George Will on foreign-born homesteaders

In a concise column yesterday, George Will recounts the Homestead Act of 1862 and its effect on immigration in the 19th century. Noteworthy elements are the statistics on the share foreign-born along the frontier in the Census of 1870, approaching 40 percent; and that less than a sixth of the land dispersed by 1904 had actually gone to homesteaders rather than "sharpies" (speculators, railroads). Love that word! Then Will closes with the oft-heard but worth repeating remark about the value of immigration in the context of an aging population with rising entitlements.

Reinhart and Rogoff on U.S. recovery

Another helpful post by Ezra Klein leads us to a discussion of the recent recession and recovery in historical context, courtesy of Carmen Reinhart and Ken Rogoff, who also provide an apples-to-oranges rebuttal of a recent blog post by John Taylor.

It's hard to disagree with either Reinhart and Rogoff that the level of GDP (per capita) is ultimately what we really care about, or with Taylor's implicit point that to get a higher level you need a faster growth rate during recovery. The level of GDP has remained low, unemployment high, and the growth rate of GDP hasn't been very rapid following this recession. But I think the time series graphs of levels of GDP provide a more compelling comparison than Taylor's growth rates.

It reminds me of how mystified undergraduates often feel in intermediate macroeconomics when they learn that growth is rapid in the neoclassical model following a cataclysmic destruction of capital.  I think their basic intuition, about why that's almost beside the point, is noteworthy.

RIP Arlen Specter

Former PA senator Arlen Specter succumbed to his fight with cancer after a long career marked by judiciary committee spats and staunch support of the National Institutes of Health. The NIH budget seems not to be exactly the apple of Congress members' eyes these days, but probably not much is.

Social mobility in rare names

A shout out to my colleague at Queens College, Neil Cummins, whose work with Greg Clark on families with rare surnames was profiled in this Economist article on social mobility. I was wondering which way they'd land with their findings, not much mobility or more than one might expect (it's England, after all, not exactly a classless society), and it sounds like at least the Economist folks feel they results indicate much inheritability of SES.

Measuring mortality and privacy

The Times reports on a year-old change in how the Social Security Administration publicly reports deaths. Studies without generous (often government) funding are now finding it difficult to cough up the cash for access to the CDC's National Death Index, the only alternative to the previously free SSA data that I gather is now much less complete. 

It's hard to know exactly what motivated SSA to change its protocol, but it sounds like part of it may have to do with popular attention to reports of identity theft focused on young decedents. I wonder if there might be room for a compromise that disclosed data based on advanced age at death; that wouldn't help all researchers, but those focused on aging would have an easier time of things.

Risk-adjusted returns to education?

Here's an economix blog post with a fun graphic comparing the returns to various investments including education, based on this post over at Brookings. As the Brookings post points out, they haven't risk-adjusted the returns, but they say the risks are greater for workers with low education, and presumably they're talking about unemployment risks. The fact that the rate of return for the associate's degree is so high really points something out: these are the rates of return for successfully acquiring the asset in question, and for some the acquisition of an associate's or bachelor's degree is far from certain. You can pay to go to college, but there's no guarantee you'll get the degree. Untangling this might make for an interesting dissertation paper for an enterprising Ph.D. student.

Much a Dew about nothing?

Today the New York City Health Department voted 8-0 with one abstention to pass the mayor's ban on portions of sugar sweetened beverages larger than 16 oz.  Economists typically prefer taxes to outright bans on unhealthy behavior for a variety of reasons.  Will we see bootlegged 32 oz. containers at Citi Field or Yankee Stadium?  Or just more lines at 7-Elevens, which are apparently exempt from this new regulation!

CUNY's new community college model

A recent article in the Times discusses CUNY's "New Community College," the tentative name for a new institution using new strategies aimed at increasing graduation rates. The article is interesting because it details challenges (a) in prospective students' lives, (b) in their courses of study, and (c) in constructing curricula to meet their needs. The most ominous note sounds around the last page, where it's revealed that 4 of 7 faculty have left or been forced out, seemingly over the plan to include both remediation and new material all at once. That certainly sounds daunting to me.

More on online learning

The Times produces another article about online learning ventures laying out some of the directions in this field and critiques. One reader posted in a comment a link to an interesting article in Science showing variation in learning outcomes across in-person teaching methods.

Changing retirement ages in the Euro zone

The Washington Post reports on rising public sector retirement ages in Italy and also presents a nifty graphic comparing them across a number of OECD countries. The first article describes the hopelessness felt by older individuals when these changes are announced without much lead time. Say what one will about the ability of OECD governments in general to tackle the fiscal challenges of population aging head-on, but at least such changes have been legislated in some countries well in advance of their taking effect. The 1983 Social Security Amendments scheduled a gradual rise in the normal retirement age starting in 2000, a full seventeen years later.

Anna J. Schwartz, 1915-2012

The New York Times has reported the death of the great monetary economist Anna J. Schwartz at 96. I'll never forget attending a seminar conducted by her and Hugo Kaufmann in the basement of the CUNY Graduate Center on Tuesday, December 2, 2008. My best memory of what she said that day was that she felt Bernanke was "fighting the last war" with monetary policy, or using the wrong tools for the current job. That point reappears toward the end of her Times op-ed published the next summer.

George Will on higher ed costs

Dripping with signature wit and sarcasm, George Will's latest concerns the cost of higher education. I'm not sure about how factually based such points are, but he cites "academic administrators outnumber[ing] faculty"in the UC system, hearkening back to a recent post of mine on the topic.

Derivatives and a simple example

This article on NPR.org provides a helpful explanation of what derivatives are, all in the context of chicken farmers. I'm never sure whether near-metaphors like that are helpful or only more confusing, but I can't resist them!

Brooks and Collins on education

What don't they discuss in this week's Conversation, which is about education?  A wide-ranging and fascinating back-and-forth ensues.  I particularly liked the discussion about costs and the growth in managers at UC ("Soon every faculty member will have a personal senior manager") and the trajectories over 4 years of college in various metrics of students' well-being and progress from the Wabash National Study.  Motivation?  Fuhgeddaboudit!

Conard's full monty in the NYT-M

Edward Conard, a retired Bain executive, is interviewed in the NYT Magazine about his forthcoming book on inequality, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong.  I admit I skimmed the article, but I couldn't find the promised argument about why more inequality was better than less.  Conard is big on saving and investment, which most would agree is important. Perhaps he just doesn't view inequality as good or bad, or maybe it's one of those perspectives that ex post inequality could be evidence of ex ante opportunity.

But the best passage by far was at the bottom of the fourth page:

There’s also the fact that Conard applies a relentless, mathematical logic to nearly everything, even finding a good spouse. He advocates, in utter seriousness, using demographic data to calculate the number of potential mates in your geographic area. Then, he says, you should set aside a bit of time for “calibration” — dating as many people as you can so that you have a sense of what the marriage marketplace is like. Then you enter the selection phase, this time with the goal of picking a permanent mate. The first woman you date who is a better match than the best woman you met during the calibration phase is, therefore, the person you should marry. By statistical probability, she is as good a match as you’re going to get. (Conard used this system himself.)


Look out, eHarmony!!

The UK's double dip?

Much ado was made last week about a second straight quarter of contracting GDP in the United Kingdom, and Paul Krugman's blog pointed in the direction of a helpful writeup by the UK statistical office. Krugman reprints their shocking graphic showing the rebound is more sluggish than was the UK's emergence from the Great Depression. Frightening stuff, but the UK was also relatively less battered by the Depression than the U.S.

Coin shortage in Zimbabwe

A few days ago, the Times updated us on the monetary situation in Zimbabwe, where coins are in short supply in that dollarized economy.

Krugman berates Bernanke

This weekend's upcoming Times Magazine includes an excerpt of Paul Krugman's forthcoming book, End This Depression Now, in which he criticizes the Fed's recent monetary policy as too timid, and in particular too timid relative to the implications of Ben Bernanke's research prior to joining the Fed.

This week I showed the Q&A's from Bernanke's March 2012 lectures at GWU in my intermediate macro class at Queens College.  What stands out now that Krugman's raised this point, that Bernanke appears to have significantly moderated his views on Fed activism, is a mildly reverential invocation of Paul Volcker's and Alan Greenspan's commitments to price stability in the 1980s and 1990s, which appears toward the end of lecture 2. It reminds me of Paul Volcker's hawkish op-ed last fall, which I mentioned here.

VA is asked by vets to look ahead

Here's an NPR article about bottlenecks in mental health service provision for veterans. It quotes Patrick Bellon, an activist with Veterans for Common Sense: "You don't see the real cost in human terms until 20 to 30 years after the conflict has ended," Bellon says. "Only recently have we seen an attempt to increase resources to deal with that cost."

It's nice to see this sound bite fact referenced again, mirroring VA Secretary Shinseki's similar statement a few weeks back. We put it in our Institute of Medicine report in 2010.

VA looks ahead

An article in the Times about expanding VA hiring quotes VA chief Eric Shinseki: "History shows that the costs of war will continue to grow for a decade or more after the operational missions in Iraq and Afghanistan have ended.... As more veterans return home, we must ensure that all veterans have access to quality mental health care."

Sometimes a null result is publishable!

The Times reports on several studies about obesity by Roland Sturm and others that find no relationship between the availability of healthy foods in neighborhoods (e.g., grocery stores) and child and adolescent obesity.  I've heard it said that near subway stops in New York, junk food is easier to find than healthy food, a characteristic that I doubt is easy to measure well in large-scale studies.

Reverse migration

The Times also reports on outmigration of highly skilled foreign born (or second-generation immigrant American citizens). No doubt these anecdotes are fueled in part by continued macroeconomic weakness and credit market impediments here in the U.S.

The fertility transition in Nigeria

The Times reports on the state of the fertility transition in Nigeria. In the World Bank's WDI, Nigeria's total fertility rate is around 5.6 births per woman or so, down from a high of 6.8 around 1980 but still relatively high even by developing standards. On the second page of the article appears a statement by a mother interviewed in a women's health clinic about the "quantity-quality" tradeoff. Other parts of the article emphasize the history of polygamy, women's roles, and religious views both Catholic and Muslim.

"Battle shock" and suicide in the Confederacy

Another Binghamton historian contributes to the Disunion blog, this time about "battle shock" (or "shell shock"), stress, and suicide among mostly Confederate soldiers.

Inside the debt deal negotiations

There have been two articles about the debt ceiling negotiations last summer between the President and the House, one in the Washington Post, and the other in the New York Times. The former seems to suggest it was the unfortunate timing of an announcement by a bipartisan working group in the Senate that caused Obama to backpedal, feeling he couldn't agree to more spending cuts and fewer tax increases than the Senate. The latter article implies on its first page that it places more blame on House Republicans.

Hacker's new Civil War death toll

An article in the Times describes David Hacker's work on counting Civil War deaths using Census data courtesy of the great repository at IPUMS. The old estimate was 622,511 in the Historical Statistics of the United States;  Hacker's guess is between 650,000 and 850,000.

Rethinking economics education

There are several helpful perspectives in a recent Room-for-Debate from the Times: a call to reemphasize the importance of information asymmetries and their destructive consequences for prices and market equilibria, and a call to refocus attention on economic history. My favorite? A call to teach gardening instead of financial engineering.

Microfounding the IS Curve

In the midst of thinking about presenting the IS Curve to undergraduates, I came across this helpful blog post by Mark Thoma from 10/2011 that discusses David Romer's approach in Advanced Macro 4th ed.  Spending today falls (rises) because the representative consumer (via the Euler condition) substitutes toward (away from) future spending when the interest rate rises (falls).

Maybe I'll present that intuition at some point, but I think undergraduates probably better comprehend the interest rate as the price of borrowing; when borrowing's price rises, borrowing and spending on investment and other durable goods falls.

Celebrity marriage predictor

Fun from the Times in the form of witty schadenfreude and likely dooming factors in celebrities' marriages. Hooray, divorce.

Convincing others of mental health trauma

An article in the Times about ailing youngsters in Le Roy, NY includes a citation to an article in Spine on fibromyalgia (1996, behind a pay firewall) whose title is, "If You Have to Prove You Are Ill, You Can't Get Well." It reminded me of an insight someone shared with me once about PTSD disability benefits, for which veterans have to periodically attest they still suffer from PTSD. The argument is that is likely to be iatrogenic, continuing mental health trauma because the patient has to convince a third party he or she had it.

"Growth" and regulations

I wasn't expecting to find a lesson in the economics of regulation in this Times article on craft brewing in Colorado, but that ultimately was the focus. Colorado still has restrictions on the books prohibiting large sellers from stocking beer above 3.2% ABV. As any good craft beer connoisseur knows, there are precious few brews south of 5% currently on the market, let alone 3.2%.  As a result, consumers looking for more alcoholic brews are forced to patronize smaller liquor stores, which are more willing to stock local beers that tend to vary more than national brands in availability and quality. Hence the "welcoming atmosphere" for craft brews promised in the title of the article.

Everybody wins, right? Local breweries see increased demand, presumably shifted from out-of-state competitors. Having grown up in a 3.2-beer-state myself, maybe I'm more likely to state that I'd rather have the choice as a consumer to purchase products wherever I'd like, either to skip the extra trip to the liquor store if I choose to drink stronger "Bud,"or to choose to make the trip and purchase a microbrew.

A new book on the 2009 stimulus

Yesterday and today, the Times ran articles on the new book, "The Escape Artists," by Noam Scheiber about White House economic policy and advisors during the financial crisis. Here is a book review, and here is an Economix blog interview.

"A bunch of lazy Americans"

With an intro like that, it's easy to own the best line in a recent article about shortages in skilled labor for manufacturing, which quoted a Michigan welder reasoning that shortages probably reflect how lazy Americans "don't want to get their hands dirty anymore ... [t]hey want an office job."

There's been a lot of emphasis in the media and politics about manufacturing, as discussed recently by Christina Romer, who questioned whether there's really any market failure that ought to prompt government intervention. This article was interesting because it provided some insights into the worker-employer matching process in manufacturing.

One point was that technical change in manufacturing has made a lot of workers' skills obsolete. Some of the unemployed had returned to community college for technology-focused associate's degrees, and the article's description of the production process made it clear why. Automation improves efficiency but still requires labor skilled enough to supervise the automation.

Another was related to the welder's point. Working on a production line requires more physical labor than designing the materials to be produced, even though, as the article also pointed out, physical labor might be paid more per hour.  (It probably is also more exhausting per hour!)

Needless to say, service jobs aren't physically undemanding either. But after reading this article, it wasn't difficult to see why young labor might choose not to aim for a career in manufacturing.

Technologies, cheap and expensive, during warfare

Recently the Disunion blog included a post about mine technology developed by the Confederacy during the Civil War. Mines were cheap and effective, although perhaps not a decisive factor. They also were controversial. Both sides developed new technologies to counter the other's, whether cheap or expensive.

Trends in marriage and fertility

Recently the the Times has reported on trends in marriage and fertility, probably partly in response to Charles Murray's recent book on the topic. They describe a lack of marriageable partners, declining male wages and rising female wages, behavioral challenges among less educated men, and unintended pregnancies that don't carry the same social stigma as in earlier times. Eligibility for means tested programs like food stamps is also mentioned. Wage stagnation for males is a legitimate explanation, pardon the pun. But it also occurred to me in my biased capacity as a New Yorker, adolescence seems to be becoming a lengthier part of the life cycle. Could that be producing more out of wedlock births? Or would younger women just prefer older men instead?

Romney's FL defense of MA health insurance overhaul

I was really impressed by Mitt Romney's defense of his health insurance overhaul in Massachusetts during the Florida debate last Thursday, as reported by NPR.

Innovation, criticism, novelty, proximity

Jonah Lehrer offers a New Yorker piece about idea production that compares brainstorming, the non-critical working in groups, to alternative methods. He argues criticism can be a good thing, especially with the right mix of new and old talent. Who could argue with his pick of "West Side Story" as the product of a sweet spot of old and new creative talent on Broadway? He also writes about the upsides of a pell-mell physical structure, such as found MIT or Pixar, where thinkers unexpectedly run into each other and come up with new ideas.

2011Q4 GDP advance estimate

A newspaper headline today reads "fastest growth in 18 months." Here's a graphic showing quarterly log real GDP (red line with circles) and CBO's estimate of potential real GDP (blue).  The economy "went south" and hasn't exactly come back, has it!  By these measures, we're looking at an output gap of about –7%.

Economic Geography

Today Paul Krugman's column presents a view of the recent Times piece on Apple and outsourced jobs consistent with his earlier work on economic geography that helped win him the Nobel prize. I'd summarize the argument as having to do with physical capital: in addition to quantity and quality, the location of plants and infrastructure can also be important. Less clear to me (but maybe it's in his work somewhere) is what role human capital plays in all of this. Harvard's Ed Glaeser has written extensively about that sort of thing, but I think his emphasis is less on manufacturing than on the idea economy.

Homeownership and neighborhood externalities

When I read Greg Mankiw's op-ed on the tax code, I started thinking about the tax preference for homeownership through the mortgage interest deduction. Not too long ago I tweeted about how a windy night on a Brooklyn street full of rental units resulted in a veritable cyclone of trash. My point being that when everyone's renting, nobody hauls their trash to the curbs themselves, and nobody does anything about it when the workers who do didn't do a good job. A classic tragedy of the commons.

Needless to say, just because somebody is a homeowner wouldn't guarantee they wouldn't free-ride on their neighbors and let their own trash fly free as a bird.

But here's another perspective I found today, in which litter and other indicators of neighborhood risk causes low homeownership rather than the reverse, which is probably the more traditional perspective. It raised the obvious question in my mind of where the litter comes from in the first place, but it could be proximity to commercial strips or commuting hubs, I suppose.

Summers on evolving higher ed

In the Times, Larry Summers opines about the structure of college learning and future trends, with plenty of provocative perspectives. It's hard to disagree with the notion that teaching collaborative analysis rather than individual demonstration of knowledge would probably be a better fit of the needs and the technology. But under conditions of large student-to-instructor ratios, the free-rider problem would be made a lot worse by such endeavors. I wouldn't suggest that the current passive-learning model really gets this particularly right either, but it's hard to see how assigning credit based solely on group projects could ever get the incentives right for students without a lot of monitoring.

More evidence of flat obesity trends(?)

The release of the NHANES data is an biennial event, and I wrote about it in 2010 too. This year, the same picture has emerged, as summarized by NPR, of obesity rates based on BMI that are not statistically distinguishable from recent earlier rates.

Here's a time series plot of the obesity rates, meaning a BMI ≥ 30, and (in recent years) their 95% confidence intervals.  The sources are Flegal et al. (JAMA 2002, 2010, 2012), Ogden et al. (JAMA 2006). For the 2005-2006 data, I averaged male and female data from Tables 4 and 5 in Flegal et al. (JAMA 2010).

Does this picture make it appear that obesity prevalence is slowing down?

DHS Survey on Afghanistan

This NPR article reports on the controversies surrounding the November 2011 release of the 2010 Demographic and Health Survey of Afghanistan. The 2010 period life tables appear on page 114 of the final report and reveal the shocker:  life expectancy at birth (e0) is estimated at 64.2 for females and 63.6 for males, up about 20 years from the previous "measure" from around 2002.

Myths in "The Myths of Japan's Failure"

After reading Eamonn Fingleton's op-ed piece on Japan published today in the Times, I remembered why I decided to study economics, which also led to studying demography. Fingleton turns down into up and left into right when discussing Japan's recent economic and demographic challenges, which is why his writings are more at home outside academic circles. He cites faster growth in GDP per capita in the U.S. and then suggests the measure is biased because of methodological advances because somebody said so. He doesn't mention persistent deflation.

On the population side, his single focus is on the Japanese lead in life expectancy (or mortality), which is indeed impressive. But combined with ultra-low fertility, which has already resulted in a shrinking labor force, declining mortality in Japan is a gift that presents significant macroeconomic and microeconomic challenges. Unemployment in Japan is and has always been much lower than elsewhere, except for a brief window around 2000, but participation rates at older ages are no higher. Like its macroeconomic performance, Japan's demographic profile does not inspire optimism.

Unemployment by degree

Today the Post reports on a study showing unemployment by undergraduate degree in the 2009 and 2010 waves of the American Community Survey. The graphic shows unemployment rates among recent college graduates aged 22-26 ranging from 13.9% for architecture majors to 5.4% for education or for health majors.  I'm not exactly sure what a "heath" major is, but apparently they exist!

Economics winds up lumped in with all the other social sciences, for whom just-graduated unemployment was about 9%, near the national average for all workers.  Business majors experienced more like 7.5%.

Care for a closer look?  Try the 2009 and 2010 ACS samples in the IPUMS.

Public/private compensation and credentials

This Room-for-Debate installment from the Times examines whether public school teachers are overpaid in terms of both earnings and deferred compensation like retirement and health-care benefits.  A recent AEI/Heritage study counts up the data in the National Longitudinal Survey of Youth and argues that public school teachers are overpaid compared to their private sector counterparts with similar scores on the Armed Forces Qualification Test (AFQT).  One of the roundtable contributors argues that controlling for the AFQT alone isn't enough, and once you control for years of education, public school teachers appear to earn less than they should.

Wouldn't it be nice to be able to just drop a covariate whose presence generates a result that doesn't fit with the story?