Wednesday, February 21, 2018

DECEMBER 28 2017

Grace Lordan, David Neumark, NBER: People Versus Machines: The Impact of Minimum Wages on Automatable Jobs. We study the effect of minimum wage increases on employment in automatable jobs – jobs in which employers may find it easier to substitute machines for people – focusing on low-skilled workers from whom such substitution may be spurred by minimum wage increases. Based on CPS data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become unemployed. The average effects mask significant heterogeneity by industry and demographic group, including substantive adverse effects for older, low-skilled workers in manufacturing. The findings imply that groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.

Manudeep Bhuller, Magne Mogstad, Kjell G. Salvanes, NHH: Life Cycle Earnings, Education Premiums and Internal Rates of Return. This paper exploits Norwegian population panel data with nearly career long earnings histories to answer these important questions. We provide a detailed picture of the causal relationship between schooling and earnings over the life cycle, following individuals over their working lifespan. To account for endogeneity of schooling, we apply three commonly used identification strategies. Our estimates show that additional schooling gives higher lifetime earnings and steeper age-earnings profile, in line with predictions from human capital theory. These estimates imply an internal rate of return of around 10 percent, after taking into account income taxes and earnings-related pension entitlements. Under standard conditions, this finding suggests it was financially profitable to take additional schooling because the rates of return were substantially higher than the market interest rates.
Øystein Hernæs,  Simen Markussen, Knut Røed, JHR: Television, Cognitive Ability, and High School Completion. We exploit supply-driven heterogeneity in the expansion of cable television across Norwegian municipalities to identify developmental effects of commercial television exposure during childhood. We find that higher exposure to commercial television reduces cognitive ability and high school graduation rates for boys. The effects appear to be driven by consumption of light television entertainment crowding out more cognitively stimulating activities. Point estimates suggest that the effects are most negative for boys from more educated families. We find no effect on high school completion for girls, pointing to the growth of non-educational media as a factor in the widening educational gender gap.
Øystein Hernaes, IZA: Activation against Absenteeism: Evidence from a Sickness Insurance Reform in Norway. I evaluate a program aimed at strictly enforcing a requirement that people on long-term sick leave be partly back at work unless explicitly defined as an exception. Employing the synthetic control method, I find that the reform reduced work-hours lost due to absenteeism by 12 % in the reform region compared to a comparison unit created by a weighted average of similar regions. The effect is driven by both increased part-time presence of temporary disabled workers and accelerated recovery. Musculoskeletal disorders was the diagnosis group declining the most. The findings imply large savings in social security expenditures.
Miles Corak, IZA: ‘Inequality Is the Root of Social Evil,’or Maybe Not? Two Stories about Inequality and Public Policy. Income inequality is on the rise, and everyone, from President Obama and Pope Francis to Prince Charles and Standard & Poor's, is talking about it. But these conversations about what are arguably the most significant changes in the distribution of incomes and earnings since the 1940s are leading to very different views on how public policy should respond. This is as true in Canada as it is in almost all of the other rich countries where inequality has risen. In this paper I tell two stories about inequality – one from the perspective of those who feel it is not a problem worth the worry, and the other from the perspective of those who see it as "the defining challenge of our time" – in order to clarify the issues facing Canadians, and what public policy should do about them.
James Suzman, Guardian: How Neolithic farming sowed the seeds of modern inequality 10,000 years ago. A recent research paper examining inequality in early Neolithic societies confirms what early-20th century anthropologists already knew, on the basis of comparative studies of farming societies: that the greater the surpluses a society produced, the greater the levels of inequality in that society. The new research maps the relative sizes of people’s homes in 63 Neolithic societies between 9000BC and 1500 AD. It finds a clear correlation between levels of material inequality – based on the size of household dwellings in each community – and the use of draught animals, which enabled people to put far greater energy into their fields.
Wenqi Wei et al., Nature: Regional ambient temperature is associated with human personality. Human personality traits differ across geographical regions. However, it remains unclear what generates these geographical personality differences. Because humans constantly experience and react to ambient temperature, we propose that temperature is a crucial environmental factor that is associated with individuals’ habitual behavioural patterns and, therefore, with fundamental dimensions of personality. To test the relationship between ambient temperature and personality, we conducted two large-scale studies in two geographically large yet culturally distinct countries: China and the United States. Using data from 59 Chinese cities (N = 5,587), multilevel analyses and machine learning analyses revealed that compared with individuals who grew up in regions with less clement temperatures, individuals who grew up in regions with more clement temperatures (that is, closer to 22 °C) scored higher on personality factors related to socialization and stability (agreeableness, conscientiousness, and emotional stability) and personal growth and plasticity (extraversion and openness to experience). Taken together, our findings provide a perspective on how and why personalities vary across geographical regions beyond past theories (subsistence style theory, selective migration theory and pathogen prevalence theory). As climate change continues across the world, we may also observe concomitant changes in human personality.

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