Category: Education
Letters of recommendation
We analyze 6,400 letters of recommendation for more than 2,200 economics and finance Ph.D. graduates from 2018 to 2021. Letter text varies significantly by field of interest, with significantly less positive and shorter letters for Macroeconomics and Finance candidates. Letters for female and Black or Hispanic job candidates are weaker in some dimensions, while letters for Asian candidates are notably less positive overall. We introduce a new measure of letter quality capturing candidates that are recommended to “top” departments. Female, Asian, and Black or Hispanic candidates are all less likely to be recommended to top academic departments, even after controlling for other letter characteristics. Finally, we examine early career outcomes and find that letter characteristics, especially a “top” recommendation have meaningful effects on initial job placements and journal publications.
That is from a new paper by Beverly Hirtle and Anna Kovner. Via the excellent Kevin Lewis.
The Economic Way of Thinking in a Pandemic
During the pandemic, economists often found themselves at odds with politicians, physicians, epidemiologists and others. Some politicians, for example, were worried that the pharma companies might engage in profiteering while economists worried that the pharma companies were not nearly profitable enough. Physicians focused on maximizing the health of patients while economists focused on maximizing the health of society–during the pandemic these were not the same and this led to disputes over testing, first doses first and human challenge trials. During the pandemic economists were often accused of not staying in their lane. But what is the economist’s lane?
In this talk, I discuss the economic way of thinking and how it conflicted with other ways of thinking. My talk pairs well with my recent paper also titled The Economic Way of Thinking in a Pandemic.
My excellent Conversation with Tom Tugendhat
Here is the audio, video, and transcript. Here is the episode summary:
Tom Tugendhat has served as a Member of Parliament since 2015, holding roles such as Security Minister and chair of the Foreign Affairs Select Committee. Before entering Parliament, Tom served in in Iraq and Afghanistan. He also worked for the Foreign Office, helped establish the National Security Council of Afghanistan, and served as military assistant and principal adviser to the Chief of the Defense Staff.
Tyler and Tom examine the evolving landscape of governance and leadership in the UK today, touching on the challenges of managing London under the UK’s centralized system, why England remains economically unbalanced, his most controversial view on London’s architecture, whether YIMBYism in England can succeed, the unique politics and history of Kent, whether the system of private schools needs reform, his pick for the greatest unselected prime minister, whether Brexit revealed a defect in the parliamentary system, whether the House of Lords should be abolished, why the British monarchy continues to captivate the world, devolution in Scotland and Northern Ireland, how learning Arabic in Yemen affected his life trajectory, his read on the Middle East and Russia, the Tom Tugendhat production function, his pitch for why a talented young person should work in the British Civil Service, and more.
And here is an excerpt:
COWEN: Okay. First question, what is your favorite walk around London, and what does it show about the city that outsiders might not understand?
TUGENDHAT: Oh, my favorite walk is down the river. A lot of people walk down the river. One of the best things about walking down the river in London is, first of all, it shows two things. One, that London is actually an incredibly private place. You can be completely on your own in the center of one of the biggest cities in the world within seconds, just by walking down the river. Very often, even in the middle of the day, there’s nobody there. You walk past things that are just extraordinary. You walk past a customs house. It’s not used anymore, but it was the customs house for 300, 400, 500 years. You walk past, obviously, the Tower of London. You walk past Tower Bridge. You walk past many things like that.
Actually, you’re walking past a lot of modern London as well, and you see the reality of London, which is — the truth is, London isn’t a single city. It’s many, many different villages, all cobbled together in various different ways. I think outsiders miss the fact that there’s a real intimacy to London that you miss if all you’re doing is you’re going on the Tube, or if you’re going on the bus. If you walk down that river, you see a very, very different kind of London. You see real communities and real smaller communities.
And:
COWEN: Can the British system of government in its current parliamentary form — how well can that work without broadly liberal individualistic foundations in public opinion?
TUGENDHAT: I think it works extremely well at ensuring that truly liberal foundations are maintained. I mean that not in the American sense; I mean in a genuine, the old liberal tradition that emerges from the UK in the 1700s, 1800s, where freedom of thought, freedom of assembly, the right to own property, and all those principles that then became embedded in various different constitutions around the world, including your own. I think it does very well at doing that because it forces you, our system forces you, into partnership. There are 650 people who you have to work with in some way in Parliament over the next four or five years.
And there’s four of us currently going for leadership at the Conservative Party. There’s one reason why, despite the fact that we’re competing almost in a US primary system, the way in which we are dealing with each other is very different, is because we’re all going to have to work together for the next four years. Whoever wins is going to have to work with the other three, and the idea that you can simply ignore each other isn’t true. There’s only 121 of us Conservative MPs in Parliament, and what this system forces on us is the need to deal with each other in a way that you have to deal with somebody if you’re going to deal with them tomorrow. I think that’s one of the reasons why the British political system has endured because it forces you to remember that there’s a long-term interest, not an immediate one, not just a short-term one.
Recommended, highly intelligent throughout, including on China, Russia, and Yemen.
Further evidence for the babysitting theory of education
Bryan Caplan will feel vindicated:
This paper asks whether universal pre-kindergarten (UPK) raises parents’ earnings and how much these earnings effects matter for evaluating the economic returns to UPK programs. Using a randomized lottery design, we estimate the effects of enrolling in a full-day UPK program in New Haven, Connecticut on parents’ labor market outcomes as well as educational expenditures and children’s academic performance. During children’s pre-kindergarten years, UPK enrollment increases weekly childcare coverage by 11 hours. Enrollment has limited impacts on children’s academic outcomes between kindergarten and 8th grade, likely due to a combination of rapid effect fadeout and substitution away from other programs of similar quality but with shorter days. In contrast, parents work more hours, and their earnings increase by 21.7%. Parents’ earnings gains persist for at least six years after the end of pre-kindergarten. Excluding impacts on children, each dollar of net government expenditure yields $5.51 in after-tax benefits for families, almost entirely from parents’ earnings gains. This return is large compared to other labor market policies. Conversely, excluding earnings gains for parents, each dollar of net government expenditure yields only $0.46 to $1.32 in benefits, lower than many other education and children’s health interventions. We conclude that the economic returns to investing in UPK are high, largely because of full-day UPK’s effectiveness as an active labor market policy.
Here is more from Note by the way that these externalities end up internalized in higher wages for the parents, so at least in this data set there is no obvious case for public provision of a subsidized alternative.
A country run by schoolteachers?
One disgruntled veteran at a FF annual meeting in 2016 was heard to complain, ‘They’re all fucking schoolteachers now.’ He was partly right. In the thirtieth Dáil in 2007 there were 3 university lecturers, 14 primary school teachers and 14 secondary school teachers; there were also 16 lawyers, 5 doctors, 3 nurses and 14 farmers; 22 TDs described themselves as business people and 26 ‘now qualify for the bus pass’; 31 were the children of former TDs. By 2011, the number of TDs from a business background had only increased from 22 to 25, while the number of primary and secondary teachers was 30, making teaching still the largest profession represented in the Dáil, although the number of TDs who were offspring of former TDs was reduced to 15.
That is from the new and highly useful Diarmaid Ferriter book The Revelation of Ireland 1995-2020.
My Conversation with the excellent Kyla Scanlon
Here is the audio, video, and transcript. Here is the episode summary:
Kyla Scanlon has made it her personal mission to bring economics education to a larger audience through social media. She publishes daily content across TikTok, YouTube, Substack, LinkedIn and more, explaining what is happening in the economy and why it is happening. Tyler calls her first book In This Economy? How Money & Markets Really Work a “good and bracing shock to those who have trained their memories on some weighted average of the more distant past.”
Tyler and Kyla dive into the modern state of economics education and a whole range of topics like if fantasy world building can help you understand economics, what she learned trading options at 16, why she opted for a state school over the Ivy League, lessons from selling 38 cars over summer break, introversion as an ingredient for social media success, if she believes in any conspiracy theories, Instagram scrolling vs TikTok scrolling, the decline of print culture, why people are seeking out cults, modern nihilism, how perspective can help with optimism, the death of celebrity and the rise of influencers, why econ education has gone backward, improving mainstream media, YIMBYism and real estate, nuclear pragmatism versus utopian geothermalists, investing advice for young people, why she thinks about the Great Depression more than Rome, creating the next Free to Choose, and more.
Excerpt:
COWEN: Putting aside your own work, what kind of economics do you think young people are learning from TikTok?
SCANLON: [laughs] Concerning.
COWEN: Is it conspiratorial? Is it leaning in some particular direction?
SCANLON: I would say it’s definitely conspiratorial. There’s a lot of desire to pin inflation onto companies, which I don’t know if that’s the best thing to do. There’s a lot of desire to have a scapegoat. I think a lot of people are frustrated with their economic situation, and so they look at TikTok videos, and somebody is telling them that, yes, Blackrock is conspiring against them, and that’s very soothing. I think that’s where we have ended up with TikTok and econ.
And this:
COWEN: Yes, in a way, they’re making a deal with you. They promise to listen and give you numbers, and you promise to let them abuse you. That’s the exchange. That’s what they want.
SCANLON: Yes, exactly.
COWEN: It’s the right to selectively abuse.
Definitely recommended. And here is the earlier David Beckworth podcast with Kyla.
Model this
Doctors were given cases to diagnose, with half getting GPT-4 access to help. The control group got 73% right & the GPT-4 group 77%. No big difference.
But GPT-4 alone got 92%. The doctors didn’t want to listen to the AI.
Here is more from Ethan Mollick. And now the tweet is reposted with (minor) clarifications:
A preview of the coming problem of working with AI when it starts to match or exceed human capability: Doctors were given cases to diagnose, with half getting GPT-4 access to help. The control group got 73% score in diagnostic accuracy (a measure of diagnostic reasoning) & the GPT-4 group 77%. No big difference. But GPT-4 alone got 88%. The doctors didn’t change their opinions when working with AI.
New MRU Video! Negative Externalities
Here’s the latest video from Marginal Revolution University. It covers negative externalities–drawing, of course, from the most innovative and interesting principles of economics textbook, Modern Principles of Economics.
MRU videos are free for anyone’s use anytime, anywhere and don’t forget there are also two new econ-practice games on negative externalities and positive externalities and a fun choose your own adventure story on Unintended Consequences (most textbooks just teach when regulation works. We are more balanced.)
How tenure should be granted, circa 2024
Not just on the basis of what you publish, but on what you contribute to the major AI models. So if you go to a major archive and, in some manner, turn it into AI-readable form, that should count for a good deal. It is no worse than publishing a significant article, though of course depending on the quality of the archive. As it stands today, you basically would get no credit for that. You would instead be expected to turn the archive into articles or a book, even if that meant unearthing far less data for the AIs. Turning data into books takes a long time — is that always what humans should be doing?
Articles still count under this standard, as jstor seems to be in the literary “diet” of the major AI models. Wikipedia contributions should count for tenure, and any “hard for the AI to access data set” should count for all the more. Soon it won’t much matter whether humans read your data contribution, as long as the AIs do.
So we’re all going to do this, right? After all, “how much you really contribute to science” is obviously the standard we use, right? Right?
Is assortative mating by education declining?
Recent social and economic trends in the United States, including increasing economic inequality, women’s growing educational advantage, and the rise of online dating, have ambiguous implications for patterns of educational homogamy. In this research note, we examine changes in educational assortative mating in the United States over the last eight decades (1940 to 2020) using the U.S. decennial censuses and the American Community Survey, extending and expanding earlier work by Schwartz and Mare. We find that the rise in educational homogamy noted by Schwartz and Mare has not continued. Increases in educational homogamy stalled around 1990 and began reversing in the 2000s. We find a growing tendency for marriages to cross educational boundaries, but a college degree remains the strongest dividing line to intermarriage. A key trend explaining this new pattern is women’s increasing tendency to marry men with less education than themselves. If not for this trend, homogamy would have continued increasing until the early 2010s. We also show substantial heterogeneity by race, ethnicity, and nativity and among same- versus different-sex couples.
That is from a new paper by Noah Hirschl, Christine R. Schwartz, and Elia Boschetti, via the excellent Kevin Lewis.
Ian Leslie on Olivier Roy and culture
Roy argues that culture in the sense we have understood it is being inexorably eroded. It’s not, as some of his countrymen believe, that one culture is being replaced by another – say, Christianity by Islam. It’s that all culture is being hollowed out by technology, data, globalisation, bureaucracy, and consumerist individualism. Local cultures, in the sense of finely patterned, shared sensibilities, automatically absorbed and deeply felt, are no match for these bulldozing, ‘deculturating’ forces.
We still need shared norms of behaviour in order to function as societies, however. So in place of implicit culture, he says, we have introduced explicit “norms”: rules of behaviour and speech which aren’t felt or intuited but articulated, coded for, and argued over endlessly. Without instinctive standards for behaviour we have to thrash everything out, from the correct use of pronouns to how to behave on public transport or dress for work. “Culture war” implies some kind of profound division between people, but in truth, suggests Roy, our differences are shallow and petty and all the more bad-tempered for it. Scrape away culture and what you’re left with is negotiation. Everything is politics.
Complex, evolved, layered social identities are being replaced by a series of boxes, with freedom consisting of the right to choose your box at any one time (think about the way that sexual identity is coded into an endlessly multiplying series of letters). The oddly shaped flora and fauna of culture have been reduced a series of “tokens” which we buy and display in order to position ourselves versus others. National cuisines, musical genres, styles of dress: these are all just tokens for us to collect and artfully assemble into a personal brand.
Here is the full essay. Here is my earlier post on Roy’s book.
Sometimes people are just wrong
The puzzle was that, despite M1 growth in excess of 5 percent during 1970 and 10 percent during the first half of 1971, the engine still continued to sputter. At the June 1971 meeting of the FOMC, the Fed’s chief economist admitted bafflement. “Why is it that the very high recent growth rates of money…fail to produce a satisfactory real performance?” asked Charles Partee.
At the same time, Milton Friedman was writing Arthur Burns and telling him he was “appalled” by the high rates of money growth.
That is from the quite interesting 1998 book Allen J. Matusow, Nixon’s Economy: Booms, Busts, Dollars, and Votes.
I had not known that in 1971, for a while, President Nixon was pushing for a uniform ten percent tax on imports into the United States, and indeed he imposed it temporarily. That was then, this is now…
Sweden fact of the day
However, following the start of PhD studies, the use of psychiatric medication among PhD students increases substantially. This upward trend continues throughout the course of PhD studies, with estimates showing a 40 percent increase by the fifth year compared to pre-PhD levels. After the fifth year, which represents the average duration of PhD studies in our sample, we observe a notable decrease in the utilization of psychiatric medication.
Here is the article, via Jesse. Here are some relevant tweets. It doesn’t have to be causal to be interesting!
My Conversation with the excellent Tobi Lütke
Here is the audio, video, and transcript. Here is the episode summary:
Tyler and Tobi hop from Germany to Canada to America to discuss a range of topics like how outsiders make good coders, learning in meetings by saying wrong things, having one-on-ones with your kids, the positives of venting, German craftsmanship vs. American agility, why German schooling made him miserable, why there aren’t more German tech giants, untranslatable words, the dividing line of between Northern and Southern Germany, why other countries shouldn’t compare themselves to the US, Canada’s lack of exports and brands, ice skating to work in Ottawa, how VR and AI will change retailing, why he expects to be “terribly embarrassed” when looking back at companies in the 2020s, why The Lean Startup is bad for retailers, how fantasy novels teach business principles, what he’s learning next, and more.
Excerpt:
COWEN: Are Canadians different in meetings than US Americans?
LÜTKE: Yes, as well. Yes, that’s true. It’s more on the side of American, definitely on a minimum quality bar. I think Canadians are often more about long term. I’ve seen Canadians more often think about what’s the next step after this step, but also just low ambition. That’s probably not the most popular thing to say around here, but Canada’s problem, often culturally, is a go-for-bronze mentality, which apparently is not uncommon for smaller countries attached to significantly more cultural or just bigger countries.
Actually, I found it’s very easy to work around. I think a lot of our success has been due to just me and my co-founder basically allowing everyone to go for world class. Everyone’s like, “Oh, well, if we are allowed to do this, then let’s go.” I think that makes a big difference. Ratcheting up ambition for a project is something that one has to do in a company in Canada.
COWEN: Is there something scarce that is needed to inject that into Canada and Canadians? Or is it simply a matter of someone showing up and doing it, and then it just all falls out and happens?
LÜTKE: I don’t know. Inasmuch as Shopify may be seen as something that succeeded, that alone didn’t do it. It would’ve been very, very nice if that would’ve happened. Now there’s another cohort of founders coming through. Some of them have been part of Shopify or come back from — I believe there are some great companies in Calgary, like NEO, that are more ambitious.
I think it’s a bit of a decision. The time it worked perfectly was when Canada was hosting the Winter Olympics, which is now a little bit of ancient history. There was actually a program Canada-wide that’s called Own the Podium. That makes sense. It’s home. We have more winter than most, so therefore let’s do well. And then we did. It’s just by far the best performance of Canada’s Olympic team of all times. I think to systematize it and make it stick — changing a culture is very, very difficult, but instances of just giving everyone permission to go for it have also been super successful.
And this:
COWEN: Say we compare Germany to the Netherlands, which is culturally pretty similar, very close to Koblenz. They have ASML, Adyen. Netherlands is a smaller country. Why have they done relatively better? Or you could cite Sweden, again, culturally not so distant from Germany.
LÜTKE: You’re asking very good questions that I much rather would ask you. [laughs] I don’t know. I wish I knew. I started at a small company in Germany; it didn’t do anything. So, it’s not like people didn’t do this. I came to Canada, again, this time it worked. Then I was head down for a very long time, building my thing because it was all-consuming, so I didn’t pay too much attention to — I wasn’t even very deliberate about where to start a company. I started in Ottawa because that’s where my wife and I were during the time she was studying there. We could find great talent there that was overlooked, it seemed, and gave everyone a project to be ambitious with, and it worked.
I think that if you create in geography a consensus that you’re a company really, really worth working for because it’s interesting work, great work, it might actually lead to something — then you can build it. I don’t quite understand why this is not possible to do in so many places in Germany because, again, Germany does have this wonderful appreciation of craftsmanship, which I think is actually underrepresented in software. I think it’s only recently — usually by Europeans — being brought up. Patrick Collison talks about it more and more, and certainly I do, too.
Making software is a craft. I think, in this way, Germany, Czech Republic, other places, Poland, are extremely enlightened in making this part of an apprenticeship system. I apprenticed as a computer programmer, and I thought it was exactly the right way to learn these things. Now, that means there’s, I believe, a lot of talent that then makes decisions other than putting it together to build ambitious startups. Something needs to be uncorked by the people who have more insight than I have.
COWEN: I think part of a hypothesis is that the Netherlands, and also Sweden, are somewhat happier countries than Germany. People smile more. At least superficially, they’re more optimistic. They’re more outgoing.
LÜTKE: I think it’s optimism.
COWEN: It’s striking to me that Germans, contrary to stereotype — I think they have a quite good sense of humor, but a lot of it is irony or somewhat black. Maybe that’s bad for tech. I wonder: people in the Bay Area — do they have a great sense of humor? I’m not sure they do. Maybe there’s some correlations across those variables.
Definitely recommended. Can you guess which is the one question Tobi refused to answer, for fear of being cancelled?
How to persuade to YIMBY?
Recent research finds that most people want lower housing prices but, contrary to expert consensus, do not believe that more supply would lower prices. This study tests the effects of four informational interventions on Americans’ beliefs about housing markets and associated policy preferences and political actions (writing to state lawmakers). Several of the interventions significantly and positively affected economic understanding and support for land-use liberalization, with standardized effect sizes of 0.15 − 0.3. The most impactful treatment—an educational video from an advocacy group—had effects 2-3 times larger than typical economics-information or political-messaging treatments. Learning about housing markets increased support for development among homeowners as much as renters, contrary to the “homevoter hypothesis.” The treatments did not significantly affect the probability of writing to lawmakers, but an off-plan analysis suggests that the advocacy video increased the number of messages asking for more market-rate housing.
Here is more from Christopher S. Elmendorf, Clayton Nall, and Stan Oklobdzija. Here is the video.