as far as 2012 but none have yet been resolved, even with open investigations by the Oklahoma State Bureau of Investigation. The alleged amounts are less than 1% of cumulative revenue.
- An Oklahoma Watch survey from several years ago found that parents were choosing EPIC primarily because they felt their students were falling behind at their districted school, were escaping bullying, or had a desire to pursue other activities i.e. competitive gymnastics.
- On the Oklahoma State Dept. of Education A-F scorecard, EPIC scores better than every traditional Oklahoma City Public Schools and Tulsa Public Schools middle school or high school. It performs roughly near the state average.
- 4-year high school graduation rates are SIGNIFICANTLY lower than traditional schools.
- It seems likely this is because with the online format you cannot graduate without completing assignments on time. There are OKCPS schools that have 1% of students performing at grade level and 95% graduation rates.
- Total Oklahoma K-12 enrollment for 2019-2020 was ~700,000. So EPIC is now over 5% of total state enrollment. They have been growing roughly 50%/year, but that was starting to slow some before the pandemic.
And they are trying to scale gamification of learning:
Like most online education providers, retention has been their weakest point.
Oklahoma schools are required to have each school facility staffed with a certain number of non-teaching positions (librarian, counselor, etc.) so fixed costs are very high. Teacher salaries are usually 35-40% of the budget and are one of the only variable cost centers. Most money is allocated by the state, following the student. EPIC is not far from doing real damage to traditional school finances. This does not seem to be on most people’s radar. It could get more interesting, yet.
Yes, in short. Here is a new paper from Corey Deangelis and Christos Makridis:
The COVID-19 pandemic led to widespread school closures affecting millions of K-12 students in the United States in the spring of 2020. Groups representing teachers have pushed to reopen public schools virtually in the fall because of concerns about the health risks associated with reopening in person. In theory, stronger teachers’ unions may more successfully influence public school districts to reopen without in-person instruction. Using data on the reopening decisions of 835 public school districts in the United States, we find that school districts in locations with stronger teachers’ unions are less likely to reopen in person even after we control semi-parametrically for differences in local demographic characteristics. These results are robust to four measures of union strength, various potential confounding characteristics, and a further disaggregation to the county level. We also do not find evidence to suggest that measures of COVID-19 risk are correlated with school reopening decisions.
And please do note that last sentence again:
We also do not find evidence to suggest that measures of COVID-19 risk are correlated with school reopening decisions (emphasis added).
Via the excellent Kevin Lewis.
So what to make of the apparent growing strength of cancel culture and affiliated movements? Here is the fundamental point: With the rise of social media and low-cost communications, virtually everything that can be said, will be said.
It might be said on Twitter rather than on the evening news, or on 4Chan rather than on Facebook. But the sentiments will be out there, and many of them will be disturbing. The world has arrived at a place where just about every politically incorrect statement — and a response to it, not to mention every politically correct statement and a response to that — is published or recorded somewhere.
So the policing of speech may be vastly more common than it was, say, 15 years ago. But the discourse itself is vastly greater in scope. Political correctness has in fact run amok, but so then has everything else.
As a general principle, people notice what disturbs them more than what doesn’t. Therefore opponents of political correctness — and I include myself in this group — have a never-ending supply of anecdotes to be concerned about. I am not suggesting that this cycle will end well, but it does put the matter in perspective.
The issue is how social norms will adjust to cope with a world where everything is being said all the time. That path will not be smooth — but anxiety about it is different from fear of political correctness simply swallowing up everything and canceling everybody.
I’m no optimist. In fact, I suspect it will be harder to rein in the chaos and bewilderment from the say-whatever-you-want culture — have you checked out the pandemic discourse lately? — than to curb the intemperance of the you-can’t-say-that culture.
Consider also the evolution of internet communication. For all of its diversity, there are significant trends toward centralization. The English language is more focal than before, national politics command more attention than local politics, and the U.S. itself has more soft power in some crucial directions, thanks to its central role in the internet’s intellectual infrastructure. It is striking, for example, how much the entire world responded to the Black Lives Matter movement.
That means Americans will be subject to more cancellations and to more political correctness than people in the rest of the world. For better or worse, Americans are the central nexus that so many others are talking about, not always favorably. To quote Joseph Heller: Just because you’re paranoid doesn’t mean they aren’t after you — and Americans have good reason to be paranoid these days. If you published your politically incorrect column in your local Croatian newspaper, the rest of the internet just wouldn’t care all that much.
Yet note the underlying assumption here — namely, that American soft power is indeed growing. And if you are an American intellectual, your relative influence around the world is likely to be growing as well. With that greater influence comes greater scrutiny, and greater risk that you will be treated unfairly by the PC brigades. Is that really such a bad trade-off?
At first I was afraid that “all the wrong people” would like this piece, but so far so good.
I will be having a Conversation with him soon. So what should I ask him?
Here are previous MR posts on Michael Kremer.
Yes, the Jason Furman, here is the audio and transcript, please note this was recorded in January. Here is part of the summary:
Jason joined Tyler for a wide-ranging conversation on how monopolies affect investment patterns, his top three recommendations to improve American productivity, why he’s skeptical of place-based development policies, what some pro-immigration arguments get wrong, why he’s more concerned about companies like Facebook and Google than he is Walmart and Amazon, the merits of a human rights approach to privacy, whether the EU treats tech companies fairly, having Matt Damon as a college roommate, the future of fintech, his highest objective when teaching economics, what he learned from coauthoring a paper with someone who disagrees with him, why he’s a prolific Goodreads reviewer, and more.
And here is one excerpt:
COWEN: The US is losing some of its manufacturing capacity, and certainly a lot of its manufacturing workforce. Are there external benefits to keeping those activities more in the US? Significant benefits?
FURMAN: I don’t think that manufacturing itself should be an important objective of US policy. It’s one type of job. It’s been a good type of job, but there’s other good types of jobs as well. I wouldn’t focus on where physical things are being made as opposed to where services are being made. In fact, if anything, I think the error in policy is probably a little bit too much emphasis on manufacturing and a little bit less on services.
COWEN: What do you think of the national security argument? That, say, when building a ship, we might be dependent on South Korean components. If there were a war in Asia, those might be, for some reason, unreliable. We depend on China for rare earths. We depend on Taiwan, to some extent, for high-quality chips, even though we make our own. Is the supply chain extended too long, and it was a kind of economic fantasy, and it doesn’t make national security sense?
FURMAN: I don’t consider myself an expert in any of those national security questions, so I would be open to thinking about the national security concerns associated with the supply chain. I have an awful lot in specific cases — both when I was in government and just in the world more generally — heard people make national security arguments that I found tendentious and pretty unpersuasive.
There may be some that are persuasive and that are true. There’s an awful lot that aren’t. Our administration, towards the end, worried a bit about semiconductors. When I’ve looked at that, there’s enough of a diversified world supply, enough of an ability to scale up if necessary in the United States, that I don’t think on semiconductors — there, it was protectionism under the guise of national security.
So I think we should accept the possibility of national security, take it seriously, but be really, really wary that a lot of protectionist arguments use that trappings.
Economics throughout, with a touch of Dickens. Recommended.
The AEA emails me this (web version here):
The AEA suggests that employers wait to extend interview invitations until Monday, December 7, 2020 or later.
Rationale: the AEA will deliver signals from job candidates to employers on December 2. We suggest that employers wait and review those signals and incorporate them into their decision-making, before extending interview invitations.
…The AEA suggests that employers conduct initial interviews starting on Wednesday, January 6, 2021, and that all interviews take place virtually; i.e. either by phone or online (e.g. by Zoom). We also ask that all employers indicate on EconTrack when they have extended interview invitations (https://www.aeaweb.org/
Rationale: In the past, interviews were conducted at the AEA/ASSA meetings. This promoted thickness of the market, because most candidates and employers were present at the in-person meetings, but had the disadvantage of precluding both job candidates and interviewers from fully participating in AEA/ASSA sessions. Since the 2021 AEA/ASSA meetings (which will take place Jan 3-5, 2021) will be entirely virtual, we suggest that interviews NOT take place during the AEA/ASSA meetings to allow job candidates and interviewers to participate in the conference.
Perhaps not surprisingly, they don’t offer much economic analysis of this recommendation. I have a few remarks, none of which are beyond the analytical acumen of the AEA itself:
1. This proposal could well be a tax on the more conscientious departments, which will abide by the stricture while the more rogue departments jump the gun, giving them a relative advantage in finding job candidates.
2. It is common practice for the very top departments to make phone calls to advisors early, well before Christmas, and in essence tie up their future hires before the rest of the market clears (even if the ink on the contract is not dry until later on). Whatever you might think of this practice, have any of those departments vowed to stop doing this? If not, is the new recommendation simply an exhortation that other departments ought not to copy them, thus giving them exclusive use of this practice? And did the AEA — which essentially is run by people from those top schools — ever complain about this practice?
3. In the more liquid market, as this proposal is designed to create, the better job candidates are likely to end up going to the more highly rated schools. That is the opposite of how the NBA draft works — this year the Minnesota Timberwolves (a very bad team) pick first. So maybe the more liquid market is best for the most highly rated schools — is that obviously a good thing?
4. Many job candidates don’t get any early offers at all, and this is likely to be all the more true with Covid-19 and tight state budgets. Aren’t they better off if the market clears sooner rather than later? Then they can either move on to other jobs searches, take jobs with community colleges, look for postdocs, or whatever. Why postpone those adjustments? Is their welfare being counted in this analysis? Aren’t some of them the very neediest and also most stressed people in the economics job market?
5. Let’s say instead the market is done sequentially, where first you “auction off” the candidates in highest demand, ensuring that say a department rated #17 does not tie up an offer (fruitlessly, at that) to one of the very top candidates. Won’t that #17 school then bid harder for the candidates one tier lower, thus making that part of the market more liquid? I know it doesn’t have to work out that way, but surely that is one plausible scenario?
6. In finance, there are some results that you get less “racing” behavior with batched rather than continuous trading auctions. Again, that doesn’t have to be true, but surely it is no accident that many high-frequency traders oppose the idea of periodic rather than continuous securities auctions? What exactly are the relevant conditions here?
7. Would many economists recommend that say the top tech firms not make any offers before a certain date, so as to keep that labor market “more liquid”? What exactly is the difference here?
8. Might it be possible that a permanent shift to non-coordinated interview dates, and less temporally coordinated Zoom interviews and fly-outs, would permanently lower the status and import of said AEA?
I do not wish to pretend those are the only relevant factors. But here is a simple question: does anyone connected with the AEA have the stones to actually write a cogent economic or game-theoretic analysis of this proposal? Or does the AEA not do economics any more?