Category: Uncategorized
Thursday assorted links
1. Using Claude Code for academic work.
2. Younger Firms and CEOs Allow More Work from Home.
3. Extractive taxes were indeed a major force behind the French Revolution.
4. How much will “the human touch” persist?
5. “It was one attempt to do so, by Charles Jones of Stanford University, that entertained the negative top rate of -26%. If high earners produce a lot of ideas that help society, then “subsidising the discovery of new ideas through low tax rates may be as effective as redistribution in raising worker welfare”, he writes.” (The Economist)
6. Moral intuitions about love, romance, and reproduction are not Coasean.
7. Do not exercise options unless you have to!
The economics of mass deportation
Following the removal of 50% of unauthorized immigrants, in the short run average native real wages rise 0.15% nationally, driven by an increase in the capital-labor ratio. In the long run, however, native real wages fall in every state, and by 0.33% nationally, as capital gets decumulated in response to a lower population. Consumer prices in the sectors intensive in unauthorized workers – such as Farming – rise by about 1% relative to the price of the average consumption basket, while most other sectors experience negligible relative price changes.
That research result is from
Past Automation and Future A.I.: How Weak Links Tame the Growth Explosion
From Charles I. Jones and Christopher Tonetti:
How muchof past economic growth is due to automation, and what does this imply about the effects of A.I. and automation in the coming decades? We perform growth accounting using a task-based model for key sectors in the U.S. economy. Historically, TFP growth is largely due to improvements in capital productivity. The annual growth rate of capital productivity is at least 5pp larger than the sum of labor and factor-neutral productivity growth. The main benefit of automation is that we use rapidly-improving machines instead of slowly-improving humans on anincreasing set of tasks. Looking to the future, we develop an endogenous growth model in which the production of both goods and ideas is endogenously automated. We calibrate this model based on our historical evidence. Two key findings emerge. First, automation leads economic growth to accelerate over the next 75 years. Second, the acceleration is remarkably slow. By 2040, output is only 4% higher than it would have been without the growth acceleration, and by 2060 the gain is still only 19%. A key reason for the slow acceleration is the prominence of “weak links” (an elasticity of substitution among tasks less than one). Even when most tasks are automated by rapidly improving capital, output is constrained by the tasks performed by slowly-improving labor.
And an important sentence from the paper itself:
…, the key gain from automation is that it allows production of a task to shift away from slowly-improving human labor to rapidly-improving machines.
The authors stress that those are preliminary results, and the numbers are likely to change. For the pointer I thank the excellent Kurtis Hingl, who is also my research assistant.
*The Almighty Dollar*
The author is Brendan Greeley, and the subtitle is 500 Years of the World’s Most Powerful Money. A very well-timed book, excellent on the history of the dollar as it spans the centuries, I was happy to write a blurb for it.
Wednesday assorted links
1. The rise of the Saudi-UAE split.
2. How Peru came the leading exporter of blueberries.
3. One view on how to respond to AI potentially taking your job.
4. Austin Steady rates books mentioned on MR.
5. 36 hours in Lagos (NYT).
6. Why economists linearize everything.
My New Jersey history podcast with “Exit Interviews”
Exit Interviews is a new podcast run by David Piegaro. I am honored to be one of the first few guests, along with Chris Christie. Think of this session as “Tyler Cowen as regional thinker.” Almost 100% fresh material, not to mention some trolling directed at Central and South Jersey, Philly too. Here is my episode.
Definitely recommended, and let us hope that David Remnick gets on soon to defend the honor of River Vale vs. Hillsdale in Bergen County…
Immigration and health for elderly Americans
We measure the impact of increased immigration on mortality among elderly Americans, who rely on the immigrant-intensive health and long-term care sectors. Using a shift-share approach we find a strong impact of immigration on the size of the immigrant care workforce: admitting 1,000 new immigrants would lead to 142 new foreign healthcare workers, without evidence of crowd out of native health care workers. We also find striking effects on mortality: a 25% increase in the steady state flow of immigrants to the US would result in 5,000 fewer deaths nationwide. We identify reduced use of nursing homes as a key mechanism driving this result.
That is from a new NBER working paper by
My simple model of fertility decline
My core model is both simple and depressing. Fertility rates have declined around the world because birth control technologies became much better and easier to use. And people — women in particular — just do not want that many kids.
I do understand that better birth control happened a long time ago, for instance birth control pills become widely available in the wealthier countries in the 1960s, or sometimes the 1970s. Nonetheless the diffusion of new technologies can be very slow, and for norms to shift it can take generational turnover or even a bit more. Plus “fertility contagion effects” take a long time to work their way fully through the system.
Those long lags may be difficult to swallow, but social science has numerous examples of very long operative mechanisms. (Just think of how long it took potential migrants to exploit open borders, for instance pre-WWI.) Furthermore, fertility rates have indeed been falling for a long time in the wealthier countries.
So a lot of women, once they face the realities of the stress and trying to make ends meet, want only one kid. You end up with a large number of one kid families, some people who never marry/procreate at all, and a modest percentage of families with 2-4 kids. There are also plenty of cases cases where the guy leaves, self-destructs, or never marries, after siring a single child with a woman. That gives you the fertility rates we are seeing, albeit with cultural and economic variation.
Richard Hanania considers why income is not the driving force behind the decline, and why the decline is continuing.
Part of this model is that many women just love having a child. They love “children” so much that a single child fills up their needs and desires.
I see a similar mechanism in my own life. I very much enjoy having Spinoza around the house, but I have zero desire to take in another canine. Whenever I want more “dog attention,” I can assure you that the supply is highly elastic. Similarly, a single kid can take up a lot of your time and affection, again supply is elastic from the side of the kid. Maybe parents learning how much they can enjoy a single kid has been another cultural lag?
Under my preference-driven model, fertility declines are very difficult to reverse. I believe that is also consistent with the evidence to date.
So this is a problem we need to worry about. The asymptote is rather unpleasant, and the path along the way involve less human well-being, possibly less innovation, and maybe some major fiscal crises as well.
As Arnold Kling would say, “Have a nice day.”
Tuesday assorted links
1. Becca Rothfeld and Jordan Salama joining The New Yorker.
2. Discord will be requiring a face scan or ID for full access. I wonder what induced that change?
3. Meta-study showing that the returns to education are not so high.
4. Is she the most important philosopher in the world? (WSJ)
5. Do not exercise options unless you have to!
The politics of using AI
Using new data from the Gallup Workforce Panel, we document a persistent partisan gap in self-reported AI use at work: Democrats are consistently more likely than Republicans to report frequent use. In 2025:Q4, for example, 27.8% of Democrats report using AI weekly or daily, compared with 22.5% of Republicans. Democrats also report deeper task-level integration, using AI in 16% more work activities than Republicans. Consistent with this, Democrats are employed in occupations with higher predicted AI exposure based on task-content measures and report larger perceived differences in AI-related job displacement risk. However, in regression models the partisan gap in AI use disappears once we control for education, industry, and occupation, indicating that observed differences primarily reflect compositional variation rather than political affiliation per se.
That is from a new paper by Nicholas Bloom and Christos Makridis.
Poverty reduction is slowing down
The basic reason why I’m not very optimistic about Africa’s growth prospects under current conditions is that the track record is extremely poor, and there’s little reason to think that anything fundamental has changed. Between 1992 and 2022, median income in China grew at an average annualized rate of 6.6 percent per year; in India it grew at a rate of 2.9 percent per year; but in sub-Saharan Africa it grew at just 1.6 percent per year, less than the rate of growth exhibited in the famously stagnant (and much wealthier) United Kingdom. But in much of the continent the picture has been worse than mere slow growth. Some countries that were relatively stable a few decades ago are now in a state of apparently permanent civil conflict, as in the Democratic Republic of the Congo (DRC) or Somalia; while other countries that have been blessed by relative stability, such as Kenya, Malawi, or Zambia, are poorer on a median income basis than they were in the ‘80s or ‘90s.
There are many things to say about why economic growth in Africa has been so disappointing, from the primacy of extractive resource sectors to the dominance of predatory elites to the poor state of human capital to the ubiquity of corruption to the absence, in many places, of a strong state monopoly on legitimate violence. But these are merely surface-level problems: the fact that these conditions exist in nearly every country in Africa, despite their widely varying historical experiences and the different ideologies with which their states have experimented, suggests that the fundamental problem is not so much with the state but the society underlying the state. If you were to describe this problem briefly, you could do quite well with something like “kinship groups crowd out effective institutions.” African societies have extraordinarily strong kinship ties, such that impersonal institutions and relationships are systematically subordinated to family, clan, and ethnic loyalties; as a result many African societies have found it extraordinarily difficult to build effective states and civil societies that are capable of doing what states and civil societies are supposed to do. (For a more complete elaboration of this view, see my article on why African nations don’t have large firms.) Solving that problem took Europe roughly a millennium; and that was when people didn’t have access to AK-47s.
Here is more from David Oks.
For a long time I have been predicting the return of phrenology
Yup:
Human capital—encompassing cognitive skills and personality traits—is central for labor-market success, yet personality remains difficult to measure at scale. Leveraging advances in AI and comprehensive LinkedIn microdata, we extract the Big 5 personality traits from facial images of 96,000 MBA graduates, and demonstrate that this novel “Photo Big 5” predicts school rank, job matching, compensation, job transitions, and career advancement. The Photo Big 5 provides predictive power comparable to race, attractiveness, and educational background, and is only weakly correlated with cognitive measures such as test scores. We show that individuals systematically sort into occupations where their personality traits are valued and earn higher wages when traits align with occupational demands. While the scalability of the Photo Big 5 enables new academic insights into the role of personality in labor markets, its growing use in industry screening raises important ethical concerns regarding statistical discrimination and individual autonomy.
That is from a new NBER working paper by
Monday assorted links
1. The Southern Cone Thesis (speculative).
2. Ranking potato chips (NYT). Kettle, says I.
3. Henry Oliver visits Shenandoah.
4. Context is that which is scarce.
5. Seb Krier all the way down.
6. What a city on the moon plan might look like, and its problems.
Why is Singapore no longer “cool”?
To be clear, I am not blaming Singapore on this one. But it is striking to me how much Americans do not talk about Singapore any more. They are much, much more likely to talk about Europe or England, for instance. I see several reasons for this:
1. Much of the Singapore fascination came from the right-wing, as the country offered (according to some) a right-wing version of what a technocracy could look like. Yet today’s American political right is not very interested in technocracy.
2. Singapore willingly takes in large numbers of immigrants (in percentage terms), and tries to make that recipe work through a careful balancing act. That approach still is popular with segments of the right-wing intelligentsia, but it is hardly on the agenda today. For the time being, it is viewed as something “better not to talk about.” Especially in light of some of the burgeoning anti-Asian sentiment, for instance from Helen Andrews and some others. It is much more common that Americans talk about foreign countries mismanaging their immigration policies, for instance the UK and Sweden.
3. Singaporean government looks and feels a bit like a “deep state.” I consider that terminology misleading as applied to Singapore, but still it makes it harder for many people to praise the place.
4. Singapore is a much more democratic country than most outsiders realize, though they do have an extreme form of gerrymandering. Whatever you think of their system, these days it no longer feels transgressive, compared to alternatives being put into practice or at least being discussed. Those alternatives range from more gerrymandering (USA) to various abrogations of democracy (potentially all over). In this regard Singapore, without budging much on its own terms, seems like much more of a mainstream country than before. That means there is less to talk about.
4b. Singapore’s free speech restrictions, whatever you think of them, no longer seem so far outside the box. Trump is suing plenty of people. The UK is sending police to knock on people’s doors for social media posts, and so on. That too makes Singapore more of a “normal country,” for better or worse (I would say worse).
5. The notion of an FDI-driven, MNE-driven growth strategy seems less exciting in an era of major tech advances, most of all AI. Singapore seems further from the frontier than a few years ago. People are wishing to talk about pending changes, not predictability, with predictability being a central feature of many Singaporean service exports.
6. If you want to talk about unusual, well-run small countries, UAE is these days a more novel case to consider, with more new news coming out of it.
Sorry Singapore, we are just not talking about you so much right now! But perhaps, in some significant ways, that is a blessing in disguise. At least temporarily. I wrote this post in part because I realize I have not much blogged about Singapore for some years, and I was trying to figure out why.
Addendum, from Ricardo in the comments:
Bryan Caplan on immigration backlash
Tyler tries to cure my immigration backlash confusion, but not to my satisfaction. The overarching flaw: He equivocates between two different versions of “backlash to immigration.”
Version 1: Letting in more immigrants leads to more resistance to immigration.
Version 2: Letting in more immigrants leads to so much resistance to immigration that the total stock of immigration ultimately ends ups lower than it would have been.
Backlash in the first sense is common, but no reason for immigration advocates to moderate. Backlash in the second sense is a solid reason for immigration advocates to moderate, but Tyler provides little evidence that backlash in this sense is a real phenomenon.
Do read the whole thing, but I feel I am obviously right here. Bryan should read newspapers more! If I did not provide much evidence that backlash is a significant phenomenon, it is because I thought it was pretty obvious. A few points:
1. I (and Bryan all the more so) want more immigration than most voters want. But I recognize that if you strongly deny voters their preferences, they will turn to bad politicians to limit migration. So politics should respect voter preferences to a reasonable degree, even though at the margin people such as myself will prefer more immigration, and also better immigration rules and systems.
2. The anti-immigrant politicians who get elected are very often toxic. And across a wide variety of issues. The backlash costs range far wider than just immigration policies. (I do recognize this does not apply in every case, for instance Meloni in Italy seems OK enough and is not a destructive force. She also has not succeeded in limiting migration, and probably cannot do so without becoming toxic. So maybe that story is not over yet. In any case, consider how many of the other populist right groups have a significant pro-Russia element, Russia being right now probably the most evil country in the world.)
3. If immigration runs “out of control” (as voters perceive it) in your country, there will be anti-immigrant backlash in other countries too. For instance in Japan and Poland. Bryan considers only backlash in the single country of origin. In Japan, for instance, voters just handed their PM a new and powerful mandate, in large part because of the immigration issue. The message was “what is happening in other countries, we do not want that happening here.” The globalization of communications and debate increases the scope and power of the backlash effect considerably.
Most of all, it is simply a mistake to let populist right parties become the dominant force in Europe, and sometimes elsewhere as well. You might think it is not a mistake because we need them to limit migration. Well, that is not my view, but I am arguing it is a mistake to get to that margin to begin with.
In short, we need to limit migration to prevent various democracies from going askew. Nothing in that argument contradicts the usual economic (and other) arguments for a lot of immigration being a good thing. And still it is a good thing to try to sell one’s fellow citizens on the case for more immigration. Nonetheless we are optimizing subject to a constraint, namely voter opinion. Why start off an intertemporal bargaining game by trying to seize as much surplus (immigration) as possible? That to me is obvious, more obvious every day I might add.