Maurice Obstfeld,
Gian Maria Milesi-Ferretti, Rabah Arezki, IMF: Oil Prices and the Global
Economy: It’s Complicated. Even
though oil is a less important production input than it was three decades ago,
that reasoning should work in reverse when oil prices fall, leading to lower
production costs, more hiring, and reduced inflation. But this channel causes a
problem when central banks cannot lower interest rates. Because the policy
interest rate cannot fall further, the decline in inflation (actual and
expected) owing to lower production costs raises the real rate of interest,
compressing demand and very possibly stifling any increase in output and
employment. Indeed, those aggregates may both actually fall. Something like
this may be going on at the present time in some economies.
Hans-Werner Sinn,
Project Syndicate: Europe’s Emerging Bubbles. But the worst effects of the ECB policy may be yet to come, if the
eurozone’s still-sound economies also become credit junkies. There are already
some worrying signs of this. Property markets in Austria, Germany, and
Luxembourg have practically exploded throughout the crisis, as a result of
banks chasing borrowers with offers of loans at near-zero interest rates,
regardless of their creditworthiness. In Austria, property prices have risen by
nearly half since the Lehman collapse; in Luxembourg, they have risen by almost
one-third. Even Germany, Europe’s largest economy, has been experiencing a
massive property boom since 2010, with average urban property prices having
risen by more than one-third – and by nearly half in large cities. The country
is undergoing a construction boom not seen since reunification. Real estate
agents have only leftovers on offer.
Judd Cramer, Alan
B. Krueger, NBER: Disruptive Change in the Taxi Business: The Case of Uber. In most cities, the taxi industry is highly regulated
and utilizes technology developed in the 1940s. Ride sharing services such as
Uber and Lyft, which use modern internet-based mobile technology to connect
passengers and drivers, have begun to compete with traditional taxis. This
paper examines the efficiency of ride sharing services vis-à-vis taxis by
comparing the capacity utilization rate of UberX drivers with that of
traditional taxi drivers in five cities. The capacity utilization rate is
measured by the fraction of time a driver has a fare-paying passenger in the
car while he or she is working, and by the share of total miles that drivers
log in which a passenger is in their car. The main conclusion is that, in most
cities with data available, UberX drivers spend a significantly higher fraction
of their time, and drive a substantially higher share of miles, with a
passenger in their car than do taxi drivers. Four factors likely contribute to
the higher capacity utilization rate of UberX drivers: 1) Uber’s more efficient
driver-passenger matching technology; 2) the larger scale of Uber than taxi
companies; 3) inefficient taxi regulations; and 4) Uber’s flexible labor supply
model and surge pricing more closely match supply with demand throughout the
day.
Stefan Bender,
Nicholas Bloom, David Card, John Van Reenen, Stefanie Wolter, NBER: Management
Practices, Workforce Selection and Productivity. Recent research suggests that much of the cross-firm
variation in measured productivity is due to differences in use of advanced
management practices. We use a unique data set that combines detailed survey
data on the management practices of German manufacturing firms with
longitudinal earnings records for their employees to study the relationship
between productivity, management, worker ability, and pay. In our preferred TFP estimates only a small
fraction of this correlation is explained by the higher human capital of the
average employee at better-managed firms. Overall, we conclude that workforce selection
and positive pay premiums explain just under 30% of the measured impact of
management practices on productivity in German manufacturing.
Kai Rehwald, Michael Rosholm, Benedicte Rouland, IZA:
Does Activating Sick-Listed Workers Work? Evidence from a Randomized
Experiment. Using data from a large-scale
randomized controlled trial conducted in Danish job centers, this paper
investigates the effects of an intensification of mandatory return-to-work
activities on the subsequent labor market outcomes for sick-listed workers.
Using variations in local treatment strategies, both between job centers and
between randomly assigned treatment and control groups within a given job
center, we compare the relative effectiveness of alternative interventions. Our
results show that the use of partial sick leave increases the length of time
spent in regular employment and non-reliance on benefits, and also reduces the
time spent in unemployment. Traditional active labor market programs and the
use of paramedical care appear to have no effect at all, or even an adverse
effect.
Claudia Olivetti,
M. Daniele Paserman, Laura Salisbury, NBER: Three-generation Mobility in the
United States, 1850-1940: The Role of Maternal and Paternal Grandparents. This paper estimates intergenerational elasticities
across three generations in the United States in the late 19th and early 20th
centuries. We extend the methodology in
Olivetti and Paserman (2015) to explore the role of maternal and paternal
grandfathers for the transmission of economic status to grandsons and
granddaughters. We document three main
findings. First, grandfathers matter for
income transmission, above and beyond their effect on fathers' income. Second,
the socio-economic status of grandsons is influenced more strongly by paternal
grandfathers than by maternal grandfathers. Third, maternal grandfathers are
more important for granddaughters than for grandsons, while the opposite is
true for paternal grandfathers.
Meritkotkas. In Estonia you can on streaming camera follow a sea
eagle couple with eggs in the windy coast, waiting for their chicks to creep
out. Link for Apple
U.S. Department of
Energy: Impact of Extended Daylight Saving Time on National Energy Consumption. The total electricity savings of Extended Daylight
Saving Time were about 1.3 Tera Watt-hour (TWh). This corresponds to 0.5
percent per each day of Extended Daylight Saving Time, or 0.03 percent of
electricity consumption over the year. In reference, the total 2007 electricity
consumption in the United States was 3,900 TWh.
Myriam B.C. Aries,
Guy R. Newsham, Energy Policy: Effect of daylight saving time on lighting
energy use: A literature review. The principal reason for introducing (and extending) daylight saving
time (DST) was, and still is, projected energy savings, particularly for
electric lighting. Simple estimates suggest a reduction in national electricity
use of around 0.5%, as a result of residential lighting reduction. Several
studies have demonstrated effects of this size based on more complex
simulations or on measured data. However, there are just as many studies that
suggest no effect, and some studies suggest overall energy penalties,
particularly if gasoline consumption is accounted for. There is general
consensus that DST does contribute to an evening reduction in peak demand for
electricity, though this may be offset by an increase in the morning.
Nevertheless, the basic patterns of energy use, and the energy efficiency of
buildings and equipment have changed since many of these studies were conducted.
Ryan Kellogg, Hendrik Wolff, IZA: Does Extending
Daylight Saving Time Save Energy? Evidence from an Australian Experiment. Several countries are considering extending Daylight
Saving Time (DST) in order to conserve energy, and the U.S. will extend DST by
one month beginning in 2007. However, projections that these extensions will
reduce electricity consumption rely on extrapolations and simulations rather
than empirical evidence. This paper, in contrast, examines a quasiexperiment in
which parts of Australia extended DST in 2000 to facilitate the Sydney Olympics.
Using detailed panel data and a triple differences specification, we show that
the extension did not conserve electricity, and that a prominent
simulation model overstates electricity savings when it is applied to
Australia.
Christopher M.
Barnes David T. Wagner, NYT: The Economic Toll of Daylight Saving Time. In a study of mining injuries across the U.S., we
found a spike in workplace injuries of nearly 6 percent on the Monday following
the shift to daylight saving time. In a follow-up study we found that workers
tend to “cyberloaf” – that is, they use their computers and internet access to
engage in activities that are not related to work – at a substantially higher
rate on the Monday following the shift to daylight saving time than on other
Mondays. What’s more, we found that for every hour of interrupted sleep the
previous night, participants in our lab cyberloafed for 20 percent of their
assigned task. When extrapolated to a full day’s work, that would mean daylight
saving time and lost sleep can result in substantial productivity losses. In
fact, a recent estimate of this effect put the cost to the American economy at
over $434 million annually, simply from a subtle shift of the clocks.
Mark J. Kamstra,
Lisa A. Kramer, Maurice D. Levi, York University: Losing Sleep at the Market:
The Daylight-Savings Anomaly. We explore
the connection between equity returns and sleep disruptions following
daylight-savings time changes. In international markets, the average
Friday-to-Monday return on daylight-savings weekends is markedly lower than
expected, with a magnitude 200 to 500 percent larger than the average negative
return for other weekends of the year. This ``daylight-savings anomaly'' in
financial markets is consistent with desynchronosis research which has
identified the effects of changes in sleep patterns on judgment, anxiety, reaction
time, problem solving and accidents. This paper suggests sleep effects of
daylight-savings time changes may be impacting market participants
internationally.
Jin, L., Nicolas
Ziebarth, University of York: Sleep and Human Capital: Evidence from Daylight
Saving Time. This paper is one of the
first to test for a causal relationship between sleep and human capital. It
exploits the quasi-experimental nature of Daylight Saving Time (DST), up to 3.4
million BRFSS respondents from the US, and all 160 million hospital admissions
from Germany over one decade. We find evidence of mild negative health effects
when clocks are set forward one hour in spring. When clocks are set back one
hour in fall, effectively extending sleep duration for the sleep deprived by
one hour, sleep duration and selfreported health increase and hospital
admissions decrease significantly for four days.
Daniel Kuehnle,
Christoph Wunder, Friedrich-Alexander-University Erlangen-Nuremberg: Using the
life satisfaction approach to value daylight savings time transitions. Evidence
from Britain and Germany. Daylight savings
time (DST) represents a public good with costs and benefits. We provide the
first comprehensive examination of the welfare effects of the spring and autumn
transitions for the UK and Germany. Using individual-level data and a
regression discontinuity design, we estimate the effect of the transitions on
life satisfaction. Our results show that individuals in both the UK and Germany
experience deteriorations in life satisfaction in the first week after the spring
transition. We find no effect of the autumn transition. We attribute the
negative effect of the spring transition to the reduction in the time endowment
and the process of adjusting to the disruption in circadian rhythms. The
effects are particularly strong for individuals with young children in the
household. We conclude that the higher the shadow price of time, the more difficult
is adjustment. Presumably, an increase in flexibility to reallocate time could
reduce the welfare loss for individuals with binding time constraints.
Stanley Coren,
University of British Columbia: Daylight Savings Time and Traffic Accidents. We used data from a tabulation of all traffic
accidents in Canada as they were reported to the Canadian Ministry of Transport
for the years 1991 and 1992 by all 10 provinces. A total of 1,398,784 accidents
were coded according to the date of occurrence. The spring shift to daylight
savings time, and the concomitant loss of one hour of sleep, resulted in an
average increase in traffic accidents of approximately 8 percent, whereas the
fall shift resulted in a decrease in accidents of approximately the same
magnitude immediately after the time shift.
Tuuli Lahti, Esa
Nysten, Jari Haukka, Pekka Sulander, Timo Partonen, National Institute for
Health and Welfare: Daylight Saving Time Transitions and Road Traffic
Accidents. Circadian rhythm disruptions
may have harmful impacts on health. Circadian rhythm disruptions caused by jet
lag compromise the quality and amount of sleep and may lead to a variety of
symptoms such as fatigue, headache, and loss of attention and alertness. Even a
minor change in time schedule may cause considerable stress for the body.
Transitions into and out of daylight saving time alter the social and
environmental timing twice a year. According to earlier studies, this change in
time-schedule leads to sleep disruption and fragmentation of the circadian
rhythm. Since sleep deprivation decreases motivation, attention, and alertness,
transitions into and out of daylight saving time may increase the amount of
accidents during the following days after the transition.We studied the amount
of road traffic accidents one week before and one week after transitions into
and out of daylight saving time during years from 1981 to 2006. Our results
demonstrated that transitions into and out of daylight saving time did not increase
the number of traffic road accidents.
Cathleen D. Zick,
ISPAH: Does Daylight Savings Time Encourage Physical Activity? Extending Daylight Savings Time (DST) has been
identified as a policy intervention that may encourage physical activity.
However, there has been little research on the question of if DST encourages
adults to be more physically active. Data from residents of Arizona, Colorado,
New Mexico, and Utah ages 18–64 who participated in the 2003–2009 American Time
Use Survey are used to assess whether DST is associated with increased time
spent in moderate-to-vigorous physical activity (MVPA). The analysis
capitalizes on the natural experiment created because Arizona does not observe
DST. Both bivariate and multivariate analyses indicate that shifting 1 hour of
daylight from morning to evening does not impact MVPA of Americans living in
the southwest.
Jennifer L.
Doleac, Nicholas J. Sanders, University of Virginia: Under the Cover of
Darkness: How Ambient Light Influences Criminal Activity. We exploit daylight saving time (DST) as an exogenous
shock to daylight, using both the discontinuous nature of the policy and the
2007 extension of DST, to consider the impact of light on criminal activity.
Regression discontinuity estimates show a 7% decrease in robberies following
the shift to DST. As expected, effects are largest during the hours directly
affected by the shift in daylight. We discuss our findings within the context
of criminal decision making and labor supply, and estimate that the 2007 DST
extension resulted in $59 million in annual social cost savings from avoided
robberies.
Yvonne Harrison,
Sleep Medicine: The impact of daylight saving time on sleep and related
behaviours. Daylight saving time is
currently adopted in over 70 countries and imposes a twice yearly 1 h change in
local clock time. Relative ease in adjustment of sleep patterns is assumed by
the general population but this review suggests that the scientific data
challenge a popular understanding of the clock change periods. The start of
daylight saving time in the spring is thought to lead to the relatively
inconsequential loss of 1 h of sleep on the night of the transition, but data
suggests that increased sleep fragmentation and sleep latency present a cumulative
effect of sleep loss, at least across the following week, perhaps longer. The
autumn transition is often popularised as a gain of 1 h of sleep but there is
little evidence of extra sleep on that night. The cumulative effect of five
consecutive days of earlier rise times following the autumn change again
suggests a net loss of sleep across the week. Indirect evidence of an increase
in traffic accident rates, and change in health and regulatory behaviours which
may be related to sleep disruption suggest that adjustment to daylight saving
time is neither immediate nor without consequence.
Imre Janszky et
al., Sleep Medicine: Daylight saving time shifts and incidence of acute
myocardial infarction – Swedish Register of Information and Knowledge About
Swedish Heart Intensive Care Admissions (RIKS-HIA). Daylight saving time shifts can be looked upon as
large-scale natural experiments to study the effects of acute minor sleep
deprivation and circadian rhythm disturbances. To identify AMI incidence on
specific dates, we used the Register of Information and Knowledge about Swedish
Heart Intensive Care Admission, a national register of coronary care unit
admissions in Sweden. We compared AMI incidence on the first seven days after
the transition with mean incidence during control periods. To assess effect
modification, we calculated the incidence ratios in strata defined by patient
characteristics. Overall, we found an elevated incidence ratio of 1.039 (95%
confidence interval, 1.003–1.075) for the first week after the spring clock
shift forward. The higher risk tended to be more pronounced among individuals
taking cardiac medications and having low cholesterol and triglycerides. There
was no statistically significant change in AMI incidence following the autumn
shift.
Imre Janszky,
Rickard Ljung: Karolinska Institute: Shifts to and from Daylight Saving Time
and Incidence of Myocardial Infarction. The incidence of acute myocardial infarction was significantly
increased for the first 3 weekdays after the transition to daylight saving time
in the spring. The incidence ratio for the first week after the spring shift,
calculated as the incidence for all 7 days divided by the mean of the weekly
incidences 2 weeks before and 2 weeks after, was 1.051 (95% confidence interval
[CI], 1.032 to 1.071). In contrast, after the transition out of daylight saving
time in the autumn, only the first weekday was affected significantly.
Rasmussen Report:
Just 33% See the Purpose of Daylight Saving Time. Only 33% of American Adults think DST is worth the
hassle, according to a 2014 national telephone survey. That is down from 37%
last year at this time and 45% in 2012. Forty-eight percent (48%) do not think
the clock changing ritual is worth it, but 19% are not sure.
Erika Hallhagen, SvD: Våga vägra sommartid. Så är den här.
Morgonmänniskornas högtid nummer ett. Dagen då de får beröva oss ännu en timme
skönhetssömn, trots att vi redan dansar efter deras pipa och börjar jobbet
långt innan vi är vakna. Här är sju argument som klargör varför ett
maktövertagande är det enda rätta. Det enda argumentet du behöver. Donald Trump
är morgonmänniska.
David Andolfatto,
Macromania: Secular stagnation then and now. Secular stagnation refers to a prolonged and indefinite period of slow
growth and high unemployment (or subnormal factor utilization). When was the
last time this happened in the United States? Most people are likely to say the
1930s. In fact, it was the 1970s.
Reuven
Glick, Andrew K. Rose, San Francisco Fed: How Much Does the EMU Benefit Trade? The economic benefits of sharing a currency like the
euro continue to be debated. In theory, countries that use the same currency
face lower trade costs and exchange rate risk and are able to compare prices
across borders more easily. These advantages should help increase trade among
the economies involved. New estimates suggest that this has been the case in
Europe, though perhaps to a lesser degree than previously thought.
George J. Borjas,
LaborEcon: Employment of Undocumented Immigrants. Using newly developed methods that attempt to
identify undocumented status for foreign-born persons sampled in the Current
Population Surveys, the empirical analysis documents a number of findings,
including the fact that the work propensity of undocumented men is much larger
than that of other groups in the population; that this gap has grown over the
past two decades; and that the labor supply elasticity of undocumented men is
very close to zero, suggesting that their labor supply is almost perfectly
inelastic.
OECD:
Low-Performing Students. Why They Fall Behind and How To Help Them Succeed. Analyses show that poor performance at age 15 is not
the result of any single risk factor, but rather of a combination and
accumulation of various barriers and disadvantages that affect students throughout
their lives. Who is most likely to be a low performer in mathematics? On
average across OECD countries, a socio-economically disadvantaged girl who
lives in a single-parent family in a rural area, has an immigrant background,
speaks a different language at home from the language. Among low performers the
combination of risk factors is more detrimental to disadvantaged than to
advantaged students. Low performers tend to have less perseverance,
motivation and self-confidence in mathematics than better-performing students,
and they skip classes or days of school more. Students whose teachers have low
expectations for them and are absent more often are more likely to be low
performers in mathematics, even after accounting for the socio-economic status
of students and schools.
Erik Bengtsson, Daniel Waldenström, IZA: Capital
Shares and Income inequality: Evidence from the Long Run. This paper investigates the relationship between the
capital share in national income and personal income inequality over the long
run. Using a new historical cross-country database on capital shares in 19
countries and data from the World Wealth and Income Database, we find strong
long-run links between the aggregate role of capital in the economy and the
size distribution of income. Over time, this dependence varies; it was strong
both before the Second World War and in the early interwar era, but has grown
to its highest levels in the period since 1980. The correlation is particularly
strong in Anglo-Saxon and Nordic countries, in the very top of the distribution
and when we only consider top capital incomes. Replacing top income shares with
a broader measure of inequality (Gini coefficient), the positive relationship
re-mains but becomes somewhat weaker.
Erzo F.P. Luttmer,
Andrew A. Samwick, NBER: The Welfare Cost of Perceived Policy Uncertainty:
Evidence from Social Security. Policy
uncertainty can reduce individual welfare when individuals have limited
opportunities to mitigate or insure against consumption fluctuations induced by
the policy uncertainty. For this reason, policy uncertainty surrounding future
Social Security benefits may have important welfare costs. We field an original
survey to measure the degree of policy uncertainty in Social Security and to
estimate the impact of this uncertainty on individual welfare. On average, our
survey respondents expect to receive only about 60 percent of the benefits they
are supposed to get under current law. We document the wide variation around
the expectation for most respondents and the heterogeneity in the perceived
distributions of future benefits across respondents. This uncertainty has real
costs. Our central estimates show that on average individuals would be willing
to forego around 6 percent of the benefits they are supposed to get under
current law to remove the policy uncertainty associated with their future
benefits. This translates to a risk premium from policy uncertainty equal to 10
percent of expected benefits.
Madhumita Murgia,
The Telegraph: Algorithm can predict your marital success from your voice. A new computer algorithm can predict whether a
married couple's relationship improved or worsened over time, based on their
tone of voice when speaking to each other. In fact, the algorithm - which was
correct 79 per cent of the time - was more accurate than session notes provided
by therapists, when predicting marital success of couples with serious
relationship issues.
Lizzie Drapper,
Hasdeep Sethi, BoE: Houses: who has stopped buying them? In 2006, 64 English houses in every 1000 changed
hands. Three years and a credit crunch later, this had halved to only 32
transactions per 1000 houses. Since 2009, transactions have recovered, but
remain well below their pre-crisis level. Transactions are a key metric of the
health of the UK housing market and can be seen as a measure of “liquidity”.
The reasons behind low transactions levels may also provide further insight
into people’s behaviour and view of housing in the UK. In the work set out
below, we conclude that it is unlikely that transactions regain their
pre-crisis level any time soon, because of affordability constraints for
first-time buyers and fewer discretionary moves by existing owners.
Valeria
Pellegrini, Alessandra Sanelli, Enrico Tosti, VOX: Unreported assets held
abroad and tax evasion: Hints from external statistics. Balance of payments statistics suggest that assets
held abroad are greatly underestimated – particularly for mutual fund shares
and bank deposits. This column looks into the role played by tax havens and
estimates that unreported financial assets amount to between $6 and $7
trillion. On this figure, the related tax evasion is between $19 and $38
billion a year on capital income, and between $2 and $2.6 trillion on personal
income. Recent policy initiatives such as automatic information exchanges
constitute real progress, but some critical aspects might jeopardise their
effectiveness.
Bruno Van der
Linden, IZA: Do in-work benefits work for low-skilled workers? Permanent in-work benefits (IWB) often increase labor
force participation by single mothers and reduce in-work poverty. In the UK and
the US, these effects appear to be accompanied by improved indicators of health
and life satisfaction for the beneficiaries, as well as some positive effects
detected on their children. There is also a broad consensus that IWB can
improve the redistribution of income. Still, IWB have a negative impact on low
wages in the absence of downward wage rigidities, which reduces their redistribution
effects.
Jane Waldfogel,
Columbia University: The role of preschool in reducing inequality. Preschool improves child outcomes, especially for
disadvantaged children. Evidence on the potential of preschool programs to
reduce inequality in child development is quite strong. It has been clear for
some time that small model preschool programs can lead to substantial
improvements in school readiness for children from disadvantaged backgrounds
who would otherwise have little access to high-quality early childhood care or
education and who have the most to gain from high-quality programs. This early
evidence suggested that preschool might be an effective way to reduce
inequality.
Joao Pedro Jerico
et al., Cornell: When does inequality freeze an economy? Inequality and its consequences are the subject of
intense recent debate. We address the relation between inequality and
liquidity, i.e. the frequency of economic exchanges in the economy. We do that
within an intentionally simplified model of the economy, where all exchanges
that are compatible with agents' budget constraints are possible. Assuming a
Pareto distribution of capital for the agents, that is consistent with
empirical findings, we find an inverse relation between inequality and
liquidity. By quantifying the amount of inequality in the system by the
exponent of the Pareto distribution, we show that an increase in inequality of
capital results in an even sharper concentration of financial resources,
leading to congestion of the flow of goods and the arrest of the economy when
the Pareto exponent reaches one.
Branko Milanovic,
VOX: Introducing Kuznets waves: How income inequality waxes and wanes over the
very long run. The Kuznets
curve was widely used to describe the relationship between growth and
inequality over the second half of the 20th century, but it has fallen out of
favour in recent decades. This column suggests that the current upswing in
inequality can be viewed as a second Kuznets curve. It is driven, like the
first, by technological progress, inter-sectoral reallocation of labour,
globalisation, and policy. The author argues that the US has still not reached
the peak of inequality in this second Kuznets wave of the modern era.
Paul Krugman, NYT:
Return of the Undeserving Poor. When I
was growing up, there was a great deal of alarm over the troubles of the
African-American community, where social disorder was on the rise even as
explicit legal discrimination (although not de facto discrimination) was coming
to an end. What was going on? William Julius Wilson argued that the underlying
cause was economic: good jobs, while still fairly plentiful in America as a
whole, were disappearing from the urban centers where the A-A population was
concentrated. And the social collapse, while real, followed from that
underlying cause. This story contained a clear prediction — namely, that if
whites were to face a similar disappearance of opportunity, they would develop
similar behavior patterns. And sure enough, with the hollowing out of the
middle class, we saw what Kevin Williamson describes as the welfare dependency,
the drug and alcohol addiction, the family anarchy.
Jessica Tyrrell,
BMJ: Height, body mass index, and socioeconomic status: mendelian randomisation
study in UK Biobank. These data
support evidence that height and BMI play an important partial role in
determining several aspects of a person’s socioeconomic status, especially
women’s BMI for income and deprivation and men’s height for education, income,
and job class. These findings have important social and health implications,
supporting evidence that overweight people, especially women, are at a
disadvantage and that taller people, especially men, are at an advantage.
