Category: Political Science

Wealth by Generation and Age

Kurt Andersen made the following arresting tweet

Fraction of all US wealth owned by Boomers & Gen-Xers when the average member of each was age 35:

Boomers, 1989 21%
GenX, 2008 8%
The average Millennial turns 35 in 2023. Right now they own 3%.

There will surely be political implications.

Definitions: Baby Boomer=born 1946-1964, Gen X=born 1965-1980, and Millennial=born 1981-1996.

You can’t take it with you, so this will change eventually but perhaps too late. Think of this as the Prince Charles effect. Prince Charles hasn’t offed his mother and led a revolution yet but in an earlier age he probably would have and surely he has thought about it. Similarly, perhaps the demand among some Gen-Xers and Millennials for wealth redistribution can be understood as a demand to get their share of the pot before they are old and tired.

The data, which are from the Federal Reserve are here.

My Conversation with Mark Zuckerberg and Patrick Collison

Facebook tweets:.

@patrickc, CEO of Stripe, and @tylercowen, economist at George Mason University, sit down with our CEO, Mark Zuckerberg to discuss how to accelerate progress.

Video, audio, and transcript here, part of Mark’s personal challenge for the year, an excellent event all around.  This will also end up as part of CWT.

Do social media drive the rise in right-wing populism?

Abstract: Many observers are concerned that echo chamber effects in digital media are contributing to the polarization of publics and in some places to the rise of right-wing populism. This study employs survey data collected in France, the United Kingdom, and United States (1500 respondents in each country) from April to May 2017. Overall, we do not find evidence that online/social media explain support for right-wing populist candidates and parties. Instead, in the USA, use of online media decreases support for right-wing populism. Looking specifically at echo chambers measures, we find offline discussion with those who are similar in race, ethnicity, and class positively correlates with support for populist candidates and parties in the UK and France. The findings challenge claims about the role of social media and the rise of populism.

That is from a new paper by Shelley Boulianne, Karolina Koc-Michalska, and Bruce Bimber, via somebody on Twitter.

Garett Jones on open borders

I am very pleased that the new Bryan Caplan and Zach Weinersmith open borders graphic novel has hit #1 on The Washington Post non-fiction bestseller list.  I am also pleased to see Garett Jones examine the idea in a new short paper, here is part of his critique:

I use the same constant returns to scale framework as Caplan, in which the migration of every human being to the United States would increase global output per capita by about 80%. I then estimate that in the benchmark model, where IQ’s social return is much larger than its private return, the per-capita income of current U.S.residents would permanently fall by about 40%. This is not an arithmetic fallacy: this is the average causal effect of Open Borders on the incomes of ex-ante Americans. This income decline occurs because cognitive skills matter mostly through externalities: because your nation’s IQ matters so much more than your own, as I claim in 2015’s Hive Mind. Therefore, a decline in a nation’s set of average cognitive skills will tend to reduce the productivity of the nation’s ex-ante citizens.

I will be sure to link to Bryan’s reply when it comes.

The racial integration of the Korean War

The racial integration of the US Army during the Korean War (1950-1953) is one of the largest and swiftest desegregation episodes in American history. This paper argues that racial integration improved white survival rates at the expense of blacks, and resulted in less anti-black prejudice among white veterans decades after the war. Using a novel military casualty file, I construct a wartime similarity index to measure the extent of racial integration across military units and time. Using exogenous changes in racial integration, I show that integrated whites were 3% more likely to survive their injuries than segregated whites, whereas integrated blacks were 2% were less likely to survive their injuries than segregated blacks. Given that blacks were initially confined to noncombat support roles, the results reflect a convergence in hazardous combat assignments. To explore the long-term effects of racial integration, I link individual soldiers to post-war social security and cemetery data using an unsupervised learning algorithm. With these matched samples, I show that a standard deviation change in the wartime racial integration caused white veterans to live in more racially diverse neighborhoods and marry non-white spouses. In aggregate, these results are some of the first and only examples of large-scale interracial contact reducing prejudice on a long-term basis.

That is from the job market paper from Daniel Indacochea of the University of Toronto.

Don’t put the state capital too far away sorry Albany but Austin is fine

In this paper I exploit a novel and rich data-set with biographical information of US state legislators to investigate their sorting based on remoteness and attractiveness of the state capital. The main finding of the chapter is that in more remote US state capitals the legislators are on average less educated and experienced. The results are robust to using different measures of remoteness, based on the spatial distribution of the population, and controlling for other characteristics of the legislatures. To identify the causal effect of capitals’ remoteness, I use instrumental variables relying on proximity of capitals to the state centroids. Finally, I also find that legislators’ education affects public good provision and corruption.

That is the abstract of the job market paper of Giuseppe Rossitti from the London School of Economics.

Did the medieval church make us WEIRD?

A growing body of research suggests that populations around the globe vary substantially along several important psychological dimensions and that populations characterized as Western, Educated, Industrialized, Rich, and Democratic (WEIRD) are particularly unusual. People from these societies tend to be more individualistic, independent, and impersonally prosocial (e.g., trusting of strangers) while revealing less conformity and in-group loyalty. Although these patterns are now well documented, few efforts have sought to explain them. Here, we propose that the Western Church (i.e., the branch of Christianity that evolved into the Roman Catholic Church) transformed European kinship structures during the Middle Ages and that this transformation was a key factor behind a shift towards a WEIRDer psychology.

That is a new piece in Science by Jonathan F. Schulz, Duman Bahrani-Rad, Jonathan P. Beauchamp, and Joe Henrich, try this link tooThis one works for sure.  Here is Harvard magazine coverage of the piece.  Here is a relevant Twitter thread.

The two Jonathan co-authors are new colleagues of mine at GMU economics, so I am especially excited this work is seeing the light of day in such a good venue.

Revisiting NSA Spying

In 2013 in light of the Snowden revelations about NSA spying I wrote, Did Obama Spy on Mitt Romney?

Did Obama spy on Mitt Romney? As recently as a few weeks ago if anyone had asked me that question I would have consigned them to a right (or left) wing loony bin. Today, the only loonies are those who think the question unreasonable. Indeed, in one sense the answer is clearly yes. Do I think Obama ordered the NSA to spy on Romney for political gain? No. Some people claim that President Obama didn’t even know about the full extent of NSA spying. Indeed, I imagine that President Obama was almost as surprised as the rest of us when he first discovered that we live in a mass surveillance state in which billions of emails, phone calls, facebook metadata and other data are being collected.

The answer is yes, however, if we mean did the NSA spy on political candidates like Mitt Romney. Did Mitt Romney ever speak with Angela Merkel, whose phone the NSA bugged, or any one of the dozens of her advisers that the NSA was also bugging? Did Romney exchange emails with Mexican President Felipe Calderon? Were any of Romney’s emails, photos, texts or other metadata hoovered up by the NSA’s break-in to the Google and Yahoo communications links? Almost certainly the answer is yes.

As I read the situation, mass government surveillance has now become accepted in America, as in China. This bit remains relevant:

Did the NSA use the information they gathered on Mitt Romney and other political candidates for political purposes? Probably not. Will the next president or the one after that be so virtuous so as to not use this kind of power? I have grave doubts. Men are not angels.

Learning is Caring: An Agrarian Origin of American Individualism

I am looking forward to reading this one, from Itzchak Tzachi Raz, who is on the job market from Harvard this year:

This study examines the historical origins of American individualism. I test the hypothesis that local heterogeneity of the physical environment limited the ability of farmers on the American frontier to learn from their successful neighbors, turning them into self-reliant and individualistic people. Consistent with this hypothesis, I find that current residents of counties with higher agrarian heterogeneity are more culturally individualistic, less religious, and have weaker family ties. They are also more likely to support economically progressive policies, to have positive attitudes toward immigrants, and to identify with the Democratic Party. Similarly, counties with higher environmental heterogeneity had higher taxes and a higher provision of public institutions during the 19th century. This pattern is consistent with the substitutability of formal and informal institutions as means to solve collective action problems, and with the association between “communal” values and conservative policies. These findings also suggest that, while understudied, social learning is an important determinant of individualism.

Here is the home page, the paper is not yet available.  Here is his actual job market paper, on adverse possession.  I do hope the author lets me know once this paper is ready, I am very much looking forward to reading it.

Public employee pension and municipal insolvency

This paper studies how governments manage public employee pensions and how this affects insolvency risk. I propose a quantitative model of governments that choose their savings and risk exposure by borrowing/saving in defaultable bonds, borrowing in non-defaultable pension benefits, and saving in a pension fund that earns a risk premium. In insolvency, the government can receive transfers from households who may differ from the government in their preferences for public services and private consumption. I match the model to a panel of CA cities and a hand-collected record of fiscal emergencies. The model predicts that governments are highly vulnerable to another stock market bust. A hypothetical shock to pension funds in 2015 produces twice as many fiscal emergencies as the original 2008-10 shock. In the quantified model, the government undersaves and take excess risk relative to what households would choose. Savings requirements that limit spending to essential services plus 0.3% of cash-on-hand produce large welfare gains for households. Requiring the pension fund to invest more in safe assets decreases household welfare because the lower average return discourages the government from saving.

That is from the job market paper by Sean Myers of Stanford University.

You silly, silly people…

Using difference-in-difference and regression discontinuity techniques, we find that US states governed by Democrats and those by Republicans perform equally well on economic, education, crime, family, social, environmental, and health outcomes on the timeline introduced by elections (2-4 years downstream).

That is from a new paper by Adam Dynes and John B. Holbein, forthcoming in APSR.

How to think about the Chilean (and other) protests

That is the topic of my latest Bloomberg column, here is one excerpt:

Second, a protest against poor conditions is not the same as a protest against inequality. Many Chilean complaints revolve around the pension system, health care, water rights, public transportation, schools and corruption. Are Chileans upset that their transport options aren’t better? That’s a complaint in absolute terms. Or are they upset that they are riding the subway while many of the wealthy have private cars with drivers? That’s a relative complaint.

The answer will depend on the protester, and in virtually all protests around the world there will be those with both motives. But some North American commentators try to equate these two grudges and subsume them all under the heading of inequality. That just won’t wash.

And don’t forget this:

In the case of Chile, it has the highest real wages in Latin America, income inequality has mostly been falling, and life expectancy is above average for the region. By Latin American standards Chile has a low rate of crime and a high degree of public order. Chile has had open and honest elections, and peaceful transfers of power, since 1990.

So high expectations may be more relevant than either “inequality” or “neo-liberalism” per se, at least for many of the protestors.  There is much more of interest at the link, including some speculations as to why Chile may be different:

Another observation: Income inequality is often more galling when different economic classes encounter each other on a regular basis. So much Chilean economic and social activity is concentrated in Santiago, just as in South Korea it is in Seoul and in Singapore it is in … Singapore. In all three countries, I believe, feelings of inequality and envy are worse for that reason. By contrast, if you are a lower-middle-class person in, say, Mississippi, you may view the mansion and private plane of Bill Gates as if from a different universe.

I’ve also found Chile to have a relatively tough set of social expectations in terms of class, dress and educational background, and a relatively narrow set of expectations for women. These pressures for conformity may contribute to discontent.


The Mexican drug war and its intensification

Event study estimates suggest that cartel presence increases substantially after 2010 in municipalities well suited to grow opium poppy. Homicide rates increase along with the number of active cartels per municipality, with higher increases when a second, third, fourth and fifth cartel become active in the territory. These results suggest that some of the increase in violence that Mexico experienced in the last fifteen years could be attribute to criminal groups fighting for market shares of heroin and not only to changes in government enforcement.

That is from a recent job market paper by Fernanda Sobrino of Princeton University.

The McConnell-Trump impeachment game

That is the topic of my latest Bloomberg column, here is one key excerpt:

A second factor, however, pushes in the opposite direction. If Trump is viewed as too corrupt, too poisonous or too unreliable by swing voters, some of these senators also run the risk of losing their jobs. These senators therefore wish to rein in Trump, if only for selfish reasons. Trump and his policies are not very popular, as illustrated by numerous polls. And some senators might decide that loyalty to country, and to the future of the world, also argues for constraining Trump.

Reining in Trump does not have to mean forcing the leopard to change its spots, which is probably impossible anyway. But it could mean nudging Trump to be less outrageous: Don’t respond to the Ukraine accusations by encouraging China to investigate Joe Biden’s son, for example. Be more careful in your dealings with Turkey and the Kurds. Refrain from calling Never Trump Republicans “human scum.”

OK, so now to take the next step: How can these senators possibly check Trump? The threat of impeachment is their most potent weapon…

The upshot is that McConnell’s power over the president is growing. These are exactly the kinds of wrist slaps Trump notices.

The question, of course, is how Trump will respond to critical signals from Republican senators. My guess is that he will not play a cooperative “tit for tat” strategy, trading signals in a rational manner to keep senators in line and proceeding toward an orderly resolution of the impeachment judgment from the House. Rather, the signals sent his way might enrage him or raise his stress level to the point where he behaves less rationally than usual. Then the Senate will have to work all the harder to constrain Trump, thereby upping the stakes — and the stress — once again.

We will see.

Facts about YouTube

From a new and very important paper by Kevin Munger and Joseph Phillips from Penn State:

The most extreme branches of the AIN (the Alt-Right and Alt-Lite) have been in decline since mid-2017.

However, the Alt-Right’s remaining audience is more engaged than any other audience, in terms of likes and comments per view on their videos.

The bulk of the growth in terms of both video production and viewership over the past two years has come from the entry of mainstream conservatives into the YouTube marketplace.

…despite considerable energy, Ribeiro et al. (2019) fail to demonstrate that the algorithm has a noteworthy effect on the audience for Alt-Right content.  A random walk algorithm beginning at an Alt-Lite video and taking 5 steps randomly selecting one of the ten recommended videos will only be recommended a video from the Alt-Right approximately one out every 1,700 trips.  For a random walker beginning at a “control” video from the mainstream media, the probability is so small that it is difficult to see on the graph, but it is certainly no more common than one out of every 10,000 trips.

That authors suggest (p.24) that if anything the data suggest deradicalization as a more plausible baseline hypothesis.

Of course this is not the final word, but in the meantime so much of what you are reading about YouTube would appear to be wrong or at least off-base.