2. NIMBY isn’t just CA: “Philly’s 43,000 vacant lots face a fresh political battle.”
3. The new economics of Chinatowns: “Chinese restaurant jobs tend not to be in places with a high concentration of Chinese immigrants, but rather in places with a high proportion of non-Hispanic whites. In addition, the farther the jobs are from New York City, the higher the salary.”
4. MIE: Board game about alpacas.
5. IQ predicts how you vote in Denmark (multi-party system) but not America. But note this: “In both countries, higher ability predicts left-wing social and right-wing economic views.”
Or U.S.A. fact of the day:
Over the past three years, the percentage of 6- to 12-year-olds playing soccer regularly has dropped nearly 14 percent, to 2.3 million players, according to a study by the Sports & Fitness Industry Association, which has analyzed youth athletic trends for 40 years. The number of children who touched a soccer ball even once during the year, in organized play or otherwise, also has fallen significantly.
…In general, participation in youth sports nationwide has declined in the past decade, as children gravitate to electronic diversions and other distractions…
“It’s lost more child participants than any other sport — about 600,000 of them,” said Tom Farrey, executive director of the Aspen Institute Sports & Society Program.
That is from Joe Drape at the NYT.
I see this claim in my Twitter feed pretty often, but I don’t get how it is supposed to run. Let’s try an analogy with the non-human animal kingdom.
Right now there are many cows in the world, and even more potential cows to be bred, or cows in low-value situations that could be moved around by boat or even helicopter, if need be. Call it the “moo reserve army of the unemployed.” If the market as a whole increased its demand for cows, the price of cows would go up. It would not make sense to say “that happens only when all the cows are busy all the time and there are no extra cows or potential cows left.” Very likely, there is an upward-sloping cost curve for mobilizing more cows.
To be sure, under a constant cost assumption, the price of cows would not go up, following an increase in demand. The quantity of eligible, working cows would rise, stifling upward price pressure, and possibly this would take the form of a Malthusian equilibrium. But note: in this situation you should expect the price of cows never to go up, as the cost structure is preventing that.
Alternatively, you might think that demand for cows and the cost structure for cow expansions interact in some very particular way. If you pinned this down in just the right manner, you could model a situation where an increase in demand for cows won’t boost the price of cows now, but in broader situations the price of cows can sustainably rise. Indeed that is possible, I just don’t see particular reason to believe that such a convoluted construction is doing most of the explanatory work for current labor markets.
I look at it this way: measured wages for male labor near the median haven’t gone up much in decades, and this is poorly understood (you may or may not think the same is true for actual real wages, and for women the story is somewhat more complicated). So if measured wages for non-supervisors are not going up much now, that is hardly a huge shock. The fact that we don’t understand it well doesn’t mean some remaining particular hypothesis — in this case about the size of reserve armies — has to be the true one.
Most cow parables, upon closer examination, collapse into structural explanations anyway. And in labor markets, it is almost always both blades of the scissors that matter.
Addendum: You might try a matching model. Imagine that potential workers are fully passive, stoned so to speak, but will accept credible good offers from well-capitalized employers. The cost structure of the workers, or worker search, does not influence the outcome. Over the course of the recovery, employers invest more in searching for the right workers because their profits are higher and they make a successively greater number of offers to well-suited workers, but at constant wages. The number of employed keeps on rising, wages stay flat, but longer-run wages nonetheless may rise with productivity (and with enough bids for their labor, workers move out of passive strategies). I’m not saying this is a good representation, only that it might capture the claimed mix of flat wages and a large reserve pool of labor, yet without forcing wages into a longer-run flatness. It also suggests, by the way, that some measure of monopoly/high profits has been good for social welfare, as it has boosted employment.
Yes, I am continuing to read David Edgerton’s The Rise and Fall of the British Nation: A Twentieth Century History, and it is one of the must-read non-fiction books of this year. Here are a few points I gleaned from my time spent with the book on the plane last evening:
1. During WWII, British imports kept to their pre-war levels, with imports of munitions picking up the slack. The book stresses how much the British empire did in fact pay off, as Britain through a variety of mechanisms forced or induced its colonies to lend it resources during this critical time. Along some dimensions, the British economy became more global due to the conflict.
2. In 1942, exports from Malaya (mostly rubber) to the U.S. were higher than UK exports to the U.S. at that time.
3. Early in the 20th century, wheat in Great Britain was about ten times more expensive than coal. Britain was the largest importer of food, and in essence sold coal for foodstuffs.
4. British coal was centered in rural areas, and this kept British country life economically vital. Furthermore this mining was largely horse-powered.
5. From the end of WWII to the 1980s, more people left Britain than migrated to it.
6. Goods trade as a percentage of gdp was about 32% for Britain around 1920, and then lower at about 20% in 2000.
I hope to write about this book more, but I’ll tell you two of the overall messages right now. One is that the history of British economic globalization is more lurching and back and forth than you might think. Another is that British industry was more successful, innovative, and scientific during periods of supposed decline than you might think.
And by the way, while we are on the topic of must-read books, here is another rave review for Varlam Shalamov.
1. “We find that ridesharing services resulted in a two percent decline in the overall demand for new cars, and that the impact varied by product segment. The entry-level compact segment was affected the most, with sales declining by almost eight percent…” (see p.53)
3. “All employees (not just entry level employees) should strive to have at least 70% of their time doing things that are really difficult.” From Auren Hofmann. While the number seems a little high to me, the point is an important one nonetheless.
4. Michiko Kakutani By the Book (NYT).
1. I don’t give enough links about Staten Island, this one concerns turning a garbage dump into a park.
5. Is college debt shifting to parents? (NYT)
Simplifiers give one a better overall picture of how the world works, whereas constructors are trying to build something. The balance seems to be shifting, for instance in physics:
Within the Physics label…we find the simplifiers dominated three quarters of the Nobel Prizes from 1952 to 1981, but more recently constructors have edged the balance with more than half of those from 1982 to 2011.
There is also a shift toward constructors in chemistry, though it is less abrupt. In the fields of physiology and medicine, however, simplifiers reign supreme and there has been no shift across time. Three-quarters of the prizes are still going to simplifiers.
Does that mean we should be relatively bullish about progress in those areas, based on forthcoming fundamental breakthroughs?
All these points are from Jeremy J. Baumberg’s new and interesting The Secret Life of Science: How It Really Works and Why It Matters.
1. Gaël Faye, Small Country. Short, readable, and emotionally complex, one of my favorite novels so far this year. Think Burundi, spillover from genocide, descent into madness, and “the eyes of a child caught in the maelstrom of history.” Toss in a bit of romance as well.
2. David Edgerton, The Rise and Fall of the British Nation: A Twentieth Century History. I’m only on p.34, but this one is spectacular and I expect to read it closely all the way through. You’ll probably hear about it more in future blog posts. He takes on many myths about British postwar decline, for instance, arguing that British business actually did pretty well in the 1950s and 60s. Right now it is out only in the UK, but the above link still will get you a copy. Here is a good Colin Kidd review in New Statesman: “Every so often a book comes along that the entire political class needs to read.”
3. Karl Ove Knausgaard, Inadvertent (Why I Write). 92 short pp. on how he thinks about writing, consistently high in quality, the contrast between Kundera and Hamsun was my favorite part.
Laurence M. Ball, The Fed and Lehman Brothers: Setting the Record Straight on a Financial Disaster is a very serious and useful book. The Fed could have saved Lehman Brothers and didn’t, partly because of political pressures, and partly because they underestimated the damage it would cause to the economy. Ball documents what I have supposed from the time of the event.
Cass R. Sunstein, The Cost-Benefit Revolution. Not since the 1970s has cost-benefit analysis been as underrated as it is right now.
Joy Lisi Rankin, A People’s History of Computing in the United States appears to be interesting. It tries to liberate the history of American computing from the usual emphasis on Silicon Valley, and offers greater focus on Dartmouth, Minnesota, and other less studied locales.
5. You can now subscribe to MR by email, it is here on the site.
It is difficult to express just how good these Gulag short stories are. I would very literally second the blurb by David Bezmozgis:
“As a record of the Gulag and human nature laid bare, Varlam Shalamov is the equal of Solzhenitsyn and Nadezhda Mandelstam, while the artistry of his stories recalls Chekhov. This is literature of the first rank, to be read as much for pleasure as a caution against the perils of totalitarianism.”
That is not blurb inflation. Note that the book is long (734 pp. of stories), and the reading is slow, mostly because the narratives lack redundant information, not because they are clumsy or awkwardly written. It also takes perhaps a few stories to get into the swing of things and figure out how the fictional yet not fictional universe works here. But the content is entirely gripping, and full of social science. You can buy it here. A second volume from this translator will appear in 2019, completing the series.
Have you ever wondered how the contemporary world would react if a masterpiece were dropped into its midst? If your guess was “with a fair amount of indifference unless it was Elena Ferrante and even then it wouldn’t really change anything except give rise to probably what will be a mediocre television series”…well, you were right. For Shalamov, I don’t yet see an Amazon review.
From David Card, Ciprian Domnisoru, and Lowell Taylor, the last few sentences are the most interesting:
We use 1940 Census data to study the intergenerational transmission of human capital for children born in the 1920s and educated during an era of expanding but unequally distributed public school resources. Looking at the gains in educational attainment between parents and children, we document lower average mobility rates for blacks than whites, but wide variation across states and counties for both races. We show that schooling choices of white children were highly responsive to the quality of local schools, with bigger effects for the children of less-educated parents. We then narrow our focus to black families in the South, where state-wide minimum teacher salary laws created sharp differences in teacher wages between adjacent counties. These differences had large impacts on schooling attainment, suggesting an important causal role for school quality in mediating upward mobility.
This result is not logically inconsistent with the signalling model, but I think it fits more readily into the human capital story. If you think employers cannot easily distinguish between different qualities of worker (without the educational signal, that is), probably you also should think employers cannot distinguish among the quality of adjacent schools on the basis of what they pay their teachers in relative terms. And in that case, the schools hiring the better teachers are probably increasing the productivity of their students.
For the pointer I thank the excellent Samir Varma.
It’s that commitment to policing immigration that has, paradoxically, sustained such high levels of support…
As for illegal and irregular immigration, Canadian governments from both ends of the political spectrum have worked—quietly—to ensure there is as little of it as possible. The unspoken underpinning of Canada’s otherwise welcoming immigration policy is a giant and assiduously maintained border wall…
Despite Canada’s open-door reputation, the country has some of the world’s most restrictive visa rules. A World Economic Forum survey of travel and tourism professionals ranked Canada among the worst in the world—120th out of 136 countries—for the restrictiveness of its visitor visa requirements. It’s a quiet but effective means of preempting irregular immigration.
That is from Tony Keller, the piece has other points of interest, such as how border-jumping from the U.S. is a major factor causing the Canadian immigration consensus to fray. And don’t forget this:
Since the late 1980s, Canada has consistently been a high-immigration country, at least relative to the U.S. As a result, the proportion of Canadians born outside the country hit 21.9 percent in 2016. That same year, America’s foreign-born population was 13.4 percent. That’s a record high for the U.S.—but it’s been 115 years since Canada’s foreign-born population was at such a low level.
Under one simple model here, people need to feel in control before they will entertain further liberalization.
By Michael Lovenheim and Alexander Willén:
Teacher collective bargaining is a highly debated feature of the education system in the US. This paper presents the first analysis of the effect of teacher collective bargaining laws on long-run labor market and educational attainment outcomes, exploiting the timing of passage of duty-tobargain laws across cohorts within states and across states over time. Using American Community Survey data linked to each respondent’s state of birth, we examine labor market outcomes and educational attainment for 35-49 year olds, separately by gender. We find robust evidence that exposure to teacher collective bargaining laws worsens the future labor market outcomes of men: in the first 10 years after passage of a duty-to-bargain law, male earnings decline by $2,134 (or 3.93%) per year and hours worked decrease by 0.42 hours per week. The earnings estimates for men indicate that teacher collective bargaining reduces earnings by $213.8 billion in the US annually. We also find evidence of lower male employment rates, which is driven by lower labor force participation. Exposure to collective bargaining laws leads to reductions in the skill levels of the occupations into which male workers sort as well. Effects are largest among black and Hispanic men. Estimates among women are often confounded by secular trend variation, though we do find suggestive evidence of negative impacts among nonwhite women. Using data from the 1979 National Longitudinal Survey of Youth, we demonstrate that collective bargaining laws lead to reductions in measured non-cognitive skills among young men.
1. “As the interminable lines at DMV offices grow longer and timely appointments become nearly impossible to schedule, an Oakland startup offering “expedited appointments” for $19.99 has seen its business boom.” Link here.
3. Are you Chinese but spiritually Finnish? #jingfen
That is the topic of my latest Bloomberg column, here is one bit from it:
There is evidence that American attitudes toward immigrants are growing more positive. There is also evidence that simply thinking about immigrants makes Americans less likely to support them, so Democrats may decide to de-emphasize the issue. The intensity of anti-immigration sentiment has helped Republicans take control of all three branches of the federal government, and Democrats would probably prefer for the next big set of political debates to be about health-care policy and additional benefits for women. The American public actually trusts Trump more than congressional Democrats to deal with border security.
There is much more at the link, not all of it pleasant.