Neil
Irwin, NYT: Why Negative Interest Rates Are Becoming the New Normal. What we’re learning from Europe about negative rates
and the nonexistence of the zero lower bound is an exemplar for a lot of
monetary experimentation over the last six years. Tools that existed as
academic thought experiments a decade ago are now becoming standard-issue parts
of the central banks’ policy tool kit. Strategies tried briefly by small
countries like Denmark are embraced by the giants of the world economy. It’s
just too bad we had to learn these lessons the hard way — through years upon
years of trial and error, with lots of economic suffering along the way.
Bradley
Speigner, BoE: Finding a Match. Is falling unemployment masking a broader
deterioration in UK labour market performance? The ease with which a typical
job seeker lands a job is a crucial indicator of the health of the labour
market, which cannot be fully inferred from just a casual glance at the
headline unemployment rate. It is true that unemployment has declined quite
rapidly recently. But this is because job openings have been unusually abundant
while the labour market’s capacity to match individual workers to available
jobs quickly has actually worsened. This capacity is referred to as matching
efficiency, and it started falling in the UK even before the 2008 recession.
Krishna
Regmi, Georgia College & State University: Examining the Externality of
Social Insurance: Unemployment Insurance and Children's Educational
Achievements. Exploiting
the large variation in the generosity of unemployment insurance (UI) benefits
across states and over time in the U.S., this paper investigates the link between
UI and children's academic outcomes. I use data from the Survey of Income and
Program Participation (SIPP) and the Current Population Survey (CPS), and create
two separate measures of academic outcomes: grade repetition, and high-school dropout
status, respectively. My estimates from the SIPP data show that a one percent
increase in maximum UI benefits decreases the probability of a child's grade
repetition by about 0.0005 percentage points, which is approximately 1.41
percent. Empirical finding from the CPS data is that a one percent increase in
maximum benefits reduces the probability that a student drops out of high
school by around 0.0018 percentage points, about 0.89 percent. This paper's findings,
which are the first in the literature to show evidence of a positive effect of
UI on children's educational outcomes, help us to understand the role of UI in
the human capital accumulation of children, and thus to devise an optimal level
of UI.
Eduardo
Porter, NYT: For Immigrants, America Is Still More Welcoming Than Europe. So why is it that immigrants in the United States —
including those here illegally — have managed to integrate far more
successfully into the American economy and social fabric than foreigners
arriving to the relatively coddled states of the European Union, where they
often enjoy access right away to a panoply of rights and benefits? The
difference is worth pondering. More immigrants buy into the American dream than
do native-born Americans. The employment rate of immigrants is higher than that
of natives. One in four of the economically active is out of work in France and
one in three in Belgium and Sweden. And these poor employment prospects persist
down the generations. Youth joblessness among the European-born children of
immigrants is almost 50 percent higher than for those with native-born parents.
Employment is not the only barrier. Children from less-educated immigrant
families are much less likely to succeed at school in Europe than the sons and
daughters of natives, and much more likely to end up marginalized: out of
school and out of work. Immigrants feel discriminated against more often in
Europe. Perceived discrimination is particularly acute among the European-born
children of immigrants, who in several countries still do not qualify for
automatic citizenship.
National
Academies of Sciences, Engineering, and Medicine: The Integration of Immigrants
into American Society. A committee of experts examined the available
research to assess how immigrants are integrating into American society in a
range of areas such as education, occupations, health, and language. As
immigrants and their descendants become integrated into U.S. society, many
aspects of their lives improve, including measurable outcomes such as
educational attainment, occupational distribution, income, and language
ability, but their well-being declines in the areas of health, crime, and
family patterns. At the same time, several factors impede immigrants’
integration into society, such as their legal status, racial disparities in
socio-economic outcomes, and low naturalization rates.
Sneha
Elango, Jorge Luis Garcia, James J. Heckman, Andres Hojman, NBER: Early
Childhood Education.
This paper organizes and synthesizes the literature on early childhood
education and childcare. In it, we go beyond meta-analysis and reanalyze
primary data sources in a common framework.
We consider the evidence from means-tested demonstration programs,
large-scale means-tested programs and universal programs without means testing.
We discuss which programs are beneficial and whether they are cost-effective
for certain populations. The evidence
from high-quality demonstration programs targeted toward disadvantaged children
shows beneficial effects. Returns exceed
costs, even accounting for the deadweight loss of collecting taxes. When proper policy counterfactuals are
constructed, Head Start has beneficial effects on disadvantaged children
compared to home alternatives. Universal programs benefit disadvantaged
children.
Michael Coelli, Domenico
Tabasso, IZA: Where Are the Returns to Lifelong Learning? We investigate the labour market determinants and
outcomes of adult participation in formal education (lifelong learning) in
Australia, a country with high levels of adult education. Employing
longitudinal data and fixed effects methods allows identification of effects on
outcomes free of ability bias. Different trends in outcomes across groups are
also allowed for. The impacts of adult education differ by gender and level of
study, with small or zero labour market returns in many cases. Wage rates only
increase for males undertaking university studies. For men, vocational
education and training (VET) lead to higher job satisfaction and fewer weekly
hours. For women, VET is linked to higher levels of satisfaction with
employment opportunities and higher employment probabilities.
Peter B. Berg et al, IZA:
The Relationship Between Establishment Training and the Retention of Older
Workers: Evidence from Germany .In the coming years, a substantial portion of Germany's workforce will
retire, making it difficult for businesses to meet human capital needs.
Training older workers may be a successful strategy for managing this
demographic transition. This study examines relationships between establishment
training programs, wages, and retirement among older men and women. Using
unique matched establishment-employee data from Germany, the authors find that
when establishments offer special training programs targeted at older workers,
women – and especially lower wage women – are less likely to retire. Results
suggest this relationship may be due to greater wage growth. For men, findings
suggest establishment offer of inclusion in standard training programs may
improve retention of low wage men, but analysis of pre-existing differences in
establishment retirement patterns suggests this relationship may not be causal.
Our research suggests targeted training programs likely play an important role
in retaining and advancing careers of low wage older women.
Facundo
Alvaredo, Tony Atkinson, Salvatore Morelli, VOX: The importance of wealth
concentration and why it is so difficult to measure. The concentration of personal wealth has received a
lot of attention since the publication of Thomas Piketty’s Capital in the 21st
Century. This column investigates the UK and finds wealth distribution to be
highly concentrated. The data seem to suggest that the top wealth share has
increased in the UK over the first decade of this century.
W.
Bradford Wilcox, Robert I. Lerman, Joseph Price, Brookings: Strong families,
prosperous states: Do healthy families affect the wealth of states? Economics has its roots in the Greek word oikonomia,
which means the “management of the household.” Yet economists across the
ideological spectrum have paid little attention to the links between household
family structure and the macroeconomic outcomes of nations, states, and
societies. This is a major oversight because, as this report shows, shifts in
marriage and family structure are important factors in states’ economic
performance, including their economic growth, economic mobility, child poverty,
and median family income.
Richard
V. Reeves, Brookings: Realism trumps purism. The report, Opportunity, Responsibility, and
Security: A Consensus Plan for Reducing Poverty and Restoring the American
Dream, is the result of a year’s work by scholars of different ideological
stripes and interests. Here are six of the ideas contained in the report which
could make a serious dent in poverty: 1. An increase in the minimum wage
(“large enough to substantially improve the rewards associated with work among
the less-skilled”). 2. Tougher work requirements in welfare, especially for
TANF and SNAP recipients. 3. More charter schools. 4. More resources to help
low-income students to and through college. 5. A clear public commitment to the
importance of marriage for raising children. 6. Greater access to contraception
and parenting support.
Raj
Chetty, Nathaniel Hendren, Harvard University: The Impacts of Neighborhoods on
Intergenerational Mobility Childhood Exposure Effects and County-Level
Estimates. To what
extent are children’s opportunities for upward economic mobility shaped by the
neighborhoods in which they grow up? We study this question using data from
de-identified tax records on more than five million children whose families
moved across counties between 1996 and 2012. The study consists of two parts.
In part one, we show that the area in which a child grows up has significant
causal effects on her prospects for upward mobility. In part two, we present
estimates of the causal effect of each county in the United States on a child’s
chances of success. Using these results, we identify the properties of high-
vs. low-opportunity areas to obtain insights into policies that can increase
economic opportunity.
Shilo
Rea, CMU: Not Mere Trickery: Effects of Behavioral Nudges Persist Despite
Disclosure. Nudging
people toward particular decisions by presenting one option as the default can
influence important life choices. However, many policymakers and some critics
of behavioral interventions have raised serious ethical concerns, arguing that
nudging people toward an option without their awareness is unethical, and that
defaults only work because people are not aware that they are being manipulated
by them. George Loewenstein investigated whether the common assumption that
defaults don’t work if people are aware of them is true. The researchers found
that warning people that they were about to be nudged, or informing them after
the fact and allowing them to change their decisions, did not significantly
diminish the effectiveness of the default option.
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