MARS 9 2017

Heidi Glenn, NPR: America's 'Complacent Class': How Self-Segregation Is Leading To Stagnation. In a new book, The Complacent Class, economist Tyler Cowen argues that the United States is standing still. People have grown more risk averse and are reluctant to switch jobs or move to another state, he says, and the desire to innovate — to grow and change — has gone away. Cowen says he's worried that more and more communities are self-segregating — by income, education or race. "We're making decisions that are rational and even pleasurable from an individual point of view, but when everyone in society behaves this way — to cement in their own security, their own mobility — social mobility as a whole goes down, inequality goes up, many measures of segregation go up," he says. "And ultimately a bill for this comes due."

Lawrence Summers, FT: Robots are wealth creators and taxing them is illogical. The Microsoft co-founder is right about the gravity of the problem and need for action, but he is profoundly misguided in his proposed solution — and in ways that point up problems with the current public debate.First, I cannot see any logic to singling out robots as job destroyers. What about kiosks that dispense aeroplane boarding passes? Word processing programmes that accelerate the production of documents? Second, much innovative activity, even of a robot-like variety, involves producing better goods and services rather than simply extracting more output from the same input. Third, and perhaps most fundamentally, why tax in ways that reduce the size of the pie rather than ways that assure that the larger pie is well distributed? Imagine that 50 people can produce robots who will do the work of 100. A sufficiently high tax on robots would prevent them from being produced. Surely it would be better for society to instead enjoy the extra output and establish suitable taxes and transfers to protect displaced workers?

Mauricio Armellini, Tim Pike, BoE: Should economists be more concerned about Artificial Intelligence? This post highlights some of the possible economic implications of the so-called “Fourth Industrial Revolution” — whereby the use of new technologies and artificial intelligence (AI) threatens to transform entire industries and sectors. Some economists have argued that, like past technical change, this will not create large-scale unemployment, as labour gets reallocated. However, many technologists are less optimistic about the employment implications of AI.  In this blog post we argue that the potential for simultaneous and rapid disruption, coupled with the breadth of human functions that AI might replicate, may have profound implications for labour markets.  We conclude that economists should seriously consider the possibility that millions of people may be at risk of unemployment, should these technologies be widely adopted.

Eric Figueroa, CBPP: Unauthorized Immigrants Pay Greater Share of Income in State and Local Taxes Than Top Earners. Unauthorized immigrants pay a larger share of their income in state and local taxes than the nation’s top earners, and immigration reform would improve state and local finances across the country, a new report from the Institute on Taxation and Economic Policy (ITEP) finds.

Bernt Bratsberg, Oddbjørn Raaum, Knut Røed, IZA: Immigrant Labor Market Integration across Admission Classes. We examine patterns of labor market integration across immigrant groups. The study draws on Norwegian longitudinal administrative data covering labor earnings and social insurance claims over a 25-year period and presents a comprehensive picture of immigrant-native employment and social insurance differentials by admission class and by years since entry. For refugees and family immigrants from low-income source countries, we uncover encouraging signs of labor market integration during an initial period upon admission, but after just 5-10 years, the integration process goes into reverse with widening immigrant-native employment differentials and rising rates of immigrant social insurance dependency. Yet, the analysis reveals substantial heterogeneity within admission class and points to an important role of host-country schooling for successful immigrant labor market integration.

Robert W. Fairlie, Ariel Kalil, IZA: The Effects of Computers on Children's Social Development and School Participation: Evidence from a Randomized Control Experiment. Concerns over the perceived negative impacts of computers on social development among children are prevalent but largely uninformed by plausibly causal evidence. We provide the first test of this hypothesis using a large-scale randomized control experiment in which more than one thousand children attending grades 6-10 across 15 different schools and 5 school districts in California were randomly given computers to use at home. Children in the treatment group are more likely to report having a social networking site, but also report spending more time communicating with their friends and interacting with their friends in person. There is no evidence that computer ownership displaces participation in after-school activities such as sports teams or clubs or reduces school participation and engagement.

Hannah Devlin, the Guardian: How much pee is in our swimming pools? New urine test reveals the truth.  It is an antisocial act that normally goes under the radar, but many swimmers have long suspected the truth: people are peeing in the pool. Now scientists have been able to confirm the full extent of offending for the first time, after developing a test designed to estimate how much urine has been covertly added to a large volume of water. The test works by measuring the concentration of an artificial sweetener, acesulfame potassium (ACE), that is commonly found in processed food and passes through the body unaltered. After tracking the levels of the sweetener in two public pools in Canada over a three-week period they calculated that swimmers had released 75 litres of urine – enough to fill a medium-sized dustbin – into a large pool (about 830,000 litres, one-third the size of an Olympic pool) and 30 litres into a second pool, around half the size of the first.