Category Archive: Sources

  1. Eye Machine

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    IMPLICIT FAVOR

    The failures of research on fin-tech and poverty alleviation

    Last week, we considered how social and political standards can pressure climate scientists to under-report their findings, introducing an underestimation bias into published climate research. In a recent thread, Nicholas Loubere examines the development buzz around mobile money, showing how similar factors can serve to exaggerate the findings of academic studies.

    In a new article quoted in the thread, MILFORD BATEMAN, MAREN DUVENDACK, and NICHOLAS LOUBERE contest a much cited study on the poverty alleviating effects of mobile money platforms like M-Pesa. The criticism rests largely on grounds of omission: the study, they argue, ignores the closure of nearly half of microenterprises opened with M-Pesa, the jobs and incomes lost with the introduction of new businesses into fragile markets, the burgeoning debt accrued through digital loans, the overwhelmingly foreign ownership of M-Pesa and its profits, and the wealthy networks composing its primary users. Methodologically, it had no control group, used a small sample size, and overlooked the potential for reverse causality.

    Why was a potentially flawed study so well regarded? According to Bateman, Duvendack, and Loubre, it’s in part because its results told researchers and policymakers what they wanted to hear. From the article:

    “The rapid popularization of fin-tech as a developmental solution is premised on the continued prominence of microcredit and the broader concept of financial inclusion. The microcredit movement was established and validated in the 1980s on overblown and ultimately false claims that providing small loans to groups of poor women was a panacea for global poverty reduction—claims that were especially associated with Dr Muhammad Yunus. Empirical justification came from an impact evaluation undertaken in Bangladesh by then World Bank economists Mark Pitt and Shahidur Khandker, which claimed that microcredit programs had significant beneficial results for impoverished female clients. For many years, Muhammad Yunus used Pitt and Khandker’s findings to successfully ‘sell’ the microcredit model to the international development community, generating a consensus that the microcredit model was the most effective way to efficiently provide enormous benefits to the global poor.”

    Link to the article, and link to a blogpost in which the authors outline their key findings.

    • “Kenya’s new experience of debt reveals a novel, digitized form of slow violence that operates not so much through negotiated social relations, nor the threat of state enforcement, as through the accumulation of data, the commodification of reputation, and the instrumentalization of social ties.” Kevin P. Donovan and Emma Park report on the consequences of mobile debt for poor borrowers. Link.
    • In an article from 2017, Loubere “examines examples of exploitation, fraud, instability, and extraction related to expanded digital financial coverage in contemporary China.” Link. At Bloomberg, David Malingha compares credit markets in Asia with those of sub-Saharan Africa. Link.
    • “This article claims that to bring finance back to serve the real economy, it is fundamental to (a) de-financialize companies in the real economy, and (b) think clearly about how to structure finance so that it can provide the long-term committed patient capital required by innovation.” Mariana Mazzucato on governments’ role in ensuring that finance serves public ends. Link.
    ‡ finance debt poverty_alleviation

    New Researchers: INVERSE VOYAGE

    The upward mobility gap and the Great Migration

    Assistant Professor of Economics at UC Berkeley ELLORA DERENONCOURT’s paper, “Can You Move to Opportunity?,” considers the effect of the Great Migration on upward mobility for African Americans, finding that it “reduced upward mobility in northern cities in the long run, with the largest effects on black men.”

    From the introduction:

    “Between 1940 and 1970, four million African Americans left the South and settled in urban areas in the north and west of the country. The Great Migration, as it is known today, radically transformed the racial demographics of destination cities, prompting white flight from urban neighborhoods and altering the policies of local governments.

    I show that the Great Migration led to a reduction in upward mobility in destination commuting zones in the North today. A 30-percentile greater increase in the black population lowered adult income rank of children from low income families by 3 percentiles, approximately a 9% drop in adult income. My analysis reveals significant and persistent responses starting in the 1960s in the following areas: decreases in white public school enrollment and urban residence within the commuting zone; higher local government expenditures on police and higher murder rates; and increased rates of incarceration.”

    Link to the paper, and to Derenoncourt’s website.

    ‡ migration inequality new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • A remarkable thread from Albert Pinto on the global political economy of land ownership and food production. Highlights within: an Adam Tooze post in 2018 on “feed and oceanic deadzones”; a recent list of companies benefiting from Amazon’s fires; a CFR interactive on Amazon’s deforestation.
    • Via James Murphy, three recent papers that call into quesiton the efficacy of nudge campaigns in higher ed: one, on FAFSA nudges (no impacts on FAFSA receipt or enrollement); two, on College Board attempts to increase broad and ambitious applications (little impact); and three, nudges to encourage studying and coaching (little impact, possible adverse impact).
    • “In Tianjin’s auto industry, spontaneous multi-employer wage coordination occurs through informal arrangements that leverage a lead firm’s control over its suppliers and various social networks that connect employers, labor unions, and workers in the locality. As a result, wages across the local auto industry are greatly compressed.” Hao Zhang on regional value chains and wage coordination in China. Link.
    • By Sanjukta Paul: “Recovering Labor Antimonopoly.” Link.
    • A ProPublica story by Lizzie Presser from July on the little known issue of heirs’ property, “the leading cause of Black involuntary land loss.” Link.
    • An excellent forum featuring seven (so far) posts by legal scholars on the legacy of Dartmouth v. Woodward, the landmark 1819 Supreme Court case that, among other things, set precedent for corporate personhood. Link.
    • Kevin McClure et al look at public-private partnerships and college student housing. Link. (Via a thread by McClure discussing the impact of P3 arrangements for student housing, spurred by a Bloomberg article on the same.)
    • Gibrán Cruz-Martínez examines assumptions on targeting and universalism for social protection programs for the elderly: “The study finds that (i) 79 countries would be economically able to shift from targeted noncontributory pensions to basic universal noncontributory pensions with less than 1.2 percent of the respective national gross domestic products; (ii) 16 countries have means‐tested/region‐tested noncontributory pensions more expensive than a hypothetical basic universal social pension; (iii) an arbitrary threshold of ‘economic development’ is not a limitation for implementing social pensions; and (iv) at least 17 countries with relatively low economic development have successfully implemented social pensions without means targeting.” Link. ht Sidhya
    • On the “Rawlsian revolution,” by Marina N. Bolotnikova. Link.
    • By Heldring, Robinson, and Vollmer: Monks, Gents and Industrialists. “We examine the long-run economic impact of the Dissolution of the English monasteries in 1535, which is plausibly linked to the commercialization of agriculture and the location of the Industrial Revolution. Using monastic income at the parish level as our explanatory variable, we show that parishes which the Dissolution impacted more had more textile mills and employed a greater share of population outside agriculture, had more gentry and agricultural patent holders, and were more likely to be enclosed. Our results extend Tawney’s famous ‘rise of the gentry’ thesis by linking social change to the Industrial Revolution. We provide to our knowledge the first systematic investigation of the link between the Dissolution and long-run English economic growth, in particular changes in social structure and the Industrial Revolution.” Link.

  2. Summer in Brabant

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    INTEMPERATE OBJECTIVITY

    On the pressures of policy-relevant climate science

    Without any “evidence of fraud, malfeasance or deliberate deception or manipulation,” or any promotion of inaccurate views, how can bias enter a scientific assessment? In their new book, Discerning Experts, Michael Oppenheimer, Naomi Oreskes, Dale Jamieson, et al explore the pattern of underestimation of the true consequences of climate change.

    Climate change’s impacts are uncertain; predictions about climate change are difficult to make. Taking an ethnographic approach, Discerning Experts shows how those difficulties, coupled with the nature of the public discourse, and the pressures that come when research is going to be discussed and used in policy, have tilted climate assessment optimistic and cautious.

    In a summary of their book, Oreskes et al explain three reasons for the tilt:

    “The combination of … three factors—the push for univocality, the belief that conservatism is socially and politically protective, and the reluctance to make estimates at all when the available data are contradictory—can lead to ‘least common denominator’ results—minimalist conclusions that are weak or incomplete.”

    These tendencies, according to the authors, pertain to the applied research context. The academic context is different: “The reward structure of academic life leans toward criticism and dissent; the demands of assessment push toward agreement.” Link to a summary essay in Scientific American. Link to the book.

    • In an interview, Michael Oppenheimer elaborates on other elements that skew the assessments: the selection of authors, the presentation of the resulting information, and others. Link.
    • In a review of the book, Gary Yohe reflects on his own experience working on major climate assessments, such the IPCC’s. Link.
    • A David Roberts post from 2018 finds another case of overly cautious climate science: models of the economic effects of climate change may be much more moderate than models of the physical effects. To remedy this, “We need models that negatively weigh uncertainty, properly account for tipping points, incorporate more robust and current technology cost data, better differentiate sectors outside electricity, rigorously price energy efficiency, and include the social and health benefits of decarbonization.” Link.
    • Tangentially related: carbon tax or green investment? It’s worth considering not just all possible policy options but also their optimal interactions. A paper by Julie Rozenberg, Adrien Vogt-Schilb, and Stephane Hallegatte concludes, “Optimal carbon price minimizes the discounted social cost of the transition to clean capital, but imposes immediate private costs that disproportionately affect the current owners of polluting capital, in particular in the form of stranded assets.” Link to a summary which contains a link to the unpaywalled paper.
    ‡ climate_change applied_research

    New Researchers: MANAGERIAL SWAY

    Policy implications of Notice-and-Comment Rulemaking in the US

    PhD candidate at NYU’s Politics Department STEVEN RASHIN studies how private interest groups shape domestic policymaking in the United States. In a paper published earlier this year, he compiles a dataset consisting of 47,000 comments to the Securities and Exchange Commission and tests their influence over government bureaucrats using a novel measure of efficacy.

    From the paper’s introduction:

    “Comments on regulations change the implementation of public policy by providing policymakers with information they did not have before. The more industry-specific language and data a commenter provides the policymaking bureaucrat, the more likely the agency is to adjust the language of a final rule pursuant to the commenter’s suggestions. Further, comments that concentrate their arguments on only a few topics tend to alter rules more than those that mention many. The marginal effect of commenting is lower for members of the public than for organized interests. Holding constant the technical complexity of a comment, agencies are more likely to adopt organized interests’ comments into the final rule over those from the general public.”

    Link to the paper, and to Rashin’s website.

    ‡ policy_making democracy new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • New on the Phenomenal World: Cosmo Grant on crates, boxes, and the difficulties of building unbiased predictive algorithms. Link to the post, and link to an interactive visualization of its key concepts, produced in collaboration with Emily Chu.
    • We were grateful for Robin Sloan‘s kind words about the JFI Letter. Check out his wide-ranging newsletter for literature, history, art, and language, packaged with a good dose of humor. Link.
    • Four new studies confirm the importance of school spending in raising test scores of low income students. In Texas, researchers Daniel Kreisman and Matthew Steinberg find that “A 10% increase in expenditures yields a 0.1 s.d. increase in reading scores and a near 0.08 increase in math.” Link. In Wisconsin, E. Jason Baron finds that just 5% in increased spending results in a “25% reduction in the dropout rate, an increase in test scores of approximately 30% of a standard deviation, and a 15% increase in postsecondary enrollment.” Link. Finally, two papers from the Annenberg Institute find that spending “corresponds to positive achievement effects in districts with a high proportion of impoverished students.” Link and link. See also coverage of all four studies on Chalkbeat.
    • “We study the long-term impact of climate change on economic activity across countries. Using a panel data set of 174 countries over the years 1960 to 2014, we find that per-capita real output growth is adversely affected by persistent changes in the temperature above or below its historical norm.” New research from Matthew Kahn, Kamiar Mohaddes, Ryan Ng, M. Hashem Pesaran, Mehdi Raissi, and Jui-Chung Yang. Link. ht Sidhya
    • At 3P, J. Meeks reflects on recent proposals for a domestic workers bill of rights, which include the formation of a sector-specific wage board: “While domestic workers stand to gain tremendously from organizing, their working conditions often make organizing impractical. For that reason, the bill does not rely on the bargaining power of domestic workers to improve their working conditions.” Link.
    • “The stock market is a measure of the expectations of future profits of companies that are listed in the exchange. It is only coincidental when it provides information about the health of the economy.” Dean Baker advises policymakers to adopt more holistic measures of economic well being. Link.
    • Over half a million Spanish citizens eligible for government sponsored electricity subsidies were denied the benefit, due to a flawed algorithm in the allocation software. At Algorithm Watch, Nicolas Kayser-Bril reports on the ongoing legal battle to rectify disbursements. Link.
    • “If we live in a time when G is either low or horribly skewed, why not focus on R?” Drawing on Piketty’s formulation, Mark Blyth introduces his new project, “R for everyone,” at McMaster University’s summer school conference. Link to the lecture, and link to the full list of conference presentations.
    • Forgiving debt from child support payments “reduced parent employment barriers and improved credit scores, housing status, feelings of control over finances, and parent child bonds.” Heather Hahn and Daniel Kuehn report on the San Francisco child support debt relief pilot. Link to their overview of the findings, and link to the full report.
    • “Unionism in the United States is contagious; it spills out of coal mines and steel mills into other establishments in the neighborhood, like hospitals and supermarkets.” From 2006, an NBER working paper in which Thomas Holmes geographically links unionized health care establishments to the coal mines of the 1950s. Link.
    • 82% of economists questioned in an online randomized controlled experiment agreed that “in evaluating a statement, one should only pay attention to its content.” The same experiment, conducted by Ha-Joon Chang and Mohsen Javdani, finds that “changing source attributions from mainstream to less-/non-mainstream significantly reduces economists’ reported agreement with statements.” Link.
    • “Did the Prussian three-class franchise, which politically over-represented the economic elite, affect policymaking? Combining MP-level political orientation, derived from all roll call votes in the Prussian parliament (1867–1903), with constituency characteristics, we analyze how local vote inequality, determined by tax payments, affected policymaking during Prussia’s period of rapid industrialization. Contrary to the predominant view that the franchise system produced a conservative parliament, higher vote inequality is associated with more liberal voting, especially in regions with large-scale industry. We argue that industrialists preferred self-serving liberal policies and were able to coordinate on suitable MPs when vote inequality was high.” By Sascha O. Becker and Erik Hornung. Link.

  3. Tennis Court

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    DETERMINED MOVEMENT

    Energy production and political institutions

    The role of labor (with some notable exceptions) has been relatively marginal in debates over how to decarbonize the economy. But given the growing number of clean energy jobs (and some recent labor news), it is reasonable to predict that any large-scale shifts in the nature of energy production will be accompanied by large-scale shifts in the nature of energy work and the labor relations that define it.

    In his 2011 book Carbon Democracy, Columbia University professor TIMOTHY MITCHELL explores the political history of energy production. The wide-ranging study spans history from the industrial revolution to the Arab Spring, and charts the relationship between carbon-based energy production and various forms of governance. Among the arguments at the core of the book is Mitchell’s identification of the emergence of democratic labor institutions within the structure and position of coal mines during industrialization—a position that was weakened in the transition to oil.

    From the book:

    “Between 1881 and 1905, coal miners in the United States went on strike at a rate of about three times the average for workers in all major industries, and at double the rate of the next-highest industry. The rise of mass democracy is often attributed to the emergence of new forms of political consciousness, and the autonomy enjoyed by coal miners lends itself to this kind of explanation. There is no need, however, to detour into questions of a shared culture or collective consciousness to understand the new forms of agency that miners helped assemble. Strikes became effective, not because of mining’s isolation, but because of the flows of carbon that connected chambers beneath the ground to every factory, office, home, or means of transportation that depended on steam or electric power.

    Changes in the way forms of fossil energy were extracted, transported and used made energy networks less vulnerable to the political claims of those whose labor kept them running. Unlike the movement of coal, the flow of oil could not readily enable large numbers of people to exercise novel forms of political power.”

    Link to the book preview, link to a 2009 article that preceded its publication.

    • For more on labor dynamics in industrial Britain, see Robert Steinfeld’s 2010 book Coercion, Contract, and Free Labor in the Nineteenth Century, and Suresh Naidu and Noah Yuchtman’s 2012 paper on coercive contract enforcement in coal and other industries. Link to the first, link to the second.
    • A 2012 review of Mitchell’s book by Matt Stoller: “Globally, the switch from coal to oil was a fight about labor. You can’t understand modern democratic or third world political structures without understanding energy, and particularly, coal and oil.” Link.
    • A book on the role of Mexico’s oil fields in labor disputes during the Mexican revolution, by Myrna I. Santiago. Link.
    • A Next System report by Johanna Bozuwa imagines a network of democratically-run energy projects as the core of a “just transition.” Link.
    ‡ history labor energy

    New Researchers: TRANSPARENT RISK

    Dodd-Frank and political violence in Sub-Saharan Africa

    In his job market paper, JEFFREY BLOEM analyzes the unintended consequences of the Dodd-Frank Act, which, in the wake of the financial crisis, heightened the transparency requirements for trade in minerals from Central Africa. The act attempted to cut ties with armed rebel groups by mandating that companies cease purchasing minerals from rebel-controlled mines. Bloem compares the intensity and spread of conflict in countries covered by the Dodd-Frank Act with that in sub-Saharan African countries which the Act did not cover.

    His findings:

    “Impact estimates show that the Dodd-Frank Act roughly doubled the probability of conflict at the sub-national level within the DRC. This general result persists across different types of conflict. Violence against civilians, rebel group battles, riots and protests, and deadly conflict all increase within the DRC due to the passage of the Dodd-Frank Act. There are at least, two relevant theoretical mechanisms that could explain these results. The feasibility mechanism suggests that limiting the revenue earned by armed rebel groups through the extraction of 3TG minerals tightens the budget constraint of armed rebel groups and limits their ability to cause conflict. Alternatively, the opportunity cost mechanism suggests that a reduction of income earned by families, households, and individuals in Eastern DRC decreases the opportunity cost of joining a rebel group and increases the ability of armed rebel groups to perpetuate conflict.

    Although policies and norms that push the private sector toward more accountable business practices are likely necessary, they are not sufficient. Ultimately, the Dodd-Frank Act, while perhaps forming beneficial international norms regarding natural resource extraction in the context of weak political institutions, has also made life much more difficult for many in Africa’s Great Lakes Region and in the DRC in particular.”

    Link to the paper, and to Bloem’s website.

    ‡ policy_making social_effects new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • JFI advisor Greg Duncan is one of several researchers leading Baby’s First Years, a groundbreaking study of “the impact of poverty reduction via monthly, unconditional cash gifts on family life and infant and toddlers’ cognitive, emotional, and brain development.” Link.
    • “Social Security does much more to help kids today than TANF. In 2018, nearly 3 million children under age 18 received $20.9 billion in Social Security benefits. By contrast, about 1.7 million children received financial assistance from TANF. If you care about today’s children, you should be very upset about how little TANF is doing to help them.” Shawn Fremstad on the CEPR blog. Link. Mentioned in the post is this 2016 analysis of Social Security’s role in alleviating child poverty, from Peter Arno and Jeannette Wicks-Lim at PERI. Link.
    • “What we seek to explore here is a set of interventions by the public sector targeted at expanding productive employment opportunities by supporting firms and workers in their efforts to acquire and extend the capacities needed to participate in the dynamic sector of the economy” A proposal for a new economy, by Dani Rodrik and Charles Sabel. Link.
    • From Matthew S. Jaremski and David C. Wheelock: “The Founding of the Federal Reserve, the Great Depression and the Evolution of the U.S. Interbank Network” Link. In a recent VoxEU article, the authors “[use] evidence from 20th century America to show how the founding of the Federal Reserve and the Great Depression affected interbank networks and lending practices.” Link.
    • Priyaranjan Jha and Antonio Rodriguez-Lopez analyze the interaction effects of trade liberalization and monopsonistic labor markets, finding that “Monopsony power reduces social welfare and the gains from trade.” Link.
    • Elise M. Dermineur “explores the world of informal financial transactions and informal networks in pre-industrial France.” Link.
    • “It is impossible to build an equitable and prosperous future with decision-making machines that amplify historical patterns of oppression.” Mona Sloane and Emanuel Moss call for interdisciplinary collaboration and the integration of qualitative research methods into AI system design in the August issue of Nature Machine Intelligence. Link.
    • A new report from Autonomy outlines the shortcomings of the UK’s work-based Universal Credit system, and considers “how the principles of UBI can speak to the specific problems of the UK’s current welfare benefit system.” Link.
    • Ben Williamson looks at how the expanding data infrastructure is shaping policy making in higher education. Link.
    • Clint Peinhardt, Alisha A. Kim, and Viveca Pavon-Harr use “satellite imagery of deforestation across Peruvian border regions” to assess the “limits of external imposition of environmental rules, like the 2009 United States-Peru Trade Promotion Agreement. The regulations appear prone to failure unless domestic interests mobilize in their support.” Link.
    • “Drawing on witchcraft cases reported in newspapers and coming before Ireland’s courts, this article argues that witch belief remained part of Protestant and Catholic popular culture throughout the long nineteenth century. We paint a complex picture of the Irish witches and their ‘victims’, who are respectively seen to have fought accusation and bewitchment using legal, magical, physical, and verbal means. We reveal the contexts in which witchcraft was linked to other crimes such as assault, slander, theft, and fraud in an era of expansion of courts and policing. This illustrates how Irish people adapted to legal changes while maintaining traditional beliefs, and suggests that witchcraft is an overlooked context in which interpersonal violence was exerted and petty crime committed.” By Andrew Sneddon and John Fulton. Link.

  4. The Geometry of a Wave

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    NONSTANDARD SHARE

    Young workers and the “gig economy”

    The emergence of companies like Uber and Taskrabbit has prompted commentators across legal, economic, and policy research spheres to pronounce the beginning of a new era of work, marked by the prevalence of technologically mediated casual work arrangements.

    A new report published by AARON MEDLIN and HYE JIN RHO at the Center for Economic and Policy Research casts doubt on these bold claims. Using data from the BLS 2017 Contingent Worker Supplement, it analyzes the preponderance of nonstandard work arrangements for workers between the ages of 21 and 25.

    From the report:

    “A majority of young workers, ages 21–25, with and without a college degree, are in standard work arrangements. Between 2005 and 2017, the share of young workers in standard work arrangements with a college degree increased from 94.1 to 95.4 percent. Contrary to common expectations, young workers are more likely to hold such jobs compared to the workforce as a whole. Furthermore, data from BLS show that only 1.0 percent of young workers engaged in electronically mediated (gig) work in May 2017.

    The much-hyped growth of the gig economy cannot be found in the 2017 survey of nonstandard work arrangements. Even young workers overwhelmingly opted for employment in traditional jobs. Most pressing are the problems of low wages, lack of benefits, and less than full-time hours for all workers without a college degree, but especially young workers without a college degree. These are the labor market policy issues that should be on the table.”

    Link to the report.

    • In an earlier report co-authored by CEPR and EPI, Eileen Appelbaum, Arne Kalleberg, and Hye Jin Rho analyze the degree of nonstandard employment for older workers, aged 55-65 and 65+: “Older workers are more likely to be independent contractors than any other age group in both 2005 and 2017. However, the share of all older workers who are independent contractors declined from 10.8% of those ages 55–64 and 18.3% of those ages 65+ in 2005, to 9.3% and 16.2%, respectively, in 2017.” Link.
    • “In any conference on the future of work, Uber and the gig economy deserve at most a workshop, not a plenary.” Lawrence Mishel’s 2018 analysis found that Uber wages averaged $11.77 an hour, and that total hours worked in the gig economy “represent a very small share of total hours worked in the overall economy.” Link.
    • While part time, temporary, and casual labor may be declining, work induced precarity remains a prominent feature of the contemporary global landscape. For a substantive overview of the nature and development of precarious work, see Guy Standing’s 2011 book, The Precariat. Link.
    ‡ gig_economy labor_market precarity

    New Researchers: EQUAL DIVIDE

    Land distribution and the Great Divergence

    PhD Candidate YUZURU KUMON’s job market paper draws on village-level data of Ancient Japan to engage with longstanding debates over the origins of the industrial revolution. By 1700, wealth distribution in England was highly unequal, with 70% of the rural population landless. By contrast, landless peasants only accounted for 13% of the rural population in Japan. Unusually, Kumon argues that greater equality in Japanese society restrained demands for higher wages, thereby accounting in part for the country’s failure to industrialize.

    From the introduction:

    “Early modern Japan had a peculiar Malthusian equilibrium where wages were below subsistence level. The population of the poor were decreasing. Population was propped up by a sufficient number of land-rich households whose population growth kept total population in equilibrium. Over the long-run, highly equal land distribution led Japan to develop on the path of a labor abundant economy with low wages, low GDP per capita, and high population as its key features. However, the low wages did not preclude Japan from developing economically. Rather, technologies were developing on a labor intensive path.

    What were the fundamental causes that led early modern Japan to become such an equal society? A first likely factor is inheritance and adoption. In the pre-industrial world, the number of heirs were randomly determined due to a combination of fertility and mortality. However, Japanese households practiced adoption which assured that richer households had at least one heir, effectively hedging against this risk. A second likely factor is the re-distributive power of the village council. In early modern Japan, the village as a whole was responsible for paying taxation. The village council was always concerned with keeping the village land-labor ratio at a optimal level.”

    Link to the paper, and to Kumon’s website.

    ‡ industrial_revolutions history new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • At the Phenomenal World, JFI’s Stephen Nuñez and Sara Constantino interview the immensely influential sociologist Mark Granovetter, author of one of the most cited social science papers of all time: “The Strength of Weak Ties.” Link to the interview.
    • A new study by Amy Finkelstein, Nathaniel Hendren, and Mark Shepard finds that “even modest premiums are a major deterrent to universal coverage: subsidies as high as 75% still result in less than half of the eligible population enrolling.” Link.
    • Scott Lynch and Bryce Bartlett review the history of Bayesianism in social science research. Link.
    • From research group Aqueduct, a series of tools mapping water risk around the world, including risk levels for flood, drought, and water stress. Link. See also this NYT article on severe drought risk worldwide.
    • A new CBO working paper by Yiqun Gloria Chen on the relationship between inflation and expectations. Link. And link to coverage at Bloomberg: “It turns out Wall Street can get a better handle on the inflation outlook by trusting ordinary Americans.”
    • Adam Tooze in the LRB on the history of the SPD and its role in the current political crises of Germany. Link.
    • “Supercentenarians and the oldest-old are concentrated into regions with no birth certificates and short lifespans. In the United States, supercentenarian status is predicted by the absence of vital registration.” Link.
    • In a new paper, Naomi Lamoreaux “sets recent expressions of alarm about the monopoly power of technology giants such as Google and Amazon in the long history of Americans’ response to big business.” Link.
    • Trump’s HUD has proposed regulations under which “a company accused of discrimination would be able ‘defeat’ that claim if an algorithm is involved. A hypothetical bank that rejected every loan application filed by African Americans and approved every one filed by white people, for example, would need to prove only that race or a proxy for it was not used directly in constructing its computer model.” Link.
    • “Shocks to firm productivity are passed on as variation in worker wages. The variation is high for high-skilled workers. Unskilled workers, perhaps due to union or minimum wage protection, experience smaller fluctuations.” Link.
    • On Ken Opalo’s Africanist Perspective: the future of taxation, on Russia’s “real-time” tax collection scheme. Link. And link to FT coverage of the same.
    • “Conditions of material scarcity and the potential for profit thrust both foreign and Spanish coastal inhabitants into vast networks of illegal commerce. This project focuses specifically on the illicit slave trade and Afro-Caribbean contrabandists, the material culture of smuggled goods in Venezuelan daily life, and violent colonial opposition to anti-contraband strictures through several mid-eighteenth century trade uprisings. Smugglers’ shadowy existence between empires revises our understanding of interimperial contact, local identity formation, commercial autonomy, and popular protest in the early modern world. In its complicated and criminal nature, covert commerce also connects large structural shifts in the burgeoning eighteenth-century global economy to local petty traders.” Link.

  5. Where is the Artist?

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    COMPETING VALUES

    The state of a new pedagogical field

    Technology companies are coming under increased scrutiny for the ethical consequences of their work, and some have formed advisory boards or hired ethicists on staff. (Google’s AI ethics board quickly disintegrated.) Another approach is to train computer scientists in ethics before they enter the labor market. But how should that training—which must combine practice and theory across disciplines—be structured, who should teach the courses, and what should they teach?

    This month’s cover story of the Communications of the Association for Computing Machinery describes the Embedded EthiCS program at Harvard. (David Gray Grant, a JFI fellow since 2018, and Lily Hu, a new JFI fellow, are co-authors, along with Barbara J. Grosz, Kate Vredenburgh, Jeff Behrends, Alison Simmons, and Jim Waldo.) The article explains the advantages of their approach, wherein philosophy PhD students and postdocs teach modules in computer science classes:

    “In contrast to stand-alone computer ethics or computer-and-society courses, Embedded EthiCS employs a distributed pedagogy that makes ethical reasoning an integral component of courses throughout the standard computer science curriculum. It modifies existing courses rather than requiring wholly new courses. Students learn ways to identify ethical implications of technology and to reason clearly about them while they are learning ways to develop and implement algorithms, design interactive systems, and code. Embedded EthiCS thus addresses shortcomings of stand-alone courses. Furthermore, it compensates for the reluctance of STEM faculty to teach ethics on their own by embedding philosophy graduate students and postdoctoral fellows into the teaching of computer science courses.”

    A future research direction is to examine “the approach’s impact over the course of years, for instance, as students complete their degrees and even later in their careers.”

    Link to the full article.

    • Shannon Vallor and Arvind Narayanan have a free ethics module anyone can use in a CS course. View it here. A Stephanie Wykstra piece in the Nation on the state of DE pedagogy notes that the module has been used at 100+ universities. Link.
    • In February 2018, we wrote about Casey Fiesler’s spreadsheet of tech ethics curricula, which has gotten even more comprehensive, including sample codes of ethics and other resources. Jay Hodges’s comment is still relevant for many of the curricula: “Virtually every discipline that deals with the social world – including, among others, sociology, social work, history, women’s studies, Africana studies, Latino/a studies, urban studies, political science, economics, epidemiology, public policy, and law – addresses questions of fairness and justice in some way. Yet the knowledge accumulated by these fields gets very little attention in these syllabi.” Link to that 2018 letter.
    • At MIT, JFI fellow Abby Everett Jacques teaches “Ethics of Technology.” An NPR piece gives a sense of the students’ experiences. Link.
    ‡ digital_ethics education

    New Researchers: INSTITUTION CONTRAST

    The development of Myanmar’s industrial relations system

    In her dissertation, PhD candidate JINYOUNG PARK recounts the development of corporatism during Myanmar’s transition out of five decades of dictatorship. Her research considers the promotion of corporatism by the International Labor Organization, as well as its role in suppressing the ability of unions to exercise political power.

    From the introduction:

    “The transition away from authoritarian rule in Myanmar has led to a highly complex interplay between militant and corporatist labor strategies, and domestic and international actors. Compared to other Asian countries experiencing transition, where a political pro-labor power shift or militant mobilization of workers preceded the adoption of corporatism into discourse and IR institutions, Myanmar’s military-backed civilian government built IR institutions as a part of reforms and corporatism was the theoretical framework underpinning these institutions, in the form of tripartite structures in which unions and employers have consultative status on labor policies.”

    Link to the paper.

    ‡ industrial_relations history new_resesarchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • JFI fellow Francis Tseng has a new post up on Phenomenal World, which examines the politics of peer-to-peer internet technologies: “I consider whether infrastructural decentralization is an effective way to counter existing regimes of political centralization. The cyber-utopian dream failed to account for the exogenous pressures that would shape the internet—rosy narratives of infrastructural decentralization seem to be making a similar misstep.” Link.
    • In response to Marshall Steinbaum’s recent Phenomenal World post and working paper on student debt and the racial wealth inequality, Louise Seamster blogs at scatterplot on some differences in their analysis that hinge on how to measure the wealth gap. Link to Seamster’s post.
    • “We find that conditions to privatize state-owned enterprises exert significant detrimental effects on corruption control.” Bernhard Reinsberg, Thomas Stubbs, Alexander Kentikelenis, and Lawrence King on the impact of IMF conditionalities in emerging economies. Link.
    • JW Mason on government debt. Link.
    • For the data labor files: a community based movement called the YouTubers Union, which strives to advocate for content creators on the platform, has joined forces with Europe’s largest trade union, IG Metall in Germany. Link to coverage in Vice, link to the partnership’s site, FairTube.
    • At VoxEU, Jan Mischke, Hans‐Helmut Kotz, and Jacques Bughin consider labor’s declining share of income in light of supercycles, boom-bust effects, and rising depreciation. Link.
    • Via Brad DeLong: “Perfect Capitalism, Imperfect Humans: Race, Migration, and the Limits of Ludwig von Mises’s Globalism” by Quinn Slobodian. Link.
    • Leah Brooks and Zachary Liscow study the costs of infrastructure spending over time: “We provide suggestive evidence of the determinants of the increase in spending per mile. In particular, the increased spending per mile coincides with the rise of ‘citizen voice’ in government decision-making in the early 1970s. And rising incomes and housing prices nearly completely statistically explain the increase in costs. We also largely rule out several common explanations for rising costs, such as increases in per-unit labor or materials prices. ” Link.
    • Via Dan Simpson at StatModeling, an article by Jim Hodges on statistical models and experimentation: “Why do we, as a discipline, have so little understanding of the methods we have created and promote?” Link to the paper, link to Simpson’s (brief) post on it.
    • From Naked Keynesianism: Why do we need a theory of value? Link.
    • “The Bolshevik Revolution brought profound social changes to the modern world. This worker-led revolution, with aspirations far beyond the country of origin, became a threat and symbol of revolution to ruling elites around the world. The Bolshevik Revolution and the formation of Comintern effectively enhanced elites’ perceptions of a credible revolutionary threat, as it affected both the capacity and motivation of labor movements, but also the nature and interpretation of information signals, thus incentivizing policy concessions such as reduced working hours and expanded social transfer programs. We assess our argument by using original qualitative and quantitative data. First, using extensive archival resources, we document a change in perceptions of revolution, but also explicitly strategic policy concessions. Second, we use party- and union representatives at the 1919 Comintern meeting as an indicator of the credibility of the domestic revolutionary threat in cross-national analysis. We find that states facing higher revolutionary threats expanded various social policies to a much greater extent.” By Magnus Rasmussen and Carl Knutsen. Link to the paper.

  6. Soliloquy

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    DISPARATE GENESES

    Inherited institutions and the early American welfare state

    Many recent policy proposals are variations on European programs implemented throughout the twentieth century. Despite their marked diversity, European welfare states share a foundation of social protections largely responsible for their lower rates of inequality. Theories on the development of this safety net, whether employee– or employer-driven, hold little explanatory power in the American context; they can’t tell us why the US failed to expand the early pension system of the Civil War, or why protections for female workers and mothers preceded the sort of male oriented, class based policies which were common in Europe.

    In her 1992 classic book, Harvard sociologist Theda Skocpol offers a compelling account of the development of modern social provisions in the United States. Conceptually, her narrative balances path dependency with historical contingency, stressing the “fit” between politicized group formations and the design of government institutions.

    A brief summary of her conclusions, from the introduction:

    “In certain European countries, state bureaucratization preceded the emergence of parliamentary parties, or the democratization of the male electorate. When political parties emerged in such circumstances, they had to make programmatic appeals to collectively organized constituents, including organized workers. Circumstances were sharply different in the 19th century United States, where no pre-modern centralized bureaucracy held sway, and where full democratization of the electorate for white males was virtually completed nationwide by the 1840s.

    Because they were already voting, American workers did not need to mobilize along class lines to overcome exclusion from suffrage. But patterns of exclusion from electoral politics shaped the possibilities of women’s political consciousness. National and local groups claiming to speak for the collective interests of women were able to mount ideologically inspired efforts on behalf of maternalist welfare policies, outside of parties or regular electoral politics.”

    Link to the publisher page.

    • In their more recent, widely cited paper, Alberto Alesina, Edward Glaeser, and Bruce Sacerdote trace the weakness of America’s welfare system to race, concluding: “Racial animosity in the US made redistribution to the poor, who are disproportionately black, unappealing to many voters.” Link.
    • More on Civil War pensions: A focused analysis from Skocpol in 1993, and a detailed legislative history submitted as a PhD dissertation by John William Oliver in 1917. Link and link.
    • “By the turn of the 20th century, more than 350,000 women were gainfully employed in New York City, making it the largest urban concentration of female workers in the country. The Women’s Trade Union League of New York served as an important training ground for working women and upper-class social reformers alike.” Nancy Schrom Dye on the WTULNY and the cross-class alliances it forged. Link.
    ‡ welfare history labor_movements

    New Researchers: COMBINED EQUILIBRIUM

    Currency unions and the inflationary effects of Independent Central Banks

    Our early June newsletter considered the politics of central bank independence (CBI). In her job market paper, Economics PhD candidate CHRISTINE OLIVIA STRONG develops a novel measure of CBI in order to determine it’s impact on price stability in 30 African countries—12 members, and 18 non-members of the CFA currency zone.

    From the paper:

    “This paper develops a new measure of CBI based on both the turnover rates of central bank governors and measures of alliance with the government in power. We find that Central bank governors in non-CFA countries are 2.4 times more likely to be prematurely removed than governors in CFA countries, and that a higher turnover rate leads to an increase in inflation in both the full sample and the non-CFA countries.”

    Link to the paper, and to Strong’s website.

    ‡ central_bank_independence inflation new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • “The idea that student debt cancellation is a giveaway to the rich just isn’t sustainable in the data.” In this week’s Phenomenal World post, Marshall Steinbaum disputes the regressivity of recent proposals to cancel student debt. Link.
    • Jessica Morley and Luciano Floridi examine the ethics of integrating “algorithmically-driven interactions between human, artificial, and hybrid agents” into the existing infrastructure of Britain’s NHS. Link.
    • “If monopsony is pervasive under conditions of laissez-faire, antitrust is likely to play only a partial role in remedying it, and other interventions in the labor market will be required.” Suresh Naidu and Eric A. Posner on the limitations of anti-trust laws. Link.
    • Of 300 colleges surveyed, 75% of financial aid applications are “unreadable by high school graduates of average reading comprehension ability” according to research by Z. W. Taylor, perhaps helping to account for the $2.6 billion in Pell grants which went unclaimed in 2018. Link.
    • “The 1917 Russian Revolution, followed by the end of World War I, saw a pan-European refugee crisis as millions of Russians fled abroad. After World War II, Europe was flung into crisis once again, with 30 million people displaced across the continent.” Eilish Hart analyzes the postwar origins of contemporary refugee protections. Link.
    • A new paper by Eric James Stokan finds that “state level EITCs may not be large enough to realize positive economic gains.” Link.
    • “We investigate the wage, employment and reallocation effects of Germany’s first-time
      introduction of the nation-wide minimum wage, finding that it raised wages and did not lower
      employment.” New research from Christian Dustmann, Attila Lindner, Uta Schönberg, Matthias Umkehrer, and Philipp vom Berge. Link.
    • Georgia State University researchers Dan Immergluck, Stephanie Earl, Allison Powell, and Jeff Ernsthausen analyze the use of ‘serial’ eviction filings, used to “discipline the tenant through state-sanctioned threat of removal.” Link.
    • David Arnold considers the consequences of Jair Bolsonaro’s planned privatizations for Brazil’s vulnerable workers. Link.
    • “In the 1950s and 1960s, the U.S. government paid the economics department at the University of Chicago, known for its advocacy of free markets and monetarism, to train Chilean graduate students. These students became known as the “Chicago Boys,” who implemented the first and most famous neoliberal experiment in Chile after 1973. Peruvian, Mexican, and other Latin American economics students followed a similar path and advocated a turn to neoliberal policies in their own countries. The Chicago Boys narrative has become an origin story for global neoliberalism. However, the focus on this narrative has obscured other transnational networks whose ideas possess certain superficial, but misleading, similarities with neoliberalism. I examine Chilean and Peruvian engagements with Yugoslavia’s unique form of socialism, its worker self-management socialism, which was part of a worldwide discussion of anti-authoritarian socialism. I first introduce the Yugoslav socialist model that inspired those in Chile and Peru. I then examine socialist discussions in Chile and Peru that called for decentralized, democratic socialism and looked to Yugoslavia for advice. I conclude by examining the 1990s postponement of socialism in the name of a very narrow democracy and realization of neoliberalism.” by Johanna Bockman. Link.

  7. …Höhere Wesen befehlen

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    PHENOMENAL WORLD

    Blog highlights

    At the Phenomenal World, we have been publishing pieces covering a wide-range of topics, many of which are common ground in this newsletter. Below, in no particular order, is a round-up of some recent work in case you missed it.

    Be on the lookout for upcoming posts over the next months—including work on counterfactual fairness by Lily Hu; an interview with scholar Destin Jenkins on race and municipal finance; an examination of the philosophy of Neyman-Pearson testing by Cosmo Grant; and a piece on UBI in the 1970s by Nikita Shepard—and subscribe to the Phenomenal World newsletter to get new posts directly in your inbox.

    As always, thank you for reading.

    • Max Kasy discusses the standard of social science experimentation—randomized controlled trials—and proposes, in a new working paper with his colleague Anja Sautmann, a new method for designing experiments that lead to the optimal policy choice. Link.
    • Amanda Page-Hoongrajok reviews James Crotty’s new book, Keynes Against Capitalism. Page-Hoongrajok discusses Keynes’s thought, Crotty’s interventions, and the relevance of these discussions for the current macroeconomic environment. Link.
    • Owen Davis surveys the monopsony literature, dispelling some persistent misunderstandings and clarifying its significance for the state of current economics research. Link.
    • Maya Adereth interviews the legendary and influential political scientist Adam Przeworski. In an expansive conversation, Przeworski discusses his intellectual trajectory, his experience and observations around Allende’s government in Chile, the neoliberal turn, and the future of popular politics. Link.
    • Greg Keenan examines the history of copyright formalities in the United States and Europe, arguing that the frequently derided US copyright regime is, in fact, well suited for the digital age. Link.
    • Hana Beach interviews basic income scholar Almaz Zelleke on the neglected history of feminist welfare rights activists’s campaigns for unconditional cash transfers, the complex relationship between advocacy and policy, and the current drive towards UBI. Link.
    ‡ phenomenal_world metaresearch economics politics digital_ethics

    New Researchers: DYNAMIC CONSOLIDATION

    The proliferation of capitalist economic relations in the United States

    Recent graduate of SUNY Binghamton and current part time sociology professor at Drexel University JAMES PARISOT writes about the development of capitalism and the international state system. In a paper summarizing his dissertation research, he studies how the United States transitioned from a “society with capitalism” to a “capitalist society.” His account details the wide variety of labor relations and alternative trajectories underpinning this development:

    “If anything characterizes this history, it is complex uneven development. The origins of capitalism are not found in the black and white class relations of north and south, but in the complex borderlands and grey areas of history, in which back and forth movements for and against wage labor took place, in which the modern construct of race was born, wherein patriarchy was remade through the development of ‘public’ and ‘private’ space, and whereby the middle ground between settlers and natives was destroyed to pave the way for an ‘empty’ space for capital to remake itself in its own image.”

    Link to the paper, and to Parisot’s website.

    ‡ history labor_market new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • We’re hiring a digital ethics fellow, and also soliciting applications for a seminar on economic mobility in New York City led by Pascale Mevs.
    • At VoxEU, a post on digital currency areas: “Digitalisation will break barriers and cross borders. But, because of its many inseparable dimensions, it may ultimately lead to an increased fragmentation of the international financial system.” Link.
    • “Not everyone believes in the coming AI Jobpocalypse, but everybody who has studied the question is sure that the biggest growth area in employment in the developed world is going to be care, especially care of the elderly. At the moment, a great deal of this care work is either done for free or very badly paid. Unwaged and underpaid work can be ameliorated by UBI, which gives a direct cash sum to unpaid workers, underpaid women and unremunerated carers.” John Lanchester makes the case for a UBI in the London Review of Books. Link.
    • The Cold War origins of the “modeling strategy turn” responsible for integrating uncertainty into recursive optimization and transforming both engineering and macroeconomics. Link.
    • Rather than increasing study time and mental health, researchers Philip Oreopoulos and Uros Petronijevic find that online coaching causes students to “adjust grade expectations downward.” Link. ht Sidhya
    • Defenders of the present EITC structure, which offers no credit to people with no income, often cite the psychological benefits associated with the “dignity of work.” In a new study, Daiga Kamerāde, Senhu Wang, Brendan Burchell, and their colleagues found that just 8 hours of work a week are sufficient to produce these benefits, suggesting that working hours mandated by the present EITC may not increase wellbeing to the degree that advocates claim. Link.
    • “Aggregate Effects of Budget Stimulus: Evidence from the Large Fiscal Expansions Database” by Jérémie Cohen-Setton, Egor Gornostay and Colombe Ladreit de Lacharrière. Link.
    • Austan Goolsbee and Chad Syverson find significant monopsony power over tenure track faculty in the higher education labor market. Link.
    • “While predictive tools often present recommendations, there is little oversight as to how decision-makers may overrule or follow them.” A new paper by Alex Albright analyzes the introduction of risk scores to guide bail decisions in Kentucky, finding that the policy increased racial disparities in initial bond. Link.
    • An analysis of cost and quality of housing in 7 European cities over 500 years, from Piet Eichholtz, Matthijs Korevaar, and Thies Lindenthal. Link.
    • Tim Higginbotham weighs in on claims that Alaska’s 440 million dollars in budget cuts were made necessary by the state’s Permanent Fund Dividend: “The 1.2 billion dollar budget deficit could be immediately closed with a move as simple as eliminating the 1.2 billion dollars in deductible tax credits that will be lost to oil companies this year.” Link.

  8. The River

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    APPROPRIATION FRICTION

    Swedish wage earner funds and their limitations

    Beyond growing calls for welfare expansion and a more progressive tax system, recent policy debates have begun to consider alternative models of firm ownership. Last year, the UK Labour party published a report outlining a path towards a more diverse set of ownership arrangements, including worker cooperatives and municipally owned service providers. The party also articulated an intention to transition ownership of up to 10% of shares to workers in large firms. More recently, the Bernie Sanders campaign announced a proposal for the formation of inclusive ownership funds, whereby large corporations contribute a portion of their stocks to an employee controlled fund. This comes in addition to Elizabeth Warren’s Accountable Capitalism Act, which calls for increased workers representation on company boards.

    These recent proposals are distinctly reminiscent of programs put forward throughout the twentieth century, the most famous of which is Sweden’s 1976 Meidner Plan. In his 1992 book, Princeton politics professor JONAS PONTUSSON analyzes the origins of the plan, and the barriers to its successful implementation. He compares the movement for wage earner funds with that of co-determination, suggesting that the failure of the former has to do with the politics of legislation:

    “In unfavorable political circumstances, it made sense for organized business to avoid major political confrontation and instead use post-legislative bargaining to define co-determination. By contrast, the Meidner Plan and subsequent wage-earner funds proposals left very little room for post-legislative bargaining. In other words, the co-determination offensive was a legislative success for the same reason that the implementation of new legislation became a disappointment for labor.

    Organized business spent about as much on its advertising and media campaign against wage earner funds in 1982 as the five parliamentary parties spent on the election campaign that same year. But couldn’t the labor movement have devoted more resources to acquiring the expertise needed to influence industrial policy? The final lesson seems to be that when industrial policy, and investment policy more generally, fails to address wage earner’s immediate concerns, they are bound to become less supportive of further efforts to democratize investment decisions.”

    Link to the book chapter, and link to an article in which Pontusson assesses the diluted version of the plan which was implemented in 1983.

    • “The concept of a society which is built on moral values remains, in my view, too promising to be extinguished by inhuman market forces.” The disintegration of the Swedish model, in Rudolf Meidner’s words: Link. See also this interview with Meidner from 1998. Link.
    • In the largest study of its kind, Joseph Blasi, Douglas Kruse and Dan Weltmann explore the impact of employee stock ownership plans (ESOP) on firm performance, concluding that “Privately held ESOP companies were only half as likely as non-ESOP firms to go bankrupt or close, had significantly higher post-adoption annual employment and sales growth, and demonstrated higher sales per employee.” Link.
    • In 1987, political theorist Jon Elster argued that the plan’s failure was the result of a fundamental problem in its conception of justice, which would leave much of the real decision making capabilities in the hands of the union bureaucracy. Link.
    • A report on Public-Common Partnerships, an “alternative institutional design that moves us beyond the overly simplistic binary of market/state.” Link.
    ‡ ownership industrial_policy meidner

    New Researchers: RESOURCE CUTOFF

    The effects of underfunding and course shutouts at public two-year colleges

    Postdoc at University of Michigan SILVIA ROBLES examines the mechanisms by which funding disparities between institutions affect student outcomes. Comparing the University of California System and the California Community College system, which receive $32,368 and $13,021 per full-time student respectively, Robles finds that course oversubscription is a key driver of non-completion rates for students in the CCC system.

    From the paper:

    “The paper studies traditional community college students with a stated interest in either earning their associates degree or transferring to a four-year college. The reduced form results show that missing a waitlist cutoff significantly increases the probability of sitting out the term by 2.4 percentage points. That is, students who miss a cutoff are more likely to enroll in zero courses in the concurrent term, a phenomenon we call same-semester drop-out. This represents a 36% increase relative to the same-semester dropout rate of 6.6% among students who do not miss a waitlist cutoff. The evidence of large enrollment impacts from a relatively small friction, such as missing the waitlist cutoff for one section, demonstrates the potential for oversubscribed courses to meaningfully alter a student’s trajectory.”

    Link to the paper, and link to Robles’s UMich page.

    ‡ higher_education new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • On the Phenomenal World, Amanda Page-Hoongrajok reviews James Crotty’s Keynes Against Capitalism. Link.
    • We are seeking applications for JFI fellow Pascale Mevs’s upcoming seminar series titled “Social and Economic Mobility in NYC: Intersections of Research, Policy, and Practice.” Click here for more info, and here to apply.
    • At VoxDev, Rachael Meager on the “average effect of microcredit.” Link.
    • A small minimum wage round-up: the CBO released a report on the effects of the minimum wage for individual and family income, finding, overall, that minimum wage hikes will raise wages more than any job losses it may cause. Link. Arindrajit Dube comments on their findings, and relates them to his own (extensive and leading) research on the topic: “I think the job losses it projects are too large based on the weight of high quality evidence.” Link. An earlier general interest piece by Dube provides a helpful overview of the state of the evidence. Link. Finally, a new paper from the Philadelphia Fed finds that minimum wage increases reduce rental defaults substantially, with the caveat that the effect decreases over time as landlords increase rents. Link.
    • Berk Özler at the World Bank covered our two-part post by Max Kasy on the politics of machine learning. Link to Özler’s discussion, and link to Max’s post on the blog.
    • Marco Di Maggio, Ankit Kalda, and Vincent Yao on the student debt discharge from National Collegiate. Among the effects for borrowers with the debt relief shock: reduced indebtedness by 26%, less use of existing credit accounts, 11% decrease in likelihood of default on other accounts, increased geographic and employment mobility, and increased income. Link.
    • From MIT, global spending on clean energy is at its lowest point in six years. Link. At Science, solar plus batteries is now cheaper than fossil power. Link.
    • A new paper by Trevon Logan finds “a strong positive effect of local tax revenue on subsequent violence against black politicians. A dollar increase in per capita county taxes increases the likelihood of a violent attack by more than 25%. This provides the first quantitative evidence that political violence at Reconstruction’s end was related to black political efficacy. ” Link.
    • In the 1970s, “leaders in the United Auto Workers and other unions formed coalitions with civil rights and environmental groups, and advocated federal policies that would reduce both pollution and unemployment. This article argues that the defeat of these efforts, and the political marginalization of full employment and other social-democratic goals in the 1980s, resulted in a narrower conception of environmental justice among many scholars and activists.” Link.
    • An interview with anthropologist and architecture theorist Michał Murawski on Poland’s Palace of Culture and Science. Link.
    • Francois de Soyres, Alen Mulabdic, and Michele Ruta examine the gains and losses for countries participating in Belt and Road Initiative projects. Link.
    • On the spread of Hindu-Arabic numerals into European mathematics. “New economic complexity raised the need for a higher level of computing power, especially to solve calculations of interest and exchange rates. It is at this stage that merchant-bankers, who were already literate and numerate, realized that Hindu-Arabic numerals suited their needs better than Roman ones. Arithmetic with Hindu-Arabic numerals became part of the required training for merchant-bankers.” Link.

  9. Model of a Cabin

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    SELECTED MOBILITY

    Examining the college premium

    Higher education is widely understood to be a major driver of intergenerational mobility in the United States. Despite the clear (and growing) inequalities between and within colleges, it remains the case that higher education reduces the impact that parental class position has on a graduate’s life outcomes.

    In an intriguing paper, associate professor of economics at Harvard XIANG ZHOU scrutinizes the implied causal relationship between college completion and intergenerational mobility. Specifically, Zhou uses a novel weighting method “to directly examine whether and to what extent a college degree moderates the influence of parental income” outside of selection effects, seeking to distinguish between the “equalization” and “selection” hypotheses of higher ed’s impact on intergenerational mobility.

    From the paper:

    “Three decades have passed since Hout’s (1988) discovery that intergenerational mobility is higher among college graduates than among people with lower levels of education. In light of this finding, many researchers have portrayed a college degree as ‘the great equalizer’ that levels the playing field, and hypothesized that an expansion in postsecondary education could promote mobility because more people would benefit from the high mobility experienced by college graduates. Yet this line of reasoning rests on the implicit assumption that the ‘college premium’ in intergenerational mobility reflects a genuine ‘meritocratic’ effect of postsecondary education, an assumption that has rarely, if ever, been rigorously tested.

    In fact, to the extent that college graduates from low and moderate-income families are more selected on such individual attributes as ability and motivation than those from high-income families, the high mobility observed among bachelor’s degree holders may simply reflect varying degrees of selectivity of college graduates from different family backgrounds.”

    In sum, Zhou finds that the “selection” hypothesis carries more weight than the “equalization” hypothesis. One implication of this finding is that “simply expanding the pool of college graduates is unlikely to boost intergenerational income mobility in the US.” Link to the paper.

    • A 2011 paper by Michael Bastedo and Ozan Jaquette looks at the stratification dynamics affecting low-income students within higher ed. Link. A paper from the same year by Martha Bailey and Susan Dynarski surveys the state of inequality in postsecondary education. Link.
    • An op-ed by E. Tammy Kim in the Times argues for higher-education as a public good. Link.
    • Marshall Steinbaum and Julie Margetta Morgan’s 2018 paper examines the student debt crisis in the broader context of labor market trends: “Reliance on the college earnings premium [as a measure of success] is that it focuses primarily on the individual benefit of educational attainment, implying that college is worthwhile as long as individuals are making more than they would have otherwise. But in the context of public investment in higher education, we need to know not only how individuals are faring but also how investments in higher education are affecting our workforce and the economy as a whole.” Link.
    ‡ higher_education credentials mobility

    New Researchers: UNIVERSAL ASSOCIATION

    How childcare impacts women’s participation in the labor market

    University of Rochester PhD candidate and soon to be assistant professor of economics at Temple University VIVIANE SANFELICE studies development economics with a focus on the public sector. In a 2018 working paper, she examines the effect of childcare accessibility on women’s labor force participation rates by comparing outcomes for mothers of children from different age groups in Brazil.

    From the abstract:

    “My findings show that the availability of formal childcare allows mothers to join the job market. Among women sensitive to the availability of free care, three fourths of their employment rate is explained by whether or not they obtain a public slot. This matches the dominant finding of the literature to date: maternal employment is most responsive to childcare expansion in contexts where either it or alternative childcare providers are low prior to the intervention.”

    Link to the paper, and to Sanfelice’s website.

    ‡ gender labor_market new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • Call for fellowship applications: “The Jain Family Institute is seeking a research fellow in ethics, law, human rights, and/or international relations to support our work with a major international agency on the ethics and governance of artificial intelligence.” See more on our site.
    • Call for seminar participants: JFI fellow Pascale Mevs will be hosting a free seminar series this fall and winter, titled “Social and Economic Mobility in NYC: Intersections of Research, Policy, and Practice.” Click here for more info, and here to apply.
    • On the blog: part two of Max Kasy’s thoughts on the politics of machine learning. Link.
    • The US faces not one, but many opioid crises, according to new research by Shannon Monnat, David Peters, Mark Berg, and Andrew Hochstetler. Link.
    • On monopsony and wages in the world’s fastest growing economies: Wyatt Brooks, Joseph Kaboski, Yao Amber Li, and Wei Qian find that concentrated market power “lowers the labor share by up to 10 percentage points in China and 15 percentage points in India.” Link.
    • A big report from the OECD asks, “Can Social Protection Be an Engine for Inclusive Growth?” The report has many examples of the impacts of cash transfers, both conditional and unconditional, and notes, “Cash transfers have proliferated, particularly in low- and middle-income countries; over 130 countries use direct, regular and noncontributory cash payments as income support and poverty reduction strategies central to their social protection systems.” Link.
    • “The richest American men live 15 years longer than the poorest men, while the richest American women live 10 years longer than the poorest women.” From the Health Inequality Project. Link.
    • A database on the history of the Indian Ocean. Link.
    • “The most recent data indicates that American households are about $14 trillion in debt. The interest being paid back on all of this debt is preventing people from making new purchases. But household spending comprises 17% of total spending in the economy, and rich households hold most of their income in savings. As low and middle income families pay back their debts, we not only see declining living standards, but we also see the opening for another recession.” An interview with Steven Pressman. Link.
    • Debating Spinoza’s political philosophy: Hasana Sharp reviews Christopher Skeaff’s Becoming Political. Link.
    • The Poor People’s Moral Budget: A substantial new report edited by Barnes, Koshgarian, and Siddique emphasizes “decent and affordable housing, free public education, a robust social safety net and social security, and sustainable job creation.” The report cites Darity and Hamilton on a job guarantee rather than arguing for a guaranteed income (though it also emphasizes expansion of the safety net by other means). Link.
    • Fascinating report on the banking crisis unfolding in Libya. Link.
    • “This paper studies the effect of punishment severity on jury decision making using archival data from London’s Old Bailey Criminal Court from 1772 to 1871. We exploit two natural experiments in English history, resulting in sharp decreases in punishment severity: the offense-specific abolition of capital punishment and the temporary halt of penal transportation during the American Revolution. Using difference-in-differences to study the former and a pre-post design for the latter, we find a large, significant, and permanent impact on jury behavior: juries are more likely to convict overall and across crime categories. Moreover, the effect size differs with defendants’ gender.” By Anna Bindler and Randi Hjalmarsson. Link. ht Jennifer Doleac.

  10. Quandary

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    HOW RESEARCH AFFECTS POLICY

    Results from Brazil

    How can evidence inform the decisions of policymakers? What value do policymakers ascribe to academic research? In January, we highlighted Yale’s Evidence in Practice project, which emphasizes the divergence between policymakers’ needs and researchers’ goals. Other work describes the complexity of getting evidence into policy. A new study by JONAS HJORT, DIANA MOREIRA, GAUTAM RAO, and JUAN FRANCISCO SANTINI surprises because of the simplicity of its results—policymakers in Brazilian cities and towns are willing to pay for evidence, and willing to implement (a low-cost, letter-mailing) evidence-based policy. The lack of uptake may stem more from a lack of information than a lack of interest: “Our findings make clear that it is not the case, for example, that counterfactual policies’ effectiveness is widely known ‘on the ground,’ nor that political leaders are uninterested in, unconvinced by, or unable to act on new research information.”

    From the abstract:

    “In one experiment, we find that mayors and other municipal officials are willing to pay to learn the results of impact evaluations, and update their beliefs when informed of the findings. They value larger-sample studies more, while not distinguishing on average between studies conducted in rich and poor countries. In a second experiment, we find that informing mayors about research on a simple and effective policy (reminder letters for taxpayers) increases the probability that their municipality implements the policy by 10 percentage points. In sum, we provide direct evidence that providing research information to political leaders can lead to policy change. Information frictions may thus help explain failures to adopt effective policies.”

    Link to the paper.

    • New work from Larry Orr et al addresses the question of how to take evidence from one place (or several places) and make it useful to another. “[We provide] the first empirical evidence of the ability to use multisite evaluations to predict impacts in individual localities—i.e., the ability of ‘evidence‐based policy’ to improve local policy.” Link.
    • Cited within the Hjort et al paper is research from Eva Vivalt and Aidan Coville on how policymakers update their prior beliefs when presented with new evidence. “We find evidence of ‘variance neglect,’ a bias similar to extension neglect in which confidence intervals are ignored. We also find evidence of asymmetric updating on good news relative to one’s prior beliefs. Together, these results mean that policymakers might be biased towards those interventions with a greater dispersion of results.” Link.
    • From David Evans at CGDev: “‘The fact that giving people information does not, by itself, change how they act is one of the most firmly established in social science.’ So stated a recent op-ed in the Washington Post. That’s not true. Here are ten examples where simply providing information changed behavior.” Link. ht The Weekly faiV.
    • For another iteration of the question of translating evidence into policy, see our February letter on randomized controlled trials. Link.
    ‡ policymaking evidence

    New Researchers: AMPLIFICATION INCIDENCE

    Marginal propensity to consume and the aggregate effects of recessions

    In her job market paper, MIT economics PhD candidate CHRISTINA PATTERSON studies how “the differential exposure of workers to the effects of recessions contributes to the size of the recession.” Her empirical research documents that workers with higher marginal propensity to consume are more exposed to the effects of a recession, and that the “covariance between worker MPCs and the elasticity of their earnings to GDP is large enough to increase shock amplification by 40 percent over a benchmark in which all workers are equally exposed.” The paper explores policies that could stabilize these effects, including unemployment insurance for younger workers and monetary policy.

    From the paper:

    “The postwar U.S. economy is characterized by periodic large recessions. In the 11 recessions since 1945, gross domestic product fell by an average of 2 percent, and the unemployment rate spiked by an average of 2.3 percentage points. Most recently, in the Great Recession—the most severe downturn in the post-war period—GDP contracted by more than 4 percent, consumption fell by almost 3 percent, and the economy shed 8.6 million jobs. Recessions are also unequally distributed. In the labor market, the employment of small and young firms is particularly volatile, as are the earnings of both very low and very high earners. This project proposes a link between the heterogeneous impact of cyclical shocks and the size of recessions. I show that the unequal incidence of recessions increases the aggregate marginal propensity to consume and via this channel significantly amplifies recessions.”

    Link to the paper, link to Patterson’s website.

    ‡ macroeconomics labor_market new_researchers

    Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

    +++

    • New on our blog, the Phenomenal World: JFI Fellow and Harvard economics Professor Max Kasy puts down some thoughts about the politics of machine learning. (Part one of two.) Link. And sign up for our Phenomenal World newsletter to get new posts directly in your inbox.
    • At 3P, Matt Bruenig argues that the Survey of Consumer Finances, a very widely used source for estimations of the distribution of debt, “systematically understates how much student debt is carried by low-income individuals… and probably dramatically so.” Link.
    • Despite representing a huge improvement over the Official Poverty measure, the Supplemental Poverty Measure introduced by the Obama administration in 2011 fails to adequately consider the cost of healthcare. In a new paper, Sanders Korenman, Dahlia K. Remler, and Rosemary T. Hyson use the proposed Health Inclusive Poverty Measure to estimate the effect of Medicaid on child poverty. Link.
    • Sanjukta Paul on the double standard of antitrust law. Link.
    • Darrick Hamilton and Christopher Famighetti argue that homeownership rates for young people are lower than they’ve been in a century, and that reductions in the racial ownership gap made during the civil rights era “have now been lost.” Link.
    • ITEP’s analysis of Rashida Tlaib’s phase-in-free EITC expansion proposal. Link. And link to ESP’s Natalie Foster writing in Newsweek on the policy. ht Lauren
    • From a couple months ago: Gabriel Zucman, Emmanuel Saez, and Fernando Hoces de la Guardia develop a dynamic tool for analyzing Elizabeth Warren’s proposed wealth tax. Link.
    • Climate change and the collapse of the world’s first empire, by Vasile Ersak. Link.
    • “The neglect of radical uncertainty is a fundamental problem for modern economics.” John Kay on the legacy of economist G.L.S. Shackle. Link. For a deeper exploration of the origins and applications of this Keynesian concept, see James Crotty’s Keynes Against Capitalism. Link.
    • Ray Fair looks at the history of US infrastructure since 1929: “No other country has a pattern similar to that of the United States, namely a roughly monotonic decline in the ratio of infrastructure to GDP beginning around 1970. The United States appears to be a special case in this regard. The overall results thus suggest that the United States became less future oriented, less concerned with future generations, beginning around 1970.” Link.
    • From Developing Economics: “The Curious Case of M-Pesa’s Miraculous Poverty Reduction Powers.” Link. ht Sidhya
    • A report on how Kerala’s government and population developed swift and effective mutual aid strategies to overcome environmental disaster in the 2018 floods. Link.
    • “How did Europe escape the ‘Iron Law of Wages?’ Productivity growth can only explain a small fraction of the rise in output per capita. Population dynamics—changes of the birth and death schedules—were far more important determinants of steady states. We show how a major shock to population can trigger a transition to a new steady state with higher per-capita income. The Black Death was such a shock, raising wages substantially. Because of Engel’s Law, demand for urban products increased, and urban centers grew in size. European cities were unhealthy, and rising urbanization pushed up aggregate death rates. This effect was reinforced by diseases spread through war, financed by higher tax revenues. In addition, rising trade also spread diseases. In this way higher wages themselves reduced population pressure. We show in a calibration exercise that our model can account for the sustained rise in European urbanization as well as permanently higher per capita incomes in 1700, without technological change. Wars contributed importantly to the ’Rise of Europe,’ even if they had negative short-run effects. We thus trace Europe’s precocious rise to economic riches to interactions of the plague shock with the belligerent political environment and the nature of cities.” Voth and Voigtländer on “The Three Horsemen of Riches.” Link.