My Conversation with Ed Glaeser

I did David Cutler and Ed sequentially, based on their new co-authored book, here is the joint episode but there is also a separate link concerning Cutler.  Here is one excerpt from the general summary:

They joined Tyler for a special joint episode to discuss why healthcare outcomes are so correlated with education, whether the health value of Google is positive or negative, why hospital price transparency is so difficult to achieve, how insurance coding systems reimburse sickness over health improvement, why the U.S. quit smoking before Europe, the best place in America to get sick, the risks that come from over-treatment, the possible upsides of more businesses moving out of cities, whether productivity gains from remote work will remain high, why the older parts of cities always seem to be more beautiful, whether urban schools will ever improve, why we shouldn’t view Rio de Janeiro’s favelas as a failure, how 19th century fights to deal with contagious diseases became a turning point for governance, Miami’s prospects as the next tech hub, what David and Ed disagree on, and more.

And from my exchange with Ed:

COWEN: Let’s start with a simple question. All this enthusiasm about cities and agglomeration benefits — the pandemic comes along. A lot of people transition to work from a distance, and then we see big measured productivity gains. What has gone on there?

GLAESER: It reminds us that for many jobs, in a static sense, you can do this long-distance. You can make things work. I think many of us found this. We wrote this book in eight months over the pandemic year, distinctly away from each other, partially because there were no distractions, and all that was good.

However, you also need to recognize the limits of long-distance living. The most important of those limits is just it’s much less fun. It’s much less joyful, but while it seems as if it’s fine for static productivity, it seems distinctly more problematic for people learning and for onboarding new talent.

Let me just give you two types of studies, one of which is we have the call center studies. The father of that was the Nick Bloom paper, which was a randomized control trial in China. A more modern version is done by our students, Natalia Emanuel and Emma Harrington, which looks into American call centers.

Both of them find the same thing in terms of static productivity. If anything, it goes up, but the workers who go remote are much less likely to be promoted in both studies. One interpretation of this is that promotion in the call center work means that you actually are given the job of handling more difficult calls.

How would your boss know that you are good at handling difficult calls if they weren’t in the same room with you? How would you learn how to do those difficult calls if you weren’t around other people? So while the static productivity remains, you lose the dynamic benefits of being around other people.

Second piece of evidence it comes from Burning Glass Technologies and new hires. Even though Microsoft tells us that its programmers were just as productive, overall, new hires for programmers were down 42 percent between November 2019 and November 2020. Firms were clearly unwilling to take the same kind of risks of hiring new workers that they couldn’t inculcate in their corporate culture or screen them properly, or do any of those other things.

Even though measured productivity did well during the pandemic, there were still lots of disruptions. In particular, many younger workers who came of age really lost out as a result of this.

COWEN: If work from a distance goes fine in the short run, what’s the cross-sectional prediction about where it will persist in the future? Is it firms facing bankruptcy, firms with immediate projects now, possibly start-ups who will then later transition to all being together in one big happy family, but they’re afraid they’re going to fail before then? What should we expect?

GLAESER: I think we should expect young workers to be more likely to be brought together. Young firms, as well, because you’re very much at this learning, creative phase. I think the optimal work-from-home strategy is a couple of partners who are in an accounting practice and have decided they know each other perfectly well and are delighted to Zoom it in from wherever they are.

I think, unquestionably, working from home will remain a part of the economy. It may well be many workers end up spending 20 percent of their time working from home, even if they’re part of a generally full-time job. But for younger workers, for firms that are just getting started, I think being live is likely to continue being a major part of the work environment.

It also depends a lot on what your home environment is like. If you’re like us —  if you are a middle-aged professor who’s likely to have a comfortable home office, and maybe even not having kids at home anymore, certainly not kids who are crying all the time at home anymore — working at home is a lot more pleasant than if you’re a 23-year-old and live in a studio apartment in Somerville or New York or London.

Recommended!

My Conversation with David Cutler

I did Cutler and Ed Glaeser sequentially, based on their new co-authored book, here is the joint episode but I will create another link concerning Glazer.  Here is one excerpt from the general summary:

They joined Tyler for a special joint episode to discuss why healthcare outcomes are so correlated with education, whether the health value of Google is positive or negative, why hospital price transparency is so difficult to achieve, how insurance coding systems reimburse sickness over health improvement, why the U.S. quit smoking before Europe, the best place in America to get sick, the risks that come from over-treatment, the possible upsides of more businesses moving out of cities, whether productivity gains from remote work will remain high, why the older parts of cities always seem to be more beautiful, whether urban schools will ever improve, why we shouldn’t view Rio de Janeiro’s favelas as a failure, how 19th century fights to deal with contagious diseases became a turning point for governance, Miami’s prospects as the next tech hub, what David and Ed disagree on, and more.

And from David:

COWEN: But even if we adjust for that, education seems to matter a lot. It’s also puzzling to me — in your own work, it matters more at younger ages. You would think the returns are cumulative: it would really pay off when you’re 67 because you’ve invested in a stock portfolio for decades, but it matters most when you’re young. What’s your best micro account of that?

CUTLER: One of the things that’s super interesting is that, for example, people who live in cities — where there are more better-educated people — smoke less, even conditional on your own education. The same thing is true about age and so on.

I think it’s partly that cities and areas are run by upper-middle-class folks often. For example, the environment is set up in a way that’s more conducive to health when you have more upper-middle-income people. It’s much more difficult to smoke. There are healthier behaviors in general. There are parks and things like that. I think part of it is just that society is shaped by higher-income, higher-SES people, and that can be good for everyone who lives around those areas.

COWEN: To the extent education makes you healthier by lowering your stress and raising your relative status — which is a possible hypothesis — what are the policy implications of that? What should we do?

CUTLER: Part of what we’re learning over time is that social insurance programs are actually having a bigger and more sustained effect on health than we had thought they did. For example, we’ve always thought of Medicare and Medicaid as being the primary social insurance programs that affect health, but then there’s research that the WIC program — Women, Infants, and Children — affects health, that food stamp programs affect health, that TANF benefits affect health, that housing policies can affect health.

COWEN: And you think that’s through lowering stress as one mechanism?

Recommended!

Wednesday assorted links

1. More on Loot.  And a good discussion of property rights in characters.

2. Why are inmates so much more vaccinated than jailers?

3. Pending regulatory movements on crypto.  One kind of crazy claim at the end there.  And commentary from Brian Armstrong.

4. Australia’s new mass surveillance mandate.

5. One way to counter excess GPS vulnerability?

6. Only $1.5 trillion for Manchin?

7. Matt Walsh in trouble for opposing the “feminization” of football.

Strategic Citing

Amir Rubin and Eran Rubin have a clever new paper in the JPE on strategic citations (SSRN). In order to obtain publications in top-tiered journals, get invited to conferences, become a reference and so forth:

…authors may cite top-tier journals as a way to enhance their relationships with those journals.They may further consider the preferences of top-tier journals’ referees for such citations. Typically, these referees serve more than one top-tier journal, which they potentially even more appreciate as quality signals and whose top-tier status they wish to preserve by receiving citations. Consequently, authors may consider the expected positive impact of top-tier journal citations in satisfying referees.

Rubin and Rubin have a unique test of this behavior. For administrative reasons, the Journal of Business, a top journal in finance, stopped publication in 2006. Thus, after 2006, there were fewer strategic reasons to cite JOB papers even though the scientific reasons to cite these papers remained constant. The authors test this by matching articles in the JOB with articles in similar journals published in the same year and having the same number of citations in the two years following publication–thus they match on similar articles with a similar citation trajectory. What they find is that post-2006 the citation count of the JOB articles falls substantially off the expected trajectory. The figure below illustrates.

The finding is robust to controlling for self-citations, own-journal citations, and a variety of other possibilities. The authors also show that deceased authors get fewer citations than matched living authors. For example, living Nobel prize winners get more citations than dead ones even when they were awarded the prize jointly.

Rubin and Rubin suggest this bias might be correctable with more metadata on citations. Negative citations, for example, can be very informative about the development of a scientific field. I am not sure the problem is big enough to worry about but I was impressed by how much strategic behavior can be uncovered by clever data analysis. I was also convinced I should be more strategic in my citations.

Britney freed?

Britney Spears’s father, James P. Spears, who agreed earlier this summer to eventually step down from his own role in the conservatorship that has overseen her finances and controlled much of her life since 2008, filed a petition on Tuesday asking the court to “now seriously consider whether this conservatorship is no longer required.”

The filing marked a turnaround for Mr. Spears, who long insisted that the guardianship — which was imposed 13 years ago amid concerns over the singer’s mental health and possible drug use — was in his daughter’s best interest. Last month, he said he would eventually step aside from his role overseeing the singer’s finances once there could be “an orderly transition to a new conservator,” but argued that he should not be immediately removed. Until now, he has not said that the conservatorship should end, something that Ms. Spears announced she wanted publicly for the first time in a June court hearing, when she called the arrangement “abusive.”

Here is more from the NYT.

What I’ve been reading

1. Sarah Gilbert and Catherine Green, The Vaxxers: The Inside Story of the Oxford AstraZeneca Vaccine and the Race Against the Virus.  Self-recommending (they were leaders on the team), most of all it is striking how much time they spend covering and complaining about problems in the science funding network.  Let’s improve that.  In any case I enjoyed the book.

2. Harald Jähner, Aftermath: Life in the Fallout of the Third Reich, 1945-55.  A quite interesting book which considers how German women were disappointed in German men, how eastern German women dealt with Soviet soldier rape, how the Soviets resumed classical orchestral concerts within weeks (for their own pleasure), currency conversion, and more: “But Beate Uhse fell foul of the law for the first time, not because of violation of the moral code of corrupting the young, but for breach of price regluations.”

3. Jeevan Vasagar, Lion City: Singapore and the Invention of Modern Asia.  Selective rather than comprehensive, but entertaining and balanced and insightful.  Those interested in Singapore should read this book, and even Singapore experts will learn some new nuggets.  The author was the FT correspondent in Singapore from 2015 to 2017.

4. Mathilde Fasting and Øystein Sørensen, The Norwegian Exception: Norway’s Liberal Democracy Since 1814.  “This book started as an idea to explain Norwegian society to a broader public.”  I am not sure they quite succeed, but still it is the best single Norway book I know.  I hadn’t known for instance that Norway has two different official written languages.  In general there should be more books trying to explain highly successful countries!  This is a move in the right direction, and I am happy to see that the authors do not try to deny or run away from Norway’s first-rate performance.

5. James Hawes, The Shortest History of England.  One can pick nits with books such as these, but I found this one useful.  It stresses the role of the French in English history, and also the ongoing clash between the South and the North over who will rule whom.

There is also Robert Wuthnow’s Why Religion is Good for American Democracy (true), and Michael Taylor’s The Interest: How the British Establishment Resisted the Abolition of Slavery, which dashed my hopes when I learnt that Alexander McDonnell, the Belfast-born 19th century chess player who famously sparred with Louis de la Bourdonnais, also was a strongly pro-slavery and pro-imperialism economist in his time.

U.S.A. facts of the day

At the close of the 2020-21 academic year, women made up 59.5% of college students, an all-time high, and men 40.5%, according to a Wall Street Journal analysis of enrollment data from the National Student Clearinghouse, a nonprofit research group. U.S. colleges and universities had 1.5 million fewer students compared with five years ago, and men accounted for 71% of the decline, the Journal analysis found.

This education gap, which holds at both two- and four-year colleges, has been slowly widening for 40 years. The divergence increases at graduation: After six years of college, 65% of women in the U.S. who started a four-year university in 2012 received diplomas by 2018 compared with 59% of men during the same period, according to the U.S. Department of Education.

In the next few years, two women will earn a college degree for every man, if the trend continues, said Douglas Shapiro, executive director of the research center at the National Student Clearinghouse.

Here is more from Douglas Belkin at the WSJ.

Organic Disaster

Sri Lanka’s President abruptly banned chemical fertilizers earlier this year in a bid to become 100% organic. The ban has resulted in reduced production and soaring prices that, together with declining tourism and the pandemic, have created an economic crisis.

According to major Sri Lankan tea conglomerate Herman Gunaratne, one of 46 experts picked by President Rajapaksa to spearhead the organic shift, the move’s consequences for the country are unimaginable.

“The ban has drawn the tea industry into complete disarray… If we go completely organic, we will lose 50 per cent of the crop, (but) we are not going to get 50 per cent higher prices,” he reportedly said.

…Former central bank deputy governor W.A. Wijewardena reportedly termed the organic plan as a “dream with unimaginable social, political and economic costs”. He said Sri Lanka’s food security had been “compromised” and without foreign currency, it’s “worsening day by day”.

An island-wide survey of farmers found out that 90 per cent use chemicals for farming and 85 per cent expected sizable reductions in their harvest if disallowed to use fertilisers. Moreover, the survey said that only 20 per cent farmers had the knowledge to transition to completely organic production.

It also found that 44 per cent farmers are experiencing a decline in harvests, and 85 per cent are expecting a fall in the future.

The survey also revealed that many key crops in Sri Lanka depend on heavy use of chemical input for cultivation, with the highest dependency in paddy at 94 per cent, followed by tea and rubber at 89 per cent each.

With the shift from chemical to organic cultivation, Sri Lanka needs a large domestic production of organic fertilisers and biofertilisers. However, the situation is very bleak.

The government has responded to the soaring prices not by reversing its decree but in the usual way by imposing price controls, attacking “hoarders” and seizing stocks of agricultural commodities like sugar.

Organic farming has its place but it takes a lot of human capital to make it work and overall it results in lower yield and thus more land used. Nor is organic farming less polluting per unit of output. See this piece from the Annual Review of Resource Economics.

Organic agriculture is often perceived as more sustainable than conventional farming. We review the literature on this topic from a global perspective. In terms of environmental and climate change effects, organic farming is less polluting than conventional farming when measured per unit of land but not when measured per unit of output. Organic farming, which currently accounts for only 1% of global agricultural land, is lower yielding on average. Due to higher knowledge requirements, observed yield gaps might further increase if a larger number of farmers would switch to organic practices. Widespread upscaling of organic agriculture would cause additional loss of natural habitats and also entail output price increases, making food less affordable for poor consumers in developing countries. Organic farming is not the paradigm for sustainable agriculture and food security, but smart combinations of organic and conventional methods could contribute toward sustainable productivity increases in global agriculture.

Why the defenses of Australia do not persuade me

Alex laid out some complaints about Covid policy down under, I have been receiving emails and tweets arguing the following:

1. Australia is choosing a perfectly acceptable point on the liberty vs. safety frontier.

2. The Australian decision to do extreme lockdowns is democratic, and most Australians support it.

And sometimes I see a third point, which as far as I can tell is true:

3. Australia doesn’t have much in the way of ICU excess capacity, so a Covid surge would hit the country especially hard.

I think those responses, however, are missing the point of the critique.  I would stress that if Covid risk has you with your back against the wall and the government is forcing extremely restrictive measures on your citizenry, you should be implementing the following in an urgent manner:

a. Twice a week rapid antigen tests for everyone.  (Plenty of time to prep for this one.)

b. Much stronger incentives to vaccinate people more rapidly, including with the large stock (six million or so?) of AstraZeneca vaccines.  Demand side incentives, supply side incentives, whatever can be done.  Let’s throw the kitchen sink at this one.  But as it stands, I just don’t see the urgency.

c. Mobile monoclonal antibody units, as they are used in Florida (modest progress here).

d. Maybe other emergency measures too?  I’ve been hearing for decades that Australia has such a great health care system so surely they can make lots of progress on these and other fronts?

As far as I can tell from this great distance, Australia is doing none of these.  And, while there is some disquiet about lockdowns, few of its citizens are demanding that they do any of those positive measures.  Not many of its well-known politicians are proposing those ideas either.  (Please feel free to correct me if that is wrong!…but I just don’t see word of it on-line.)

If Australia implemented all of those policies, or even just one of them, they could attain a much better “liberty vs. lives” frontier, no matter where you think the government should end up on that frontier.  They could save lives, and enjoy more liberty.

And that is the great shame and indeed I would say crime.  There seems to be an incredible complacency that people in some parts of the country will put up with the current measures and not demand the government look for more practical measures to boost both liberty and security.

So when you write me and suggest “this is democratic and the people approve,” yes that is exactly the problem.

Are machine guns on the side of the civilized?

From Priya Satia’s recent and interesting Time’s Monster: History, Conscience and Britain’s Empire:

Evolutionary history likewise advised tolerance in the face of the mass death enabled by the new machine guns, which ended the long technological parity between Europeans and others, making it possible for Europeans to conquer Africa at least.  Robert Routledge’s popular 1876 history of science lifted Adam Smith’s language defending firearms a century earlier to assure those concerned about machine guns’ destructive nature that they favored “the extension and permanence of civilization.”  Their complexity and expense — itself testimony to European genius — ensured that they could be wielded only by “wealthy and intelligent nations.”  But for a notable substitution of “race” for “nation,” he echoed Smith’s language almost verbatim (without citation) in arguing that firearms gave a necessary advantage to “opulent and civilized communities” over “poor and barbarous races,” which were today “everywhere at the mercy of the wealthy and cultivated nations.”

Obviously the same always will be true for nuclear weapons as well, right?

The book, by the way, is especially interesting about how thinking about progress is related to views of imperialism, though note the first 100 pp. are significantly less focused than the rest of the text.

Monday assorted links

1. Alberto Vilar, RIP.

2. Murky, but important, here is an excellent thread from Avichal Garg on Loot.  And from Tandavas.eth.  Pay attention people.  I know it makes your brain hurt, but…”suck it up kid!”

3. Tom Holland podcast with @pmarca on the history of Silicon Valley.

4. Claims about obesity (speculative).

5. Autor’s mistakes in labor economics.

6. Is there adverse selection for taking equity shares in human capital?

7. New Yorker profile of Kathryn Paige Harden too much mood affiliation in our world.