Many countries, many immigrants, many without documents

Yesterday the Times reported on immigration stories belonging to Chinese Americans, on the occasion of the reopening of the Museum of Chinese in America. The reporter points out that undocumented or illegal immigration is hardly a recent phenomenon.

Christina Romer on the crisis

A very helpful overview and update of the financial crisis and the state of the economy is offered by CEA chair Christina Romer.

Taylor and a stimulus follow-up

Last week, John Taylor and friends authored a piece in the Wall St. Journal that updated their earlier discussion, which I blogged about here.

A 2009 paper by Matthew Shapiro and Joel Slemrod describes how the 2008 tax cuts seemed to offer low "bang for the buck." I particularly like their Table 2, which lists the percentage responses to their survey question about spending the tax rebate. The marginal propensity to consume rises with age, which is consistent with what the life cycle model predicts.

Preston and Ho on U.S. mortality and health care

The Times just wrote up a summary of a recent NBER working paper by Sam Preston and Jessica Ho that compares mortality and life expectancy in the U.S. to their levels in other industrialized countries. In particular, the authors examine progress against mortality from (breast and prostate) cancers that are not associated with behavioral factors. They find the U.S. has made better progress against those causes of death than have other countries, progress that can only be attributed to the quality of the health care delivery system. Their conclusion is that our health care system on average produces high quality care, as measured by preventable mortality.

The great recession and female labor force participation

On Friday the Times ran a story about women who are reentering the labor force, typically having been stay-at-home moms, because of spousal unemployment, losses in asset values, or just plain worry. Today, Sunday, Maureen Dowd writes about the long-term downward trend in female happiness coinciding with greater access to careers, quoting Penn economist Betsey Stevenson. A nice coincidence; it's probably not very easy, or happiness-inducing, to be the economic insurance policy of the household!

Another post on the state of macroeconomics

The part of David K. Levine's rebuttal to Paul Krugman I liked the best was the analogy between shocks to markets and the inherent randomness in the movement of physical particles. I think it's more controversial that Levine implies; markets are full of people, who make choices. Particles, as far as we know, don't.

Maybe part of the problem some of us have with markets is that we think people ought to do the right thing because, after all, we are moral creatures. We are capable of understanding the consequences of our actions.

This way lies the road to political economic philosophy! If that's what it's called. Don't ask me, I'm just an economist.

Investing in human capital vs. saving for retirement

The Wall Street Journal's Steve Yoder writes about saving and educational debt in a piece that is probably most interesting for its laying bare of generational perspectives on thrift.

Yoder thinks his son should take out student loans to finance college, while he invests his earnings from co-appearing in the WSJ in a retirement savings account. There is absolutely no mention of relative rates of return or liquidity concerns, only the value of savings and thrift.

To be sure, the interest rate on federal student loans is quite low. You could arbitrage a gain pretty easily with just a money market mutual fund. Then again, that kind of behavior is what got so many people into trouble with real estate: borrowing to invest when you could avoid it. But I admit that the conditions are quite different, with a lot less risk.

But private loans are not cheap. And federal student loans are supposed to be means-tested. One could make a pretty good case that the taxpayer shouldn't be subsidizing his son's education so that the son can earn money in stocks and bonds, even if it is for his future retirement.