Does the internet limit immigrant assimilation?
This paper documents the effects of new communication technologies on immigrants’ socio-economic integration, spatial and job segregation, and networking behavior. Combining data on home-country Internet expansion shocks with data on immigrants’ linguistic skill, naturalization, location choice, and employment in the US, I find that home-country Internet slows down immigrants’ social and economic integration. The effect is driven by lower-skilled and younger immigrants. On the other hand, home-country Internet decreases spatial and job segregation with co-nationals, and increases immigrants’ subjective well-being. For the mechanisms, I use the American Time Use Survey data to show that home-country Internet changes networking behavior of immigrants. I also explore the role of (i) return intentions, (ii) international phone calls, and (iii) Facebook usage. The evidence is consistent with a simple Roy model, augmented with a choice between destination- and origin-country ties. Overall, this paper shows how new ICTs transform the links between immigration, diversity, and social cohesion.
That is from the job market paper of Alexander Yarkin from Brown University.
Sunday assorted links
1. Profile of Donald Harris and his economic thought (New Yorker…note I knew of Donald long before I knew of Kamala, and definitely though of him as a Marxist).
2. Final James C. Scott book is coming.
3. Economic effects of Evangelical Christianity.
Local Labor Market Effects of Amazon
Does the entry of a large employer to a local labor market increase welfare for residents? To answer this question, I analyze the local effects of the dramatic expansion of Amazon’s fulfillment center (FC) network from 2010 onward. I exploit the staggered roll-out of FCs across large U.S. metros in a difference-in-difference framework. I find Amazon’s entry in a metro increases the total employment rate by 1.0 percentage point and average wages by 0.7 percent. The composition of employment shifts from retail and wholesale trade to warehousing and tradeable services, primarily driven by younger workers. Employment gains are concentrated among non-college workers. Rents increase by 1.1 percent, utility costs increase by 6.0 percent, and home values increase by 5.6 percent. I interpret these results through the lens of a static spatial equilibrium model. I find a net increase in aggregate welfare: the average worker is willing to pay $329 per year (0.8 percent of income) to live in a large city with Amazon. The welfare gains are primarily driven by rising home values; the increase in employment, wages, and sectoral shifts account for only one-tenth of the increase. These positive impacts are partially offset by rising local costs of living and the declining value of non-wage amenities in large cities. Government subsidies have a negligible effect on welfare as they are a small share of state and local budgets.
That is from the job market paper of Evan R. Cunningham, of the University of Minnesota.
Increasing the Supply of Very High-IQ Workers
I have argued that there are on the order of just 164 thousand very high-IQ workers in the United States. How do we get more? Ian Calaway on the job market from Stanford has an interesting paper arguing that early math mentors can be a force multiplier for students with superior math abilities. Calaway estimates that having a math mentor at a school, someone who runs a math club and organizes entry into top math competitions, increases the number of students earning PhDs and pursing careers as scientists and professors. Not every school has such a math mentor but Calaway estimates (after taking into account underlying abilities, he’s not naive) that over 27 years, math mentors identified 9,092 American Math Competitions students (the cream of the crop) but there were 11,168 missing students of very high ability.
These 11,168 additional students represent the missing exceptional math talents who would have participated in the AMC and been identified as exceptional if they had access to a mentor…these mentors would have increased the number of these students attending selective universities (3,017 students), majoring in STEM (3,465 students), earning PhDs (1,652 students), and pursuing careers as scientists and professors (1,850 students) during this twenty-seven year period.
11,168 missing students of very high ability over 27 years may not sound like much but we are talking about the very top talent level. A footnote illustrates:
Sergey Brin (Google), Mark Zuckerberg (Meta), Peter Thiel (PayPal), and Sam Altman (OpenAI) were all top AMC scorers (Committee on the American Mathematics
Competitions, 1980–2023)
High-IQ individuals don’t simply vanish without mentorship; they likely still have decent careers. However, even if you are skeptical about the social value of earning a PhD, the number of mentored individuals who go on to start firms or earn patents appears substantial. Just as athletic talent can wither without guidance, it seems that intellectual talent may also be underutilized without proper mentorship, with many high-IQ individuals failing to reach their full potential.
Spinoza is ten years old today
Happy Birthday Spinoza!
Emergent Ventures winners, 38th cohort
Sandro Luna, Austin, easier ways of getting blood pressure readings.
Divyan Bavan, Ontario, 17, machine learning for biology.
Michael Domarkas, 17, Surrey, UK, general career support for the biosciences.
Saras Agrawal, 17, Alberta, AI to monitor heart attack risk.
Charmaine Lee, NYC, music composition and performance.
Jodi Ettenberg, Ottawa, podcast on how to deal with adversity.
Jiya Singhal, Stavanger, Norway, high school, AI to detect skin cancer.
Janine Leger, Texas, for building full-time communities around the globe.
Rishi Mehta, Toronto, a device to limit falls of the elderly.
Ivan Lin, Sydney, 16, travel grant to the Bay Area.
Fearghal Desmond and Ryan Morrissey, Cork and Limerick, Induct, and a travel grant to SF.
Filip Cerny, 18, Prague, general career support, building out entrepreneurship in Czechia.
James Vitali, London, to write a book about the political future of the UK, general career support.
Harry Law, Cambridge, UK, historian of science, to write a history of AI.
Joshua Muthu, Warwick, UK, economic models of cities and building.
Kyla Scanlon, Venice, CA, to produce content on economics, including a new documentary, and also for travel support.
Pieter Garicano, WDC and Europe, general career support, writing on Europe, progress, and technology.
Ukraine cohort:
Nazar Drugov, Cambridge, MA, and MIT, and Ukraine, 17, to make Khanmigo fully functional in Ukrainian.
Aleksandra Peeva, Berlin, to study Russian sanctions.
Maria Marinichenko, physics and math instruction in Ukrainian for Ukrainians.
Anastasiya Dobrobabenko, STEM education for a school near Kyiv.
Saturday assorted links
1. “Using spatial regression discontinuity and instrumental variable designs, we find that areas with greater historical exposure to homesteading are poorer and more rural today.” From Harvard job market candidate Ross Mattheis.
2. Steve Mariotti, RIP (NYT).
3. Costco hearing aids as loss leader (WSJ).
4. Interview with Cynthia Haven.
5. The new trench warfare in Ukraine (NYT).
6. How macro works if people think about the economy in only a “shallow” fashion.
The Immigration Rap Battle
From the team that brought you Hayek v. Keynes we have the immigration rap battle featuring “George Borjas,” “Garett Jones” and “Stephen Miller” on team build the wall and “Bryan Caplan” and “Alex Nowrasteh” on open the border. I wouldn’t say the actors (AI?), look very much like their real world counterparts but much respect to the author of the rap lyrics who has brilliantly captured the essence of the ideas economically and thematically.
Germany fact of the day, the work culture that is German
Workers missed an average of 19.4 days because of illness in 2023, according to Techniker Krankenkasse, the country’s largest public health insurance provider.
Preliminary figures suggest the trend is on course to continue its upward trajectory, TK told the Financial Times, exacerbating challenges for an economy that many expect to contract for the second year running in 2024.
While it is notoriously difficult to compare data from country to country, Christopher Prinz, an expert on employment at the OECD, said Germany was “definitely among the higher countries” when it came to sick leave.
study published in January by the German Association of Research-Based Pharmaceutical Companies (VFA), an industry body, found that were it not for the country’s above-average number of sick days, the German economy would have grown 0.5 per cent last year, rather than shrinking 0.3 per cent.
Here is more from Laura Pitel at the Financial Times. Via Roland Stephen.
Should Notre Dame charge admission?
That is the topic of my latest Bloomberg column, as the Cathedral is reopening in December. The government wants to charge visitors five euros, but the Church is opposed. Here is part of my proffered solution:
First, charge a fee — but make it €10 rather than €5. If seeing Notre Dame is worth only €7 or €8 to someone, I don’t mind excluding them, for the benefit of those who really want to see the place. The crowds should diminish — and if they don’t, just raise the admission fee. St. Paul’s in London, by the way, charges £25 for adult admission, and Saint-Denis in Paris charges €11. Anyone who can afford to visit Paris can afford to pay more than €5 to see Notre Dame.
Second, assign a priest, nun or other religious counsel to the church, to service any religiously minded visitor who might require assistance in matters of the soul. If need be, that person can walk the God-searching visitor to a nearby church where visits are free. Admission fees will help fund this service, which would be symbolically important even if little used.
Third, set aside further time for Notre Dame to be a quiet and more religious place. Maybe make admission free for one day per week — but only for residents of Paris. Since most visitors stay in Paris for more than a day, the determined tourist still should be able to see the church.
And note this:
The commercialization of churches has some major downsides — but an admission fee can be a partial antidote to commercialization, not its apogee.
And this:
To put it another way: Extreme crowding is a fee of another sort, even if its nominal price remains at zero.
Let’s hope they do it.
Friday assorted links
1. The gender gap in apologies. Marshall Mo is on the job market from Stanford, and has a very interesting broader portfolio.
2. Haitian zombie show at Quai Branly in Paris (NYT).
3. Is dark energy from black holes? And axions as dark matter? (NYT)
4. The Rational Optimist Society.
6. Hungary enters its second recession in two years.
7. Short documentary about network states.
8. Botswana is somewhat ailing (FT).
Instructor value-added in higher education
On average, moving to a 1 standard deviation better instructor would increase a student’s next semester GPA by 0.13 points, and earnings six years after college entry by 17%. Strikingly, value-added is only weakly correlated with student evaluations. An instructor retention policy based on value-added would result in 2.7% higher earnings for students attending Texas universities.
That is from a new job market paper by Merrill Warnick, Jacob Light, and Anthony Yim from Stanford. Here is Warnick’s job market portfolio.
Sugar Babies
Science: We examined the impact of sugar exposure within 1000 days since conception on diabetes and hypertension, leveraging quasi-experimental variation from the end of the United Kingdom’s sugar rationing in September 1953. Rationing restricted sugar intake to levels within current dietary guidelines, yet consumption nearly doubled immediately post-rationing. Using an event study design with UK Biobank data comparing adults conceived just before or after rationing ended, we found that early-life rationing reduced diabetes and hypertension risk by about 35% and 20%, respectively, and delayed disease onset by 4 and 2 years. Protection was evident with in-utero exposure and increased with postnatal sugar restriction, especially after six months when solid foods likely began. In-utero sugar rationing alone accounted for about one third of the risk reduction.
Pregnant women might want to ration their sugar intake, as well as alcohol, during pregnancy.
Hat tip: Kevin Lewis.
Are sports bettors overly optimistic?
Corrective policy in sports betting markets is motivated by concerns that demand may be distorted by behavioral bias. We conduct a field experiment with frequent sports bettors to measure the impact of two biases, overoptimism about financial returns and self-control problems, on the demand for sports betting. We find widespread overoptimism about financial returns. The average participant predicts that they will break even, but in fact loses 7.5 cents for every dollar wagered. We also find evidence of significant self-control problems, though these are smaller than overoptimism. We estimate a model of biased betting and use it to evaluate several corrective policies. Our estimates imply that the surplus-maximizing corrective excise tax on sports betting is twice as large as prevailing tax rates. We estimate substantial heterogeneity in bias across bettors, which implies that targeted interventions that directly eliminate bias could improve on a tax. However, eliminating bias is challenging: we show that two bias-correction interventions favored by the gambling industry are not effective.
That is from a new paper by Matthew Brown, Nick Grasley, and Mariana Guido. Matthew Brown is a job market candidate from Stanford, and has a very interesting broader portfolio.
I do not, by the way, favor a ban on sports betting, but it is worth asking, when appropriate, what is the utilitarian cost of one’s libertarianism. On this particular issue, I would say “rising!”
The evolution of nepotism in academia, 1088-1800
We have constructed a comprehensive database that traces the publications of father–son pairs in the premodern academic realm and examined the contribution of inherited human capital versus nepotism to occupational persistence. We find that human capital was strongly transmitted from parents to children and that nepotism declined when the misallocation of talent across professions incurred greater social costs. Specifically, nepotism was less common in fields experiencing rapid changes in the knowledge frontier, such as the sciences and within Protestant institutions. Most notably, nepotism sharply declined during the Scientific Revolution and the Enlightenment, when departures from meritocracy arguably became both increasingly inefficient and socially intolerable.
That is from a new paper by David de la Croix & Marc Goñi. Via the excellent Kevin Lewis.