Category: Uncategorized
Those new service sector jobs
Who needs to be a programmer, be hired to close the doors on Waymo vehicles:
Or see here. And more text from TechCrunch. Via Glenn Mercer, Tom McCarthy, and also Air Genius Gary Leff.
The import of cross-task productivity
Given that LLMs seem to be able to automate so many small tasks, why don’t we see large productivity effects?
I drafted a short paper recently exploring the possibility that it’s for the same reason (or at least one of the reasons) that labor is typically bundled into multi-task jobs, instead of transacted by the task, in the first place: because performing a task increases one’s productivity not only at the task itself but at related tasks.
For example, say you used to spend half your time coding and half your time debugging, and the LLM can automate the coding but you still have to do the debugging. If you’re more productive at debugging code you write yourself, this (1) explains why “coder” and “debugger” aren’t separate jobs, and (2) predicts that the LLM won’t save half your time. If you’re half as productive at debugging code you didn’t write, or less, the LLM saves you no time at all.
So I was excited to see @judyhshen and @alextamkin’s paper from a week or two ago finding basically just that!
At least the way I’m thinking about it, “cross-task learning” should make the productivity impacts of automating tasks more convex: – Automating the second half of a job should be expected to have much more of an impact than automating the first half; and – If the machines can learn from their and each others’ experience, as a worker learns by doing from her own experience, then automating two jobs will have more than twice the impact of automating one.
That is from Philip Trammell. Here is his short piece. Here is the Shen and Tamkin paper. This is all very important work for why the AI growth take-off will be much slower than the power of the models themselves might otherwise indicate. The phrase “…and then all at once” nonetheless applies. But when?
These short pieces and observations are likely among the most important outputs economists will produce this year. But are they being suitably rewarded?
Oliver Kim reviews *How Africa Works*
That is the new book by Joe Studwell, my podcast with him should be coming out pretty soon. Here is Oliver’s new review. Excerpt:
Botswana is Studwell’s poster child for a successful democratic developmental coalition. (For this reason, it featured heavily in Acemoglu and Robinson’s Why Nations Fail as an example of “inclusive institutions”.)
Under the sound leadership of Seretse Khama, local chiefs were carefully co-opted at independence and the Botswana Democratic Party built up into a genuine national force. Khama also created a capable civil service, initially staffed by remaining Europeans, but gradually Africanized with sterling Batswana talent. This meant that when diamonds were discovered just around independence, the windfall was carefully managed, avoiding the worst effects of Dutch Disease. These mining revenues helped raise Botswana to upper middle-income status, making it the fourth-richest country in continental Africa.
Botswana’s chief failing, in Studwell’s view, was adhering too much to responsible policy orthodoxy—i.e., not enough industrial policy. There was no vision for large-scale industrialization, no coherent plan to create large numbers of factory jobs. Moreover, the political dominance of large cattle owners (Botswana was a society of pastoralists rather than farmers) meant that redistribution was never in the cards. The result is a relatively rich society, but one that is highly unequal.
You will be hearing my views on these issues soon enough. Oliver, of course, writes one of the very best Substacks in all of economics.
Optimal timing for superintelligence
There is a new paper by Nick Bostrom with that title:
Developing superintelligence is not like playing Russian roulette; it is more like undergoing risky surgery for a condition that will otherwise prove fatal. We examine optimal timing from a person-affecting stance (and set aside simulation hypotheses and other arcane considerations). Models incorporating safety progress, temporal discounting, quality-of-life differentials, and concave QALY utilities suggest that even high catastrophe probabilities are often worth accepting. Prioritarian weighting further shortens timelines. For many parameter settings, the optimal strategy would involve moving quickly to AGI capability, then pausing briefly before full deployment: swift to harbor, slow to berth. But poorly implemented pauses could do more harm than good.
Via Nabeel.
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.