FEBRUARY 8 2017

Noëmie Lisack, Rana Sajedi and Gregory Thwaites, BoE: Population ageing and the macroeconomy. An unprecedented ageing process is unfolding in industrialised economies. The share of the population over 65 has gone from 8% in 1950 to almost 20% in 2015, and is projected to keep rising. What are the macroeconomic implications of this change? What should we expect in the coming years? In a recent staff working paper, we link population ageing to several key economic trends over the last half century: the decline in real interest rates, the rise in house prices and household debt, and the pattern of foreign asset holdings among advanced economies. The effects of demographic change are not expected to reverse so long as longevity, and in particular the average time spent in retirement, remains high.

Elva Bova, Tidiane Kinda, Jaejoon Woo, VOX: Austerity and inequality: The size and composition of fiscal adjustment matter. Understanding the distributional consequences of fiscal adjustment measures is important for equity, but also to ensure the sustainability of the measures. This column shows that fiscal adjustments increase inequality, including through unemployment. Spending-based adjustments worsen inequality more significantly than tax-based adjustments. Progressive taxation and targeted social benefits and subsidies introduced in the context of a broader decline in spending can help offset some of the distributional impact of fiscal adjustments.

Camille Landais, Arash Nekoei, J Peter Nilsson, David Seim, Johannes Spinnewijn, VOX: Unemployment insurance and adverse selection: Evidence from Sweden. Unemployment insurance is compulsory in almost all countries, with no choice for workers over the level of coverage. But why restrict choice if it can improve the targeting of individuals who value the insurance the most? This column uses evidence from Sweden to examine whether the issue of adverse selection justifies a universal mandate for unemployment insurance. Workers who purchased more generous unemployment insurance were more than twice as likely to be unemployed in the following year. A universal mandate combats such adverse selection, but forces workers to buy insurance even when insurance costs are higher than the value they assign to it.

Kenneth Rogoff, Project Syndicate: When Will Tech Disrupt Higher Education? Universities pride themselves on producing creative ideas that disrupt the rest of society, yet higher-education teaching techniques continue to evolve at a glacial pace. Given education’s centrality to raising productivity, shouldn’t efforts to reinvigorate today’s sclerotic Western economies focus on how to reinvent higher education? Universities and colleges are pivotal to the future of our societies. But, given impressive and ongoing advances in technology and artificial intelligence, it is hard to see how they can continue playing this role without reinventing themselves over the next two decades.

Cody Cook, Rebecca Diamond, Jonathan Hall, John A. List, Paul Oyer, Stanford: The Gender Earnings Gap in the Gig Economy: Evidence from over a Million Rideshare Drivers. The growth of the "gig" economy generates worker flexibility that, some have speculated, will favor women. We explore one facet of the gig economy by examining labor supply choices and earnings among more than a million rideshare drivers on Uber in the U.S. Perhaps most surprisingly, we find that there is a roughly 7% gender earnings gap amongst drivers. The uniqueness of our data—knowing exactly the production and compensation functions—permits us to completely unpack the underlying determinants of the gender earnings gap. We find that the entire gender gap is caused by three factors: experience on the platform (learning-by-doing), preferences over where/when to work, and preferences for driving speed. Overall, our results suggest that, even in the gender-blind, transactional, flexible environment of the gig economy, gender-based preferences (especially the value of time not spent at paid work  and, for drivers, preferences for driving speed) can open gender earnings gaps. The preference differences that contribute to pay differences in professional markets for lawyers and MBA’s also  lead to earnings gaps for drivers on Uber, suggesting they are pervasive across the skill distribution  and whether in the traditional or gig workplace.

Yann Bramoulléa, Lorenzo Ductor, Journal of Economic Behavior & Organization: Title length. We document strong and robust negative correlations between the length of the title of an economics article and different measures of scientific quality. Analyzing all articles published between 1970 and 2011 and referenced in EconLit, we find that articles with shorter titles tend to be published in better journals, to be more cited and to be more innovative. These correlations hold controlling for unobserved time-invariant and observed time-varying characteristics of teams of authors.

Manon K. Schweinfurth, Michael Tabo, Current Biology: Reciprocal Trading of Different Commodities in Norway Rats. The prevalence of reciprocal cooperation in non-human animals is hotly debated. Part of this dispute rests on the assumption that reciprocity means paying like with like. However, exchanges between social partners may involve different commodities and services. Hitherto, there is no experimental evidence that animals other than primates exchange different commodities among conspecifics based on the decision rules of direct reciprocity. Here, we show that Norway rats (Rattus norvegicus) apply direct reciprocity rules when exchanging two different social services: food provisioning and allogrooming. Focal rats were made to experience partners either cooperating or non-cooperating in one of the two commodities. Afterward, they had the opportunity to reciprocate favors by the alternative service. Test rats traded allogrooming against food provisioning, and vice versa, thereby acting by the rules of direct reciprocity. This might indicate that reciprocal altruism among non-human animals is much more widespread than currently assumed.