Category: Education

A Weighty Economics Puzzle

by  Alex Tabarrok in

Yesterday a new study was released showing that patients on Eli Lilly’s Zepbound (tirzepatide) lost weight but regained a meaningful percentage after being switched to placebo. Eli Lilly stock “tumbled” on the news, e.g. here and here or see below. In other words, Eli Lilly stock fell when investors learned that to keep the weight off patients would have to continue to take Zepbound for life. Hmmm…that certainly violates what the man in the street thinks about pharmaceutical companies and profits. Chris Rock, for example, says the money isn’t in the cure, the money’s in the comeback. If so, shouldn’t this have been great news for Eli Lilly?

So why did Eli Lilly stock fall? Could it be that the Chris Rock and the man in the street are wrong? I will leave this as an exercise for the reader.

Freedom of speech for university staff?

by  Tyler Cowen in

Put aside the more virtuous public universities, where such matters are governed by law.  What policies should private universities have toward freedom of speech for university staff?  This is not such a simple question, even if you are in non-legal realms a big believer in de facto freedom of speech practices.

Just look at companies or for that matter (non-university) non-profits.  How many of them allow staff to say whatever they want, without fear of firing?  What if a middle manager at General Foods went around making offensive (or perceived to be offensive) remarks about other staff members?  Repeatedly, and after having been told to stop.  There is a good chance that person will end up fired, even if senior management is not seeking to restrict speech or opinion per se.  Other people on the staff will object, and of course some of the offensive remarks might be about them.  The speech offender just won’t be able to work with a lot of the company any more.  Maybe that person won’t end up fired, but would any companies restrict their policies, ex ante, to promise that person won’t be fired?  Or in any way penalized, set aside, restricted from working with others or from receiving supervisory promotions, and so on?

You already know the answers to those questions.

Freedom of speech for university staff is a harder question than for students or faculty.  Students will move on, and a lot of faculty hate each other anyway, and don’t have to work together very much.  Plus the protection of tenure was (supposedly?) designed to support freedom of speech and opinion, even “perceived to be offensive” opinions.  As for students, we want them to be experimenting with different opinions in their youth, even if some of those opinions are bad or stupid.  Staff in these regards are different.

Staff are growing in numbers and import at universities.  They often are the leaders of Woke movements.  Counselors, Director of Student Affairs, associate Deans, and much more.  Then there are the events teams and the athletic departments, and more yet.  Perhaps some schools spend more on staff than on faculty?

While it is hard to give staff absolute free speech rights, it is also hard to give them differential free speech rights.  A cultural tone is set within the organization.  If everyone else has free speech rights, how exactly do you enforce restrictions on staff?  Should a university set up a “thought police” but for staff only?  Can you really circumscribe the powers of such a thought police over time?  Besides, what if a staff member signs up for a single night course?  Do they all of a sudden have the free speech rights of students?  How might you know when they are “speaking as a student” or “speaking as a staff member”?  Or what if staff are overseeing the free speech rights of faculty and students, as is pretty much always the case?  The enforcers of student free speech rights don’t have those same free speech rights themselves?  What kind of culture are they then being led to respect and maintain?  And what if staff are merely expressing their opinions off-campus, say on their Facebook pages?  Does all that get monitored?  Or do you simply encourage one set of people to selectively complain about another set, as a kind of weaponization of some views but not others?

You might have your own theoretical answers to these conundrums, but the cultural norms of large institutions usually aren’t finely grained enough to support them all.

If you think that free speech rights for university staff are an easy question, I submit you haven’t thought about this one long and hard enough.

Wisconsin DEI markets in everything

by  Tyler Cowen in

In a deal months in the making, the University of Wisconsin System has agreed to “reimagine” its diversity efforts, restructuring dozens of staff into positions serving all students and freezing the total number of diversity positions for the next three years.

In exchange, universities would receive $800 million for employee pay raises and some building projects, including a new engineering building for UW-Madison.

“This is an evolution, and this is a change moving forward,” UW System President Jay Rothman told the Milwaukee Journal Sentinel. “But it does not in any way deviate from our core values of diversity (and) inclusion.”

Here is the full story, via HB, it is rare that the real world is actually so Coasean.

The University presidents

by  Tyler Cowen in

Here is three and a half minutes of their testimony before Congress.  Worth a watch, if you haven’t already.  I have viewed some other segments as well, none of them impressive.  I can’t bring myself to sit through the whole thing.

I don’t doubt that I would find their actual views on world affairs highly objectionable, but that is not why I am here today.  Here are a few other points:

1. Their entire testimony is ruled by their lawyers, by their fear that their universities might be sued, and their need to placate internal interest groups.  That is a major problem, in addition to their unwillingness to condemn various forms of rhetoric for violating their codes of conduct.  As Katherine Boyle stated: “This is Rule by HR Department and it gets dark very fast.”

How do you think that affects the quality of their other decisions?  The perceptions and incentives of their subordinates?

2. They are all in a defensive crouch.  None of them are good on TV.  None of them are good in front of Congress.  They have ended up disgracing their universities, in front of massive audiences (the largest they ever will have?), simply for the end goal of maintaining a kind of (illusory?) maximum defensibility for their positions within their universities.  At that they are too skilled.

How do you think that affects the quality of their other decisions?  The perceptions and incentives of their subordinates?

What do you think about the mechanisms that led these particular individuals to be selected for top leadership positions?

3. Not one came close to admitting how hypocritical private university policies are on free speech.  You can call for Intifada but cannot express say various opinions about trans individuals.  Not de facto.  Whether you think they should or not, none of these universities comes close to enforcing “First Amendment standards” for speech, even off-campus speech for their faculty, students, and affiliates.

What do you think that says about the quality and forthrightness of their other decisions?  Of the subsequent perceptions and incentives of their subordinates?

What do you think about the mechanisms that led this particular equilibrium to evolve?

Overall this was a dark day for American higher education.  I want you to keep in mind that the incentives you saw on display rule so many other parts of the system, albeit usually invisibly.  Don’t forget that.  These university presidents have solved for what they think is the equilibrium, and it ain’t pretty.

Who is responsible for grade inflation at Yale? (economists are meanies?)

by  Tyler Cowen in

If you click on the tweet you can see the full lists, as it gets much worse than what makes it on the screen here.  Via T. Greer.

My excellent Conversation with John Gray

by  Tyler Cowen in

I had been wanting to do this one for a while, and now it exists.  Here is the audio and transcript, here is the episode summary:

Tyler and John sat down to discuss his latest book, including who he thinks will carry on his work, what young people should learn if liberalism is dead, whether modern physics allows for true atheism, what in Eastern Orthodoxy attracts him, the benefits of pessimism, what philanthropic cause he’d invest a billion dollars in, under what circumstances he’d sacrifice his life, what he makes of UFOs, the current renaissance in film and books, whether Monty Python is still funny, how Herman Melville influenced him, who first spotted his talent, his most unusual work habit, what he’ll do next, and more.

Excerpt:

COWEN: Do you think that being pessimistic gives you pleasure? Or what’s the return in it from a purely pragmatic point of view?

GRAY: You are well prepared for events. You don’t expect —

COWEN: It’s a preemption, right? You become addicted to preempting bad news with pessimism.

GRAY: No, no. When something comes along which contradicts my expectations, I’m pleasantly surprised. I get pleasant surprises. Whereas, if you are an adamant optimist, you must be in torment every time you turn the news on because the same old follies, the same old crimes, the same old atrocities, the same old hatreds just repeat themselves over and over again. I’m not surprised by that at all. That’s like the weather. It’s like living in a science fiction environment in which it rains nearly all of the time, but from time to time it stops and there’s beautiful sunlight.

If you think that basically there is beautiful sunlight all the time, but you’re just living in a small patch of it, most of your life will be spent in frustration. If you think the other way around, as I do, your life will be peppered, speckled with moments in which what you expect doesn’t happen, but something better happens.

COWEN: Why can’t one just build things and be resiliently optimistic in a pragmatic, cautionary sense, and take comfort in the fact that you would rather have the problems of the world today than, say, the problems of the world in the year 1000? It’s not absolute optimism where you attach to the mood qua mood, but you simply want to do things and draw a positive energy from that, and it’s self-reinforcing. Why isn’t that a better view than what you’re calling pessimism?

And:

COWEN: Under what circumstances would you be willing to sacrifice your life? Or for what?

GRAY: Not for humanity, that’s for sure.

Recommended, interesting throughout.  John is one of the smartest and best read thinkers and writers.  He even has an answer ready for why he isn’t short the market.  And don’t forget John’s new book — I read all of them — New Leviathans: Thoughts After Liberalism.

Why Housing is Unaffordable: The Elasticity of Supply

by  Alex Tabarrok in

We have a great new MRU video on housing and why it’s so expensive in many dynamic cities. The video is a good introduction to the economics and also to the politics of housing supply. A highlight is a wonderful animation illustrating how increasing demand coupled with inelastic supply leads to competitive bidding among buyers, driving up prices. Anyone teaching economics should take a look.

Of course, the video pairs perfectly with our textbook, Modern Principles. Indeed, this is the initial video in a two-part series exploring the elasticity of supply, transforming a traditionally mundane topic into a relevant and fun discussion. Check it out!

Does studying economics make you more selfish?

by  Tyler Cowen in

Maybe not:

It is widely held that studying economics makes you more selfish and politically conservative. We use a difference-in-differences strategy to disentangle the causal impact of economics education from selection effects. We estimate the effect of four different intermediate microeconomics courses on students’ experimentally elicited social preferences and beliefs about others, and policy opinions. We find no discernible effect of studying economics (whatever the course content) on self-interest or beliefs about others’ self-interest. Results on policy preferences also point to little effect, except that economics may make students somewhat less opposed to highly restrictive immigration policies.

That is from a newly published paper by Daniele Girardi, Sai Madhurika Mamunuru, Simon D. Halliday, and Samuel Bowles.  This is a good example of a myth that got started with relatively little basis in fact.  At the very least it now has to be filed under “unconfirmed, likely false.”  Via Stefan Schubert.

Those who graduate from college late in life

by  Tyler Cowen in

It is generally agreed upon that most individuals who acquire a college degree do so in their early 20s. Despite this consensus, we show that in the US from the 1930 birth cohort onwards a large fraction – around 20% – of college graduates obtained their degree after age 30. We explore the implications of this phenomenon. First, we show that these so-called late bloomers have significantly contributed to the narrowing of gender and racial gaps in the college share, despite the general widening of the racial gap. Second, late bloomers are responsible for more than half of the increase in the aggregate college share from 1960 onwards. Finally, we show that the returns to having a college degree vary depending on the age at graduation. Ignoring the existence of late bloomers therefore leads to a significant underestimation of the returns to college education for those finishing college in their early 20s.

That is from a new NBER paper by Zsófia L. Bárány, Moshe Buchinsky, and Pauline Corblet.

The hypocrisy at the core of America’s elite universities

by  Tyler Cowen in

That is the title of my latest Bloomberg column, the piece is best read as a whole.  Nonetheless here is one excerpt:

As someone who stands to the political right of most of my fellow university faculty and administrators, I have no qualms accepting the argument that colleges and universities need to grow wealthier. That can mean tolerating various inequalities in the short run, because in the longer run academia will produce more innovation that benefits virtually everyone, including the poor.

This is not the kind of argument many on the political left find appealing. In tax policy, for example, such reasoning — the idea that short-run inequality can bring longer-run benefits — is often derided as “trickle-down economics.” And yet virtually any fan of the Ivies has to embrace this idea. The best defense of the admissions policies of America’s most prestigious universities is a right-leaning argument that they are deeply uncomfortable with.

So instead they tie themselves into knots to give the impression that they are open and egalitarian. To boost their image, minimize lawsuits and perhaps assuage their own feelings of institutional guilt, America’s top schools adopt what are known as DEI policies, to promote diversity, equity and inclusion.

The “inclusion” part of that equation is hardest for them to defend. Top-tier universities accept only a small percentage of applicants — below 4% at Stanford last year, for example. How inclusive can such institutions be? Everyone knows that these schools are elitist at heart, and that they (either directly or indirectly) encourage their students and faculty to take pride at belonging to such a selective institution. Most of all, the paying parents are encouraged to be proud as well. Who exactly is being fooled here?

And to close:

I thus have the luxury of opposing the new anti-legacy-admissions bill for two mutually reinforcing reasons. First, it reflects an unjustified expansion of federal powers over higher education. Even if you are anti-legacy, or want to rein in the Ivy League, you may not be happy about how those federal powers will be used the next time around.

Second, I do not mind a world where America’s top schools practice and implicitly endorse trickle-down economics. Someone has to carry the banner forward, and perhaps someday this Trojan horse will prove decisive in intellectual battle. In the meantime, I have my cudgel — hypocrisy among the educational elite — and I, too, can feel better about myself.

Recommended.

That was then, this is now

by  Tyler Cowen in

…the first German pogroms of the modern age, the so-called Hep-Hep riots, took place in 1819.  Jews were attacked on the streets and Jewish stores were ransacked.  It was a new and as yet unknown phenomenon in the German-speaking lands.  The riots were led by students, ostensibly the anti-absolutist and progressive force in German society.

That is from Shlomo Avineri’s Herzl’s Vision: Theodor Herzl and the Foundation of the Jewish State.  Here is a new bulletin from MIT.

Returns to Education for Women in the Mid-20th Century: Evidence from Compulsory Schooling Laws

by  Tyler Cowen in

Abstract: Women had a similar level of schooling to men during the mid-twentieth century United States, but research on the returns to education for women is scarce. Using compulsory schooling laws as instrumental variables, this paper examines the causal effect of education on women’s labor market and marriage market outcomes. I examine both outcomes because women frequently traded off employment and marriage due to marriage bars and gender norms against married women working. I show that an additional year of schooling increases women’s probability of gainful employment by 7.9 pp. and women’s wage earnings by 15 percent, which can be explained by women’s entry into skilled occupations. Given the large returns on earnings, education surprisingly does not increase women’s probability of never marrying, but it does increase the probability of divorce and separation. In addition, women’s education positively affects the husband’s and the household’s labor supply and earnings, conditional on marriage formation and the husband’s education.

That is from Sophie Li, who is on the job market from Boston University.  Her actual job market paper is: “The Effect of a Woman-Friendly Occupation on Employment: U.S. Postmasters Before WWII .”  Some of you will wince to hear me say this, but many of the most interesting job market papers this year are on the economics of gender.