Saturday assorted links
1. Tiny robots made from human cells heal damaged tissue.
2. Is the gender confidence gap contagious to evaluators?
3. What Tom Whitwell learned this year, always good stuff.
4. Should you offer to tip your GPT?
5. Claims from Jonah Goldberg.
6. Women fare better than men on the economics job market when they specialized in “high-male” fields.
p.s. they are doxxing anons using voice samples matched against text. Just fyi.
Immigration Backlash
In a new paper Ernesto Tiburcio (on the job market) and Kara Ross Camarena study the effect of illegal immigration from Mexico on economic, political and cultural change in the United States. Studying illegal immigration can be difficult because the US doesn’t have great ways of tracking illegal immigrants. Tiburcio and Camerena, however, make excellent use of a high-quality dataset of “consular IDs” from the Mexican government. Consular IDs are identification cards issued by the Mexican government to its citizens living in the United States, regardless of US immigration status. Consular IDs are used especially, however, by illegal immigrants because they can’t easily get US IDs whereas legal migrants have passports, visas, work authorizations and so forth. Tiburcio and Camarena are able to track nearly 8 million migrants over more than a decade.
Our main results point to a conservative response in voting and policy. Recent inflows of unauthorized migrants increase the vote share for the Republican Party in federal elections, reduce local public spending, and shift it away from education towards law-and-order. A mean inflow of migrants (0.4 percent of the county population) boosts the Republican party vote share in midterm House elections by 3.9 percentage points. Our results are larger but qualitatively similar to other scholars’ findings of political reactions to migration inflows in other settings (Dinas et al., 2019; Dustmann et al., 2019; Harmon, 2018; Mayda et al., 2022a). The impacts on public spending are consistent with the Republican agenda. A smaller government and a focus on law-and-order are two of the key tenets of conservatism in the US. A mean inflow of migrants reduces total direct spending (per capita) by 2% and education spending (per child), the largest budget item at the local level, by 3%. The same flow increases relative spending on police and on the administration of justice by 0.23 and 0.15 percentage points, respectively. These impacts on relative spending suggest that the decrease in total expenditure does not simply reflect a reduction in tax revenues but also a conservative change in spending priorities.
The main reason for this, however, appears not to be economic losses such as job losses or wages declines–these are mostly zero or small with some exceptions for highly specific industries such as construction. Rather it’s more about the salience of in and out groups:
We study individuals’ universalist values to capture preferences for redistribution and openness to the out-group. Universalist values imply that one is concerned equally with the welfare of all individuals, whether they are known or not. By contrast, people with more communal values assign a greater weight to the welfare of ingroup members relative to out-group members. We find that counties become less universalist in response to the arrival of new unauthorized migrants. A mean flow of unauthorized migrants shifts counties 0.06 standardized units toward less universalist, i.e., more communal (Panel B, Column 5, std coeff: -0.16). This result is the most direct indication that some of the shift to the political right occurs because migrants trigger anti-out-group bias and preferences for less redistribution. Although this evidence is based on a smaller subset of counties, the impact is large. The change toward more communal values is consistent with theories that hinge on out-group bias. Ethnic heterogeneity breaks down trust, makes coordination more difficult, and reduces people’s interest in universal redistribution (Alesina et al., 1999).
These results are consistent with the larger literature that finds “Across the developed world today, support for welfare, redistribution, and government provision of public goods is inversely correlated with the share of the population that is foreign-born and diverse.” (Nowrasteh and Forreseter 2020). Similarly, one explanation for the smaller US welfare state is that white-black salience reduces people’s interest in universal redistribution.
Contra Milton Friedman, it is possible to have open borders and a significant welfare state but it may be true that the demand for a welfare state declines with immigration, especially when the immigrants are saliently different.
Do start-ups formed during recessions fare better?
We combine novel micro data with the quasi-random timing of patent decisions over the business cycle to estimate the effects of being born in the Great Recession on innovative startups. After purging ubiquitous selection biases and sorting effects, we find that recession startups experience better long-term outcomes in terms of employment and sales growth (both driven by lower mortality) and future inventiveness. While funding conditions cannot explain differences in outcomes, a labor market channel can: recession startups are better able to retain their founding inventors and build productive R&D teams around them.
Here is the full research paper by Daniel Bias and Alexander Ljungqvist.
The realities of socialism
The Realities of Socialism is a multimedia project—a collaboration between organizations in Canada, Australia, the United States and United Kingdom—to educate people about the experiences of socialism that was imposed on tens of millions of people across the world throughout the 20th century. Here you will find data-driven videos, infographics, short videos and informative studies about socialism’s history in Poland and Estonia, Sweden and Denmark’s short experiment with socialism, and Singapore’s unique approach.
Here is the link, my colleague Peter Boettke is closely involved in this work.
YIMBY for commercial real estate
That is the topic of my latest Bloomberg column, here are some bottom line results:
What would “Yes in My Backyard” even mean in the context of commercial real estate?
A new economic research paper offers a hint of an answer: Most likely, there would be taller buildings, more mixed-use neighborhoods and considerably more wealth.
One way to approach this question is to look at less regulated cities. According to one widely used index, the least regulated metro area in the US is Midland, Texas. Midland isn’t particularly large or well-known, with a population of about 132,000, yet one of its nicknames is the “Tall City” because of its downtown skyline. When there is freedom to build, going vertical often is most cost-effective…
The research paper estimates the total social gains if every US city deregulated to the level of Midland, including the evening out of regulations within each city. The gains are strikingly large (though with some caveats): National output would rise by between 3% and 6%, and the gains in well-being would be in the range of 3% to 9% of lifetime consumption. Think of it as Americans getting a lifetime raise of at least 3%.
And:
Another caveat is that the data behind these estimates is based on 2018 numbers, when a little more than 5% of the work force worked from home. Under one more recent estimate, 12.7% of all full-time employees work fully from home. (Hybrid work is more common yet, but that typically still requires office space.)
So the researchers ran their model again, this time assuming that 40% of workers were at home full-time. They still found a 1.5% output gain. Of course, given that the US is not currently close to 40% work from home, the actual gains from commercial real estate deregulation, circa 2023, lie somewhere between 1.5% and the larger numbers — the 3% to 6% output boost — I cited earlier. The researchers suggest that the gains from deregulation are almost linear in the share of workers who need offices, so the larger measured gains should be closer to the truth.
Here is the underlying research by Fil Babalievsky, Kyle F. Herkenhoff, Lee E. Ohanian, and Edward C. Prescott.
Who is responsible for grade inflation at Yale? (economists are meanies?)
Here’s the real story: grade inflation at Yale is driven by the humanities and “studies” programs — with gender studies leading the way: https://t.co/lPg47ba3tC pic.twitter.com/jCJRr4kXj8
— Steve McGuire (@sfmcguire79) December 1, 2023
If you click on the tweet you can see the full lists, as it gets much worse than what makes it on the screen here. Via T. Greer.
Friday assorted links
1. Rasheed Griffith on reparations for the Caribbean.
2. Millions of new materials discovered by deep learning.
3. You can now pre-order Henry Oliver’s excellent
4. Chinese semi-clone of a GPT model. It’s not bad.
5. Remote collaboration fuses fewer breakthrough ideas.
6. You can pre-order Coleman Hughes, The End of Race Politics.
7. “Paraguay official resigns after signing agreement with fictional country.“
Constructing Influence
VoxDev: A pervasive politician-developer nexus exists in Indian cities, where politicians receive illicit financial support from real estate developers in exchange for favourable building policies and accelerated approvals. This “quid pro quo” facilitates the flow of “black money” — income hidden from tax authorities — into campaign coffers. The nexus is difficult to discern in detail due to the opacity of the system, but we uncover what is plausibly a natural consequence: when politicians turnover, building construction slows down.
From a summary in VoxDev of my Journal of Development Economics piece (with Tandel and Gandhi) on the politics of development in Mumbai.
Addendum: See also my Journal of Urban Economics piece on the dangers of public interest litigation in slowing development and also my videos Skyscrapers and Slums and Rent Control in Mumbai for more on these issues.
South American economic growth
All countries in South America have become richer over the past 40 years — except the socialist paradise of Venezuela.
(Note: Guyana discovered oil and is now very wealthy.)
IMF estimates. pic.twitter.com/Kbinzg9VWI
— Whyvert (@whyvert) November 29, 2023
While there are varying sources, I did check a few of the numbers and they were confirmed. At first they seemed a little high to me.
Addendum: Note there is some kind of data problem with the 1980 numbers, but the latter-day numbers seem fine.
World War II R&D and the Takeoff of the US Innovation System
That is the article subtitle, the title is “America, Jump-Started:,” and the authors of this new AER piece are Daniel P. Gross and Bhaven N. Sampat. Here is the abstract:
During World War II, the US government’s Office of Scientific Research and Development (OSRD) supported one of the largest public investments in applied R&D in US history. Using data on all OSRD-funded invention, we show this shock had a formative impact on the US innovation system, catalyzing technology clusters across the country, with accompanying increases in high-tech entrepreneurship and employment. These effects persist until at least the 1970s and appear to be driven by agglomerative forces and endogenous growth. In addition to creating technology clusters, wartime R&D permanently changed the trajectory of overall US innovation in the direction of OSRD-funded technologies.
This is very important work, and among other things it may help explain the productivity slowdown starting in the early 1970s (that is my speculation, not from the authors). Recommended, for all those who follow these topics.
Here are earlier, less gated copies.
Nathaniel Hendren emails me
Saw your recent post on Intergenerational Mobility being constant over time. Just wanted to flag the importance of defining the relevant notion of Intergenerational Mobility. Much of the “mobility is falling” discussion has been about absolute mobility (kids earning more than their parents) not relative mobility. I think the evidence is now reasonably well-aligned in suggesting that various measures of relative mobility are reasonably stable over time (as we found in our work). But, absolute mobility has fallen in the last 50 years.
Thursday assorted links
1. Alexandria, Virginia ends single family only residential zoning.
2. Predictions about Seoul yikes.
4. Background on the pending Guyana conflict.
5. Camera obscura, AI, and art.
6. Is AI easy to control? Speculative, but a good example of how the discourse runs, this time from the optimist side. And claims about Chinese open source AI, speculative too but important if true. And more.
Markets in everything those new service sector jobs
The video, posted by the 39-year-old Tampa resident under her stage name Roxie Rae, is one of dozens on Clips4Sale, an adult-video-sharing website where content creators cater to all types of sexual fetishes, including one that is rarely discussed outside of niche kink circles: political humiliation. There are people who get turned on by the idea of having their political views mocked, usually (but not always) by members of the opposing political group. Liberals desire being dominated by conservatives and called pejoratives that imply they are weak and unintelligent, while conservatives want to be mocked for supporting former president Donald Trump, among other perceived transgressions, according to those who participate in this subculture.
Here is the full Washington Post article by Hallie Lieberman.
My excellent Conversation with John Gray
I had been wanting to do this one for a while, and now it exists. Here is the audio and transcript, here is the episode summary:
Tyler and John sat down to discuss his latest book, including who he thinks will carry on his work, what young people should learn if liberalism is dead, whether modern physics allows for true atheism, what in Eastern Orthodoxy attracts him, the benefits of pessimism, what philanthropic cause he’d invest a billion dollars in, under what circumstances he’d sacrifice his life, what he makes of UFOs, the current renaissance in film and books, whether Monty Python is still funny, how Herman Melville influenced him, who first spotted his talent, his most unusual work habit, what he’ll do next, and more.
Excerpt:
COWEN: Do you think that being pessimistic gives you pleasure? Or what’s the return in it from a purely pragmatic point of view?
GRAY: You are well prepared for events. You don’t expect —
COWEN: It’s a preemption, right? You become addicted to preempting bad news with pessimism.
GRAY: No, no. When something comes along which contradicts my expectations, I’m pleasantly surprised. I get pleasant surprises. Whereas, if you are an adamant optimist, you must be in torment every time you turn the news on because the same old follies, the same old crimes, the same old atrocities, the same old hatreds just repeat themselves over and over again. I’m not surprised by that at all. That’s like the weather. It’s like living in a science fiction environment in which it rains nearly all of the time, but from time to time it stops and there’s beautiful sunlight.
If you think that basically there is beautiful sunlight all the time, but you’re just living in a small patch of it, most of your life will be spent in frustration. If you think the other way around, as I do, your life will be peppered, speckled with moments in which what you expect doesn’t happen, but something better happens.
COWEN: Why can’t one just build things and be resiliently optimistic in a pragmatic, cautionary sense, and take comfort in the fact that you would rather have the problems of the world today than, say, the problems of the world in the year 1000? It’s not absolute optimism where you attach to the mood qua mood, but you simply want to do things and draw a positive energy from that, and it’s self-reinforcing. Why isn’t that a better view than what you’re calling pessimism?
And:
COWEN: Under what circumstances would you be willing to sacrifice your life? Or for what?
GRAY: Not for humanity, that’s for sure.
Recommended, interesting throughout. John is one of the smartest and best read thinkers and writers. He even has an answer ready for why he isn’t short the market. And don’t forget John’s new book — I read all of them — New Leviathans: Thoughts After Liberalism.
*Everyday Freedom*, by Philip K. Howard
This is very much a book that needed to be written. Here is one short excerpt:
Powerlessness has become a defining feature of modern society. Americans at all levels of responsibility feel powerless to do what they think is needed. The culture wars, sociologist James Davison Hunter explains, stem from institutional impotence: A “growing majority of Americans believe that their government cannot be trusted, that its leaders . . . are incompetent and self-interested, and that as citizens, they personally have little power to influence the . . .institutions or circumstances that shape their lives.”
Feeling fragile, and buffeted by forces beyond our control, many Americans retreat to online groups defined by identity and by distrust of the other side as “a threat to [our] existence.” It’s hard to identify what’s wrong amid the clamor and conflict in modern society. But a clue can be found in remembering what makes us proud. America is where people roll up our sleeves and get it done.
The ability to do things in our own ways activates the values for which America is well-known: self-reliance, pragmatism, and loyalty to the greater good—what Alexis de Tocqueville called “self-interest, rightly understood.” For most of American history, the power and imperative to own your actions and solutions—the concept of individual responsibility—was implicit in the idea of freedom.
Americans didn’t abandon our belief in individual responsibility. It was taken away from us by post 1960s legal framework that, with the best of intentions, made people squirm through the eye of a legal needle before taking responsibility. Individual responsibility to a broader group, for example, was dislodged by a new concept of individual rights focused on what’s best for one person or constituency. The can-do culture became the can’t do culture.
At every level of responsibility, Americans have lost the authority to do what they think is sensible. The teacher in the classroom, the principal in a school, the nurse in the hospital, the official in Washington, the parent on the field trip, the head of the local charity or church . . . all have their hands tied by real or feared legal constraints.
And yes he does propose concrete solutions, most of all at the level of the law. The whole thing is only 84 pp., and this is one of the books that comes closest to diagnosing what is wrong with our country. The subtitle is Designing the Framework for a Flourishing Society.