That was then, this is now
Poland’s top politician said Thursday that the government will seek equivalent of some $1.3 trillion in reparations from Germany for the Nazis’ World War II invasion and occupation of his country…
“We will turn to Germany to open negotiations on the reparations,” Kaczynski said, adding it will be a “long and not an easy path” but “one day will bring success.”
He insisted the move would serve “true Polish-German reconciliation” that would be based on “truth.”
That is an article from today!
Thursday assorted links
1. Short breaks from surgery seem to improve surgeon performance.
2. How much do the French earn?
4. A big quantitative analysis of MR posts, including a complete list of guest bloggers, analysis of when the posts go up, and a treatment of whether daylight savings time matters. Can you guess who was our last guest blogger? The piece also covers where I link to the most.
5. The man who married a hologram in Japan can no longer communicate with his virtual wife.
6. Free short on-line course on economics of innovation and science, with top people.
Cost-Benefit Analysis of the TSA
A nice opening anecdote on life at the TSA from the Verge:
People cry at airports all the time. So when Jai Cooper heard sobbing from the back of the security line, it didn’t really faze her. As an officer of the Transportation Security Administration (TSA), she had gotten used to the strange behavior of passengers. Her job was to check people’s travel documents, not their emotional well-being.
But this particular group of tearful passengers presented her with a problem. One of them was in a wheelchair, bent over with her head between her knees, completely unresponsive. “Is she okay? Can she sit up?” Cooper asked, taking their boarding passes and IDs to check. “I need to see her face to identify her.”
“She can’t, she can’t, she can’t,” said the passenger who was pushing the wheelchair.
Soon, Cooper was joined at her station by a supervisor, followed by an assortment of EMTs and airport police officers. The passenger was dead. She and her family had arrived several hours prior, per the airport’s guidance for international flights, but she died sometime after check-in. Since they had her boarding pass in hand, the distraught family figured that they would still try to get her on the flight. Better that than leave her in a foreign country’s medical system, they figured.
The family might not have known it, but they had run into one of air travel’s many gray areas. Without a formal death certificate, the passenger could not be considered legally dead. And US law obligates airlines to accommodate their ticketed and checked-in passengers, even if they have “a physical or mental impairment that, on a permanent or temporary basis, substantially limits one or more major life activities.” In short: she could still fly. But not before her body got checked for contraband, weapons, or explosives. And since the TSA’s body scanners can only be used on people who can stand up, the corpse would have to be manually patted down.
“We’re just following TSA protocol,” Cooper explained.
Her colleagues checked the corpse according to the official pat-down process. With gloves on, they ran the palms of their hands over the collar, the abdomen, the inside of the waistband, and the lower legs. Then, they checked the body’s “sensitive areas” — the breasts, inner thighs, and buttocks — with “sufficient pressure to ensure detection.”
Only then was the corpse cleared to proceed into the secure part of the terminal.
Not even death can exempt you from TSA screening.
Later we get to the economics:
Actuaries measure the cost-effectiveness of an intervention — say, a pharmaceutical drug or a safety device like a seat belt — with a metric called “cost per life saved.” This calculation tries to capture the total societal net resources spent in order to save one year of life. For example, mandatory seat belt laws cost $138; railway crossing gates cost $90,000; and inpatient intensive care at a hospital can cost up to $1 million per visit. As long as an intervention costs less than $10 million per life saved, government agencies are generally happy to back them.
The most generous independent estimates of the cost-effectiveness of the TSA’s airport security screening put the cost per life saved at around $15 million. And that makes two big assumptions: first, that the agency is both 100 percent effective and 100 percent responsible for stopping all terror attacks; and second, that it stops an attack on the scale of 9/11 about once a decade. Less optimistic assessments place the number at $667 million per life saved.
China fact of the day
China’s carbon emissions fell almost 8 per cent in the April-to-June quarter compared with the same period last year, the sharpest decline in the past decade, according to climate research service Carbon Brief.
The fall in emissions reflects a dramatic slowing in Chinese economic growth caused by large-scale coronavirus lockdowns and a crisis in the heavily indebted property sector. It was the fourth consecutive quarter in which emissions have fallen in China, the world’s biggest emitter.
Lauri Myllyvirta, an analyst at the Helsinki-based Centre for Research on Energy and Clean Air, which compiled the data for Carbon Brief, said there had been a drop of 44 per cent in the number of construction projects started and a 33 per cent fall in those completed during the second quarter.
Here is more from the FT.
The Returns to College Admission for Academically Marginal Students
I combine a regression discontinuity design with rich data on academic and labor market outcomes for a large sample of Florida students to estimate the returns to college admission for academically marginal students. Students with grades just above a threshold for admissions eligibility at a large public university in Florida are much more likely to attend any university than below-threshold students. The marginal admission yields earnings gains of 22% between 8 and 14 years after high school completion. These gains outstrip the costs of college attendance, and they are largest for male students and free-lunch recipients.
Here is the Journal of Labor Economics piece by Seth D. Zimmerman. So is the non-statistically-summarized account of Susan Dynarski painting too negative a picture?
And do those people need debt forgiveness to the tune of hundreds of billions of dollars? Write down your social welfare function!
This piece by David J. Deming surveys the broader literature, and with broadly concordant results.
U.S.A. facts of the day
In 2021, the average American could expect to live until the age of 76, federal health researchers reported on Wednesday. The figure represents a loss of almost three years since 2019, when Americans could expect to live, on average, nearly 79 years.
The reduction has been particularly steep among Native Americans and Alaska Natives, the National Center for Health Statistics reported. Average life expectancy in those groups was shortened by four years in 2020 alone.
The cumulative decline since the pandemic started, more than six and a half years on average, has brought life expectancy to 65 among Native Americans and Alaska Natives — on par with the figure for all Americans in 1944.
Here is more from the NYT. Do note that Native Americans are generally considered to have done OK in terms of their vaccination rates.
Wednesday assorted links
1. Dan Klein on whether classical liberalism is anti-democratic.
2. France uses AI to find hidden swimming pools and then tax them.
3. Chris’s dating info/profile (29, male hetero, wants kids, nerdy).
4. Book of Vitalik’s writings is coming out.
The temporary popularity of Caplanian views on higher education
Bryan Caplan as you know argues that even the private return to higher education isn’t what it usually is cracked up to be, especially since large numbers of individuals do not finish with a four-year degree. Susan Dynarski (tenured at Harvard education, but an economist), writing in the NYT, seems to have started flirting with this view:
…a majority of people holding student debt have moderate incomes and low balances. Many have no degree, having dropped out of a public college or for-profit vocational school after a few semesters. They carry little debt, but they also do not get the benefit of a college degree to help them pay off that debt.
Defaults and financial distress are concentrated among the millions of students who drop out without a degree. The financial prospects for college dropouts are poor; they earn little more than do workers with no college education. Dropouts account for much of the increase in financial distress among student borrowers since the Great Recession.
And dropout is not at all rare. A bit less than half of college students don’t earn a bachelor’s degree. Some people earn a shorter, two-year associate degree. But more than a quarter of those who start college hoping to earn a degree drop out with no credential. A full 30 percent of first-generation freshmen drop out of four-year colleges within three years. That’s three times the dropout rate of students whose parents graduated from college.
I’ve seen modest variants on those numbers, but the general picture is broadly accepted. Now here is Dynarski’s Congressional testimony from last summer:
College is a Great Investment
A college education is a great investment. Over a lifetime, a person with a bachelor’s degree will earn, on average, a million dollars more than a less-educated worker. Even with record-high tuition prices, a BA pays for itself several times over.
She is quite clear in the former NYT piece that she has changed her mind, so there is no “gotcha” here. But clearly her views are evolving in Bryan’s direction.
In terms of policy, Dynarski notes that more than a quarter drop out of college with no credential. Shouldn’t we restrict loan forgiveness to them? Doesn’t that at least deserve discussion? Or should we just go ahead and grant forgiveness to those with the “great” returns as well? Her change of mind concerns the higher-than-expected problems of the non-finishers, not that she has seen new and inferior income numbers for the successes. (In fact since the numbers for the average return haven’t changed, being more pessimistic about the losers has to mean being a bit more optimistic about the successes. That should make us all the more interested in targeting the forgiveness.)
Why are we not allowed to know what percentage of the forgiveness beneficiaries fall into the “didn’t finish” category? What should we infer from the reality that no one is reporting that statistic? Is that good news or bad news for the policy?
What does Dynarski think is the marginal return from trying to finish college? Are they really so positive for the marginal student? What is the chance of the marginal student finishing? The cited figures are averages, presumably for the marginal student the chance of finishing is much worse. Presumably she is pessimistic about the nature of the college deal for the marginal student?
Now I know how these discussions run. Suddenly there is plenty of talk about how we should make it easier for people to finish, perhaps by offering more aid. As someone who teaches at a non-elite state university, I do understand what is going on with students who need to drop out to take care of family, and so on. Still, in the meantime should we be encouraging more marginal students to try their hand at college?
Yes or no?
That question runs against the prevailing mood affiliation and good luck trying to get a straight answer. In the meantime, the world is taking an ever-so-temporary foray into the views of Bryan Caplan. Let’s see how long it stays there.
What is the equilibrium in higher education policy?
That is the topic of my Bloomberg column, here goes:
Critics of the policy see it as rewarding Democratic supporters and interest groups, including university faculty and administrators but most of all students. This perception, regardless of whether it’s true, will influence political behavior…
Republicans, when they hold political power, are likely to strike back. They may be more interested in draining the sector of revenue. The simplest way of doing this would be to limit tuition hikes in state universities. De facto tuition caps are already common, but they may become tighter and more explicit, especially in red and purple states. Such policies might also prove popular with voters, especially during a time of high inflation.
A second set of reforms might limit the ability of public universities to spend money on hiring more administrators, including people who work on so-called DEI issues. Given the fungibility of funds, and the ability of administrators to retitle new positions, such restrictions may not be entirely enforceable. Still, they would mean less autonomy for public universities as policy in many states tried to counteract their current leftward swing.
Another possible reform could tie funding for a school or major to the future earnings of graduates. That likely would penalize the humanities, which already tend to be one of the more politicized segments of the modern university…
Longer-term, a future Republican administration might decide to restructure the entire system of federal student loans. How about making student loans dischargeable through normal bankruptcy proceedings? That might sound like a pretty unremarkable idea to most voters, and many economists, including Larry Summers, favor it. It would also allow for some measure of debt relief without extending it to the solvent and the well-off.
Still, the long-term consequences of this reform would probably lead to a significant contraction of lending. Most enrolled students do not in fact finish college, and many of them end up with low net worth yet tens of thousands of dollars of debt. (By one estimate, the net worth of the median American below age 35 is $13,900.) So the incentives to declare bankruptcy could be relatively high. This would make federal student loans a more costly and less appealing proposition. Private lenders would be more wary as well. Higher education would likely contract.
The net effect of the president’s loan-forgiveness initiative — which is an executive order and thus does not have an enduring legislative majority behind it — could amount to a one-time benefit for students, no impact on rising educational costs, and the intensification of the culture wars over higher education.
Sad but true.
Tuesday assorted links
1. An RCT restricting social media use. Never underrate the null hypothesis!
2. Indians guessing facts about America.
3. Emotional support alligator.
4. Real YIMBY progress in California.
5. “Nearly a quarter of tenure-track faculty have a parent with a PhD…”
The Price of Power and the Power of Prices
As Europe’s energy crisis intensifies we are seeing calls for price caps, rationing, and command and control.
What’s happening: A range of government-imposed restrictions, akin to the kind of restraints during wartime, here is a sampling.
In Germany:
- Cologne’s magnificent cathedral — normally lit throughout the night — now goes dark over night. Public buildings, museums and other landmarks — such as the Brandenburg Gate in Berlin — will no longer be illuminated overnight either.
- In Hanover last month, hot water was cut off at public buildings, as the city seeks to cut consumption by 15%.
- The southern city of Augsburg decided to turn off traffic lights.
Spain:
- Congress agreed to temperature limitations — air conditioning no cooler than 27 degrees Celsius, or nearly 81 degrees Fahrenheit.
- After 10 p.m. shop windows and unoccupied public buildings won’t be lit.
Italy:
- Air conditioning in schools and public buildings has already been limited in what the government labeled “Operation Thermostat,” starting in May.
France:
- Shopkeepers will now be fined for keeping doors open and air conditioning running, a common practice.
- Illuminated signs will be banned between 1 a.m. and 6 a.m.
The Economist, however, reminds us of the power of prices. Namely, price caps can backfire but price increases can be combined with cash transfers can protect vulnerable consumers while maintaining strong incentives to reduce consumption and find substitutes:
How households respond to enormous price shocks has rarely been studied, owing to a lack of real-world data. One exception is that produced by Ukraine, which Anna Alberini of the University of Maryland and co-authors have studied, looking at price rises in 2015 after subsidies were cut. They found that among households that did not invest in better heating or insulation a doubling of prices led to a 16% decline in consumption.
Policies to help households cope with high prices have also been studied—and the results are bad news for politicians capping prices. In California, where a government programme cut the marginal price of gas for poor households by 20%, households raised their consumption by 8.5% over the next year to 18 months. Ukraine has found a better way to help. Households struggling to pay their bills can apply for a cash transfer. Since such a transfer is unrelated to consumption, it preserves the incentive for shorter showers, and thus does not blunt the effect of high prices on gas use. Another option is a halfway house between a price cap and a transfer. An Austrian state recently introduced a discount on the first 80% of a typical household’s consumption, which means people retain an incentive to cut back on anything over that.
…Households are not the only consumers of gas. Early in the war, manufacturers and agricultural producers argued against doing anything that might risk supplies, since production processes took time to alter and output losses could cascade through the economy. But initial evidence from the German dairy and fertiliser industries suggests that even heavy users respond to higher prices. Farmers have switched from gas to oil heating; ammonia, fertiliser’s gas-intensive ingredient, is now imported instead of being made locally.
Over time, households and industry will adapt more to higher prices, meaning that with every passing month demand for gas will fall.
The power of prices reminds us that carbon taxes can be effective at surprising low cost if we give them a chance to operate.
India forecast of the day
India is likely to be the fastest-growing Asian economy in the Asian region in 2022-23, according to analysts at Morgan Stanley, who expect the expect India’s gross domestic product (GDP) growth to average 7 per cent during this period – the strongest among the largest economies – and contributing 28 per cent and 22 per cent to Asian and global growth, respectively. The Indian economy, they said, is set for its best run in over a decade, as pent-up demand is being unleashed.
Here is further detail. How many other countries can expect to average even five percent growth over the next decade? Bangladesh? A few of the smaller nations in West Africa? Who else? Possibly Indonesia? It is hard not to be (relatively) optimistic about India, economically speaking at least.
The wisdom of Garett Jones
Of course this Bloomberg column was inspired by Garett’s work, not to mention Paleo-Caplanianism! Here is one excerpt, with the focus being on the annoying tendency to label various policies “anti-democratic”:
The danger is that “stuff I agree with” will increasingly be labeled as “democratic,” while anything someone opposes will be called “anti-democratic.” Democracy thus comes to be seen as a way to enact a series of personal preferences rather than a (mostly) beneficial impersonal mechanism for making collective decisions…
It is also harmful to call the Dobbs decision anti-democratic when what you’re really arguing for is greater involvement by the federal government in abortion policy — a defensible view. No one says the Swiss government is “anti-democratic” because it puts so many decisions (for better or worse) into the hands of the cantons. And pointing out that many US state governments are not as democratic as you might prefer does not overturn this logic.
It would be more honest, and more accurate, simply to note that court put the decision into the hands of (imperfectly) democratic state governments, and that you disagree with the decisions of those governments.
By conflating “what’s right” with “what’s democratic,” you may end up fooling yourself about the popularity of your own views. If you attribute the failure of your views to prevail to “non-democratic” or “anti-democratic” forces, you might conclude the world simply needs more majoritarianism, more referenda, more voting.
Those may or may not be correct conclusions. But they should be judged empirically, rather than following from people’s idiosyncratic terminology about what they mean by “democracy” — and, by extension, “anti-democratic.”
I am worried about some of the increasing polarization on this issue. If you are on “the Left,” and you think various social and policy trends are so immoral, how is it exactly that you avoid becoming yourself “anti-democratic”? Even though at the same time you are cursing everything you don’t like as “anti-democratic” too?
The Distributional Effects of Student Loan Forgiveness
Even worse than you thought:
We study the distributional consequences of student debt forgiveness in present value terms, accounting for differences in repayment behavior across the earnings distribution. Full or partial forgiveness is regressive because high earners took larger loans, but also because, for low earners, balances greatly overstate present values. Consequently, forgiveness would benefit the top decile as much as the bottom three deciles combined. Blacks and Hispanics would also benefit substantially less than balances suggest. Enrolling households who would benefit from income-driven repayment is the least expensive and most progressive policy we consider.
That is from a working paper by Sylvaine Catherine and Constantine Yanellis. It is sad that such material even needs to be posted. I hope you are not taken in by Dube-ous ideas to the contrary!