Kishore Mahbubani,
Lawrence H. Summers, Foreign Affairs: The Fusion of Civilizations. The Case for Global Optimism. To put it simply, the
great world civilizations, which used to have detached and separate identities,
now have increasingly overlapping areas of commonality. Most people around the
world now have the same aspirations as the Western middle classes: they want
their children to get good educations, land good jobs, and live happy,
productive lives as members of stable, peaceful communities. Instead of feeling
depressed, the West should be celebrating its phenomenal success at injecting
the key elements of its worldview into other great civilizations.
Ghazala Azmat et al. IZA: What You Don't Know... Can't
Hurt You? A Field Experiment on Relative Performance Feedback in Higher
Education. This paper studies the
effect of providing feedback to college students on their position in the grade
distribution by using a randomized control experiment. This information was
updated every six months during a three-year period. In the absence of treatment,
students' underestimate their position in the grade distribution. The treatment
significantly improves the students' self-assessment. We find that treated
students experience a significant decrease in their educational performance, as
measured by their accumulated GPA and number of exams passed, and a significant
improvement in their self-reported satisfaction, as measured by survey
responses obtained after information is provided but before students take their
exams. Those effects, however, are short lived, as students catch up in
subsequent periods. Moreover, the negative effect on performance is driven by
those students who underestimate their position in the absence of feedback.
Those students who overestimate initially their position, if anything, respond
positively.
Indivar
Dutta-Gupta et al., Georgetown Center
on Poverty and Inequality: Lessons Learned From 40 Years of Subsidized
Employment Programs. Subsidized
employment programs have a wide range of potential benefits. First, these
programs provide an important source of income to participating workers.
Second, a number of experimentally-evaluated subsidized employment programs
have successfully raised earnings and employment, with some programs providing
lasting labor market impacts.4 Such programs have also decreased family public
benefit receipt, raised school outcomes among the children of workers, boosted
workers’ school completion, lowered criminal justice system involvement among
both workers and their children, improved psychological well-being, and reduced
longer-term poverty. There may be additional positive effects, such as increased
child support.
Jutta
Viinikainen et al., IZA: Born Entrepreneur? Adolescents' Personality Characteristics and
Self-Employment in Adulthood. Is there an
entrepreneurial personality and does it appear early in life? We provide a new
answer on this question by using the so-called Type A behavior traits
(Aggression, Leadership, Responsibility, and Eagerness-Energy), measured in
childhood and adolescence, and examining their relationship to self-employment
propensity in adulthood. Using data from the Young Finns Study linked to the
Finnish Longitudinal Employer-Employee Data and the Longitudinal Population
Census of Statistics, our results show that the early-life Leadership-dimension
is significantly associated with a higher likelihood 1) of becoming
self-employed later in life and 2) of being more successful as an entrepreneur,
as approximated by sales. Our results also reinforce the prior evidence on the
intergenerational transmission of entrepreneurship.
David Andolfatto:
How old were the inventors of major inventions? I came across this fun column the other day listing a number of Famous
Inventions, like the airplane, the camera, electricity, the car, etc, along
with their inventors. A thought crossed my mind: how old were these inventors
when they invented these inventions? Were they young like Marconi, who invented
the radio in his early 20s? Or were they old like Gutenberg, who invented the
printing press in his early 50s? In short, is there an age demographic that is
responsible for producing major innovations? I have to admit, I was a little
surprised--the median age is 40 (I was expecting younger).
Dan Nixon, BoE:
Less is more: what does mindfulness mean for economics? Economic theory generally assumes that more
consumption means greater happiness. This post puts forward an alternative,
“less is more” perspective based around the concept of mindfulness. It argues
that we may achieve greater happiness by seeking to simplify our desires,
rather than satisfy them. The result – less consumption but greater wellbeing –
could be especially important for debates around secular stagnation and
ecological sustainability.
Holger Kirchmann, Lars Bergström,Thomas Kätterer, Rune
Andersson, Fri tanke (2014): Den ekologiska drömmen. Myter och sanningar om
ekologisk odling. Föreställningar om
att ekologisk odling är klimatsmart och ger bättre livsmedel är felaktiga. Hundra
procent ekologisk odling skulle vara en katastrof för framtida
livsmedelsförsörjning och innebär större belastning på miljön till en hög
kostnad. Konsumenterna får varken bättre livsmedel eller en bättre miljö om de
köper ekologiskt odlad mat. Ekologiska livsmedel är inte giftfria. Ekomaten är
inte heller nyttigare än konventionellt odlad mat. Ökad ekologisk odling
försämrar allvarligt livsmedelsförsörjningen, både i Sverige och globalt. Ekoodling
ger inte ett lägre utsläpp av näringsämnen till yt- och grundvatten. Ekoodling
är inte klimatsmart.
Fernando
Eguren-Martin, BoE: Friedman was right: flexible exchange rates do help
external rebalancing. Do exchange rate
regimes matter for the formation of countries’ external imbalances? Economists
have thought so for over sixty years, and policymakers have made countless
recommendations based on that presumption. But this had not been tested
empirically until very recently, so it remained an opinion rather than a
fact. In this post I show that having a
flexible exchange rate regime leads to the correction of external imbalances in
developing countries, offering some empirical support to a widely held belief.
In contrast, this does not seem to be the case for advanced economies.
Yi Che et al.,
NBER: Does Trade Liberalization with China Influence U.S. Elections? This paper examines the impact of trade liberalization on
U.S. Congressional elections. We find that U.S. counties subject to greater
competition from China via a change in U.S. trade policy exhibit relative
increases in turnout, the share of votes cast for Democrats and the probability
that the county is represented by a Democrat. We find that these changes are
consistent with Democrats in office during the period examined being more
likely than Republicans to support legislation limiting import competition or
favoring economic assistance.
Maria De Paola, Giorgio Brunello, IZA: Education as a
Tool for the Economic Integration of Migrants. We examine the role of education in fostering the economic integration
of immigrants. Although immigrants in Europe are – on average – slightly less
educated than native individuals, there is a large heterogeneity across
countries. We discuss evidence on student performance in international tests
showing that children with an immigrant background display worse results than
natives. While in some countries, such as Denmark and France, this gap is almost
entirely explained by differences in socio-economic background, in others
(Finland, Austria, Belgium and Portugal) the factors driving the gap are more
complex and have roots also outside socio-economic conditions. We investigate
how educational policies in the host count can affect the educational outcomes
of immigrants. We focus our attention on pre-school attendance, school
tracking, the combination of students and teacher characteristics, and class
composition.
Maria Caridad Araujo et al., IZA: Teacher Quality and
Learning Outcomes in Kindergarten. We assigned two cohorts of kindergarten students, totaling more than
24,000 children, to teachers within schools with a rule that is
as-good-as-random. We collected data on children at the beginning of the school
year, and applied 12 tests of math, language and executive function (EF) at the
end of the year. All teachers were filmed teaching for a full day, and the
videos were coded using a well-known classroom observation tool, the Classroom
Assessment Scoring System (or CLASS). We find substantial classroom effects: A
one-standard deviation increase in classroom quality results in 0.11, 0.11, and
0.07 standard deviation higher test scores in language, math, and EF,
respectively. Teacher behaviors, as measured by the CLASS, are associated with
higher test scores. Parents recognize better teachers, but do not change their
behaviors appreciably to take account of differences in teacher quality.
GAO: Shorter Life
Expectancy Reduces Projected Lifetime Benefits for Lower Earners. According to studies GAO reviewed, lower-income men
approaching retirement live, on average, 3.6 to 12.7 fewer years than
higher-income men. GAO developed hypothetical scenarios to calculate the
projected amount of lifetime Social Security retirement benefits received, on
average, for men with different income levels born in the same year. In these
scenarios, GAO compared projected benefits based on each income groups' shorter
or longer life expectancy with projected benefits based on average life
expectancy, and found that lower-income groups' shorter-than-average life
expectancy reduced their projected lifetime benefits by as much as 11 to 14
percent. Effects on Social Security retirement benefits are particularly
important to lower-income groups because Social Security is their primary
source of retirement income.
Allison Master et
al., Washington Post: Researchers explain how stereotypes keep girls out of
computer science classes. Despite valiant
efforts to recruit more women, the gender gap in the fields collectively known
as STEM — science, technology, engineering, and math — is not getting any
better. The gaps in computer science and engineering are the largest of any
major STEM discipline. Nationally, less than 20% of bachelor’s degrees in these
fields go to women. Women are missing out on great jobs, and society is missing
out on the innovations women could be making in new technology. Stereotypes are
a powerful force driving girls away from these fields. Even though stereotypes
are often inaccurate, children absorb them at an early age and are affected by
them.
Kacey Deamer,
Livescience: Time to Change Your Sheets? Bedbugs Have Favorite Colors. Do bedbugs prefer their hiding places to be a
certain color? Researchers conducted a series of tests in a lab to see if
bedbugs (Cimex lectularius) would favor different-colored harborages, or places
where pests seek shelter. The scientists found that bedbugs strongly prefer red
and black, and typically avoid colors like green and yellow.
Stanley Fischer,
FED: Reflections on Macroeconomics Then and Now. There is an old joke about our field--not the one
about the one-handed economist, nor the one about "assume you have a can
opener," nor the one that ends, "If I were you, I wouldn't start from
here." Rather it's the one about the Ph.D. economist who returns to his
university for his class's 50th reunion. He asks if he can see the most recent
Ph.D. generals exam. After a while it is brought to him. He reads it carefully,
looking perplexed, and then says, "But this is exactly the same as the
exam I wrote over 50 years ago." "Ah yes," says the professor.
"It is the same, but all the answers are different."
Gabriel
Chodorow-Reich, Loukas Karabarbounis, NBER: The Limited Macroeconomic Effects
of Unemployment Benefit Extensions. By how much does an extension of unemployment benefits affect macroeconomic
outcomes such as unemployment? Answering this question is challenging because
U.S. law extends benefits for states experiencing high unemployment. We use data revisions to decompose the
variation in the duration of benefits into the part coming from actual
differences in economic conditions and the part coming from measurement error
in the real-time data used to determine benefit extensions. Using only the variation coming from
measurement error, we find that benefit extensions have a limited influence on state-level
macroeconomic outcomes. We use our
estimates to quantify the effects of the increase in the duration of benefits
during the Great Recession and find that they increased the unemployment rate
by at most 0.3 percentage point.
Steven D. Levitt,
John A. List, Sally Sadoff, NBER: The Effect of Performance-Based Incentives on
Educational Achievement: Evidence from a Randomized Experiment. We test the effect of performance-based incentives on
educational achievement in a low-performing school district using a randomized field
experiment. High school freshmen were
provided monthly financial incentives for meeting an achievement standard based
on multiple measures of performance including attendance, behavior, grades and
standardized test scores. Within the
design, we compare the effectiveness of varying the recipient of the reward
(students or parents) and the incentive structure (fixed rate or lottery). While the overall effects of the incentives
are modest, the program has a large and significant impact among students on
the threshold of meeting the achievement standard. These students continue to outperform their
control group peers a year after the financial incentives end. However, the program effects fade in longer
term follow up, highlighting the importance of longer term tracking of incentive
programs.
Richard Blundell,
Michael Grabera, Magne Mogstad, JPE: Labor income dynamics and the insurance
from taxes, transfers, and the family. What do labor income dynamics look like over the life-cycle? We use
rich Norwegian population panel data to answer these important questions. We
find that the income processes differ systematically by age, skill level and
their interaction. To accurately describe labor income dynamics over the
life-cycle, it is necessary to allow for heterogeneity by education levels and
account for non-stationarity in age and time. Our findings suggest that the
redistributive nature of the Norwegian tax–transfer system plays a key role in
attenuating the magnitude and persistence of income shocks, especially among
the low skilled. By comparison, spouse's income matters less for the dynamics
of inequality over the life-cycle.
Jeffrey Sparshott,
WSJ: Do Cheaters Ever Prosper? A Lesson
From N.Y. Student Tests. A 2011 analysis
for The Wall Street Journal showed a bulge in New York City students’ test
scores right over the passing mark. The evidence strongly suggested teachers
were manipulating grades on statewide Regents Exams and helped spur changes to
testing procedures. Thomas Dee, a professor at Stanford University, updated the
numbers from his initial analysis after the state took steps to eliminate grade
inflation. The findings: Teachers who manipulated scores appear to have been
motivated by altruism, score manipulation was eliminated by 2012, and the
graduation gap between black and white students is about 5% larger in its
absence.
David Downs,
Scientific American: The Science behind the DEA's Long War on Marijuana. Experts say listing cannabis among the world’s
deadliest drugs ignores decades of scientific and medical data. But attempts to
delist it have met with decades of bureaucratic inertia and political
distortion. Speculation is growing about the possibility that the U.S. Drug
Enforcement Administration (DEA) will review by summer its “Schedule I”
designation of marijuana as equal to heroin among the world’s most dangerous
drugs.
Lawrence Summers,
Washington Post: What’s behind the revolt against global integration? The core of the revolt against global integration,
though, is not ignorance. It is a sense — unfortunately not wholly unwarranted
— that it is a project being carried out by elites for elites, with little
consideration for the interests of ordinary people. They see the globalization
agenda as being set by large companies that successfully play one country
against another. They read the revelations in the Panama Papers and conclude
that globalization offers a fortunate few opportunities to avoid taxes and
regulations that are not available to everyone else. And they see the kind of
disintegration that accompanies global integration as local communities suffer
when major employers lose out to foreign competitors.
Peter Dizikes, MIT
News: How network effects hurt economies. “Relatively small shocks can become magnified and then become shocks
you have to contend with [on a large scale],” says MIT economist Daron
Acemoglu. Study reveals how woes in one industry can harm others, too. The
findings run counter to “real business cycle theory,” which became popular in
the 1970s and holds that smaller, industry-specific effects tend to get swamped
by larger, economy-wide trends. More precisely, Acemoglu and his colleagues
have found cases where industry-specific problems lead to six-fold declines in
production across the U.S. economy as a whole. For example, for every dollar of
value-added growth lost in the manufacturing industries because of competition
from China, six dollars of value-added growth were lost in the U.S. economy as
a whole.
Roland G. Fryer,
Jr, NBER: The Production of Human Capital in Developed Countries: Evidence from
196 Randomized Field Experiments. Randomized field experiments designed to better understand the production
of human capital have increased exponentially over the past several
decades. This chapter summarizes what we
have learned about various partial derivatives of the human capital production function,
what important partial derivatives are left to be estimated, and what -
together - our collective efforts have taught us about how to produce human
capital in developed countries. The chapter
concludes with a back of the envelope simulation of how much of the racial wage
gap in America might be accounted for if human capital policy focused on best
practices gleaned from randomized field experiments.
Simen Markussen,
Knut Roed, IZA: The Market for Paid Sick Leave. In many countries, general practitioners (GPs) are assigned the task
of controlling the validity of their own patients' insurance claims. At the
same time, they operate in a market where patients are customers free to choose
their GP. Are these roles compatible? Can we trust that the gatekeeping
decisions are untainted by private economic interests? Based on administrative
registers from Norway with records on sick pay certification and GP-patient
relationships, we present evidence to the contrary: GPs are more lenient
gatekeepers the more competitive is the physician market, and a reputation for
lenient gatekeeping increases the demand for their services.
Raj Chetty, JAMA:
The Association Between Income and Life Expectancy in the United States. In the United States between 2001 and 2014, higher
income was associated with greater longevity, and differences in life
expectancy across income groups increased over time. However, the association
between life expectancy and income varied substantially across areas;
differences in longevity across income groups decreased in some areas and
increased in others. The differences in life expectancy were correlated with
health behaviors and local area characteristics.
Noah Smith,
Bloombergs: Decline of the U.S. Middle Class. The percentages of Americans who consider themselves working class has
stayed relatively stable. But the self-identified middle class has plunged by
about 10 percentage points, matched by an even larger increase in the
percentage of Americans who label themselves lower class. The self-identified
lower class should probably be included in the working class that gets
discussed in articles about Trump and Sanders.
Osea Giuntella, Fabrizio Mazzonna, IZA: If You Don't
Snooze You Lose: Evidence on Health and Weight. Most economic models consider sleeping as a pre-determined and
homogeneous constraint on individuals' time allocation neglecting its potential
effects on health and human capital. Several medical studies provide evidence
of important associations between sleep deprivation and health outcomes
suggesting a large impact on health care systems and individual productivity.
Yet, there is little causal analysis of the effects of sleep duration. This
paper uses a spatial regression discontinuity design to identify the effects of
sleep on health status, weight, and cognitive abilities. Our results suggest
that delaying morning work schedules and school start times may have
non-negligible effects on Health.
