Category Archive: Sources

  1. Push Pull

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    PROGRESS UNCOUPLE

    Debating growth and the Green New Deal

    In past newsletters, we have highlighted research and policy proposals relating to the Green New Deal and the literature surrounding “degrowth”—the idea that the growth imperative is at odds with human flourishing. In a recent exchange, economist Robert Pollin debates sociologists Juliet Schor and Andrew Jorgenson on the relative merits of “decoupling” and “degrowth.” The former asserts that “economies can continue to grow while advancing a viable climate-stabilization project, as long as the growth process is decoupled from fossil-fuel consumption.” The latter holds that public discussions over combating climate change must turn “from growthcentricity to needs- and people-centered policies.”

    The authors share a commitment to increased public investment, and both sides emphasize the distributional consequences of decarbonization. Their debate turns on, and illuminates larger conversations regarding the discursive frameworks and metrics we use to understand economic life. Schor and Jorgenson see reducing GDP in the global north as one element of a program to radically restructure the principles of society; Pollin understands these efforts to muddy the mandate for immediate climate action.

    From Pollin:

    “Let’s assume that global GDP contracts by 10 percent over the next two decades, following a degrowth scenario. That would entail a reduction of global GDP four times larger than what we experienced over the 2007–2009 financial crisis and Great Recession. In terms of CO2 emissions, the net effect of this 10 percent GDP contraction, considered on its own, would be to push emissions down by precisely 10 percent—that is, from 32 billion tons to 29 billion. So, the global economy would still not come close to bringing emissions down to 20 billion tons by 2040.

    The overwhelming factor pushing emissions down will not be a contraction of overall GDP but massive growth in energy efficiency and clean renewable energy investments (which, for accounting purposes, will contribute toward increasing GDP) along with similarly dramatic cuts in fossil-fuel production and consumption (which will register as reducing GDP). In my view, addressing these matters in terms of their specifics is much more constructive than presenting broad generalities about the nature of economic growth, positive or negative.”

    Link to Pollin’s initial paper, link to Schor and Jorgenson.

    • Pollin elaborates on this point in his follow-up statement with a case study of Japan: “Despite the fact that Japan has been close to a no-growth economy for twenty years, its CO2 emissions remain among the highest in the world, at 9.5 tons per capita.” Link. Another recent article reviews and recaps the decoupling vs. degrowth exchanges. Link.
    • Schor and Jorgenson’s follow-up challenges Pollin’s conviction that decoupling is either possible or efficient: “After decades of promises from advocates of green growth that absolute decoupling will happen, the record is dismal. The simple point about growth is therefore that it makes the nearly impossibly high mountain that we need to climb even steeper. Why rule out an important source of emissions reductions before we’ve even started?” Link.
    • Another iteration of the debate in a compilation of INET papers: Schröder et al argue that “if past performance is relevant for future outcomes, our results should put to bed the possibility of ‘green growth.'” Michael Grubb takes a different tack: “Before declaring that history has set limits on what is possible, we need to be extremely careful. The future has already started, though its beginnings may be modest.” Link.
    • From Autonomy, a proposal for a shortened work week—a key element of several green degrowth arguments. Link.
    • Mark Paul, Anders Fremstad, and JW Mason offer a brand new paper on US decarbonization. “In an economy facing persistent demand constraints and weak labor markets, public spending on decarbonization will raise wages and living standards.” Link.
    ‡ green_new_deal climate_policy metrics

    New Researchers: VOLATILE HOURS

    On the distribution of precarious work

    In a new paper, Berkeley PhD student JOE LABRIOLA and co-author DANIEL SCHNEIDER examine the details of precarious work in the United States. Extending existing research on the growth of precarious labor—which has suggested at the relationship between decreased worker power and precarity, and shown that workers of lower socio-economic classes are disproportionately working precarious jobs—the authors identify the amount and (in)stability of work hours.

    From the abstract:

    “We make novel use of the panel nature of the nationally-representative Current Population Survey (CPS) to estimate intra-year volatility in the actual hours respondents report working in the previous week across four consecutive survey months. Using this new measure, we then show that, net of demographic characteristics and controls for occupation and industry, low-wage workers experience disproportionately greater work hour volatility. Finally, we find evidence that reductions in marketplace bargaining power—as measured by higher state-level unemployment rates—increase wage- and education-based polarization in work hour volatility, while increases in associational power—as measured by union coverage—reduce wage-based polarization in work hour volatility.”

    Link to the paper.

    ‡ economics labor_markets 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 new paper by John Bound et al on “the supply side of building a skilled workforce”: “Declining funding induced public universities to shift toward tuition as their primary source of revenue. The evidence we present suggests that the cuts negatively affected degree attainment at the undergraduate and graduate levels.” Link.
    • What effects does UBI have on property crime? Richard Dorsett takes the case of the Alaska Permanent Fund. “The results provide evidence that the size of the payment is relevant, with larger amounts significantly reducing property crime.” Link to the paper, link to a ProMarket summary.
    • From the Center on Equitable Growth, a study on paid family care leave. “The unmet need for leave to care for a family member with a serious illness is actually more widespread and more frequent than it is for the other types of family leave.” By Jane Waldfogel and Emma Liebman. Link.
    • Leading sleep scientists call for the abolishment of Daylight Saving Time. Link.
    • Jürgen Schmidt on the 19th century German labor movement: “The history of the early German Labour movement, before the 1848 revolution, is thus very suitable a case study to analyse political remittances – as defined in the introduction of this special issue as an ‘act of transferring political principles, vocabulary and practices between two or more places.'” Link.
    • “The categorical eligibility option allows states to lift the gross income limit to further smooth the benefit cliff. ” From Elaine Waxman’s Congressional testimony on SNAP. Link.
    • Riots and political shifts: “We analyze measures of policy support before and after the 1992 Los Angeles riot—one of the most high-profile events of political violence in recent American history—that occurred just prior to an election. Contrary to some expectations from the academic literature and the popular press, we find that the riot caused a marked liberal shift in policy support at the polls. Investigating the sources of this shift, we find that it was likely the result of increased mobilization of both African American and white voters. Remarkably, this mobilization endures over a decade later.” Link.
    • “Ever wonder why you get so sleepy during conference talks? Lots of conference venues aren’t well-ventilated, causing CO2 to rise to levels that cause drowsiness.” Link to a fun thread, and link to a subsequent WaPo write-up.
    • Alain Cohn et al see what happens when you leave a wallet out in public. “In virtually all countries citizens were more likely to return wallets that contained more money. Both non-experts and professional economists were unable to predict this result.” Link.
    • A new INET database covers “total returns for all important asset classes—equity, housing, bonds, and bills—across 16 advanced economies from 1870 to 2015.” Link to the database, and link to a related paper, which shows that r>g for more countries, more years, and at a more dramatic rate than Piketty thought. Link, also, to a paper overview at INET.
    • “Instances of widespread internal political disorder such as civil wars propelled elites to use mass education as a means to instill values that would help prevent future rebellions against their authority. The statistical tests for this argument focus on assessing how a legacy of civil war impacts post-war investments in education provision. I exploit the geographic concentration of civil war in mid-nineteenth century Chile, and show that in the aftermath of the 1859 civil war—the causes of which had nothing to do with education provision—the central government made an unprecedented investment in mass schooling, and the expansion was greatest in those provinces that had rebelled against it.” By Agustina S. Paglayan. Link.

  2. Insulators (Magritte machine)

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    MOBILE COGNITION

    The political history of economic statistics

    Debates over the relevance of indicators like GDP for assessing the health of domestic economies are persistent and growing. Critics of such measures point to the failures of such measures to holistically capture societal wellbeing, and argue in favor of alternative metrics and the disaggregation of GDP data. These debates reflect the politics behind the economic knowledge that shapes popular understanding and policy debates alike.

    In his 2001 book Statistics and the German State, historian Adam Tooze examined the history of statistical knowledge production in Germany, covering the period from the turn-of-the-century to the end of the Nazi regime, “driven by the desire to understand how this peculiar structure of economic knowledge came into existence… and the relationship between efforts to govern the economy and efforts to make the economy intelligible through systematic quantification.”

    From the book’s conclusion:

    “We need to broaden our analysis of the forces bearing on the development of modern economic knowledge. This book has sought to portray the construction of a modern system of economic statistics as a complex and contested process of social engineering. This certainly involved the mobilization of economists and policy-makers, but it also required the creation of a substantial technical infrastructure. The processing of data depended on the concerted mobilization of thousands of staff. In this sense the history of modern economic knowledge should be seen as an integral part of the history of the modern state apparatus and more generally of modern bureaucratic organizations… The development of new forms of economic knowledge can therefore be understood as part of the emergence of modern economic government and as a sensitive indicator of the relationship between state and civil society.”

    Link to the book preview, link to the book page on Tooze’s website.

    • For a more generalized account of the political history of statistical knowledge (inclusive of economic statistics), see the The Politics of Large Numbers by Alain Desrosières. Link. Another excellent item in the history of statistical knowledge: A History of the Modern Fact, on the advent and impact of double-entry bookkeeping. Link.
    • In the Winter 2019 issue of the Journal of Economic Perspectives, Hugh Rockoff examines the political history of American economic statistics, and tracks the emergence and institutionalization of measures of “prices, national income and product, and unemployment.” Link.
    • Previously shared here, research by Aaron Benanev examines the institutional history linking the concept of “informality” and unemployment metrics developed by the International Labor Organization. Link to his paper.
    • A recent paper by Andrea Mennicken and Wendy Nelson Espeland surveys the quantification literature. Link. And a (previously shared) panel discussion on the historiography of quantification. Link.
    ‡ metrics history economic_history

    New Researchers: SOCIAL CALCULUS

    The historical integration of mathematics and economics in the United States

    RACHEL KNECHT’s PhD Dissertation is a history of the mathematization of the field of economics. Unlike existing literature, which questions how mathematics influenced economic theory in the 1930s and 1940s, Knecht’s research looks back to the early 19th century to ask why mathematics was thought to be relevant to economics in the first place. In her work, the development of mathematics as a field, and its applications to understandings of economic life, act as a lens into the cultural values, political dynamics, and social innovations of the time.

    From the introduction:

    “When one studies the history of mathematics in the nineteenth-century United States—the debates over what it was, how it could be made useful, how it should be taught, and who should do it—one quickly realizes that the economy did not follow a clear linear trajectory to its modern mathematical form. Instead, one sees that in a range of areas, Americans argued over what mathematics could do for their political project. They made choices about what mathematics were best for participating in and understanding economic life—concrete arithmetic, spatial geometry, abstract analytics, and eventually, dynamic, time-oriented calculus. In those contests, one finds a tension between democratic accountability and expert mystification, both based in claims to mathematical reasoning.”

    Link to the full dissertation.

    ‡ economics mathematics 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.

    +++

    • New on the Phenomenal World: renowned political economist Adam Przeworski discusses electoral politics, the making of the postwar consensus, and the neoliberal shift. Link.
    • “It’s arguable that some people are already taking over the world with artificial intelligence. AI is absolutely everywhere. But if you think of AI as machines that are almost exactly like humans, then you’re never going to see it.” Short but excellent interview with AI researcher Joanna Bryson. Link.
    • A new report by Chuck Marr and Yixuan Huang demonstrates how the existing EITC structure taxes single childless workers into poverty. Link.
    • A look at the challenges faced by China’s migrant workers. Link.
    • In a recent article, Aart-Jan Riekhoff, Oxana Krutova, and Jouko Nätti examine how wage bargaining structure shapes differences in labor market dynamics between low-skilled “outsiders” and high-skilled “insiders” across 30 European countries. They find that countries with active collective bargaining institutions exhibit far lower rates of dualization. Link.
    • “Social scientists commonly point to two modes of global-level institutional change: formal and fundamental transformations, like renegotiated treaties, or informal and incremental changes of a modest nature. The case of the IMF fits neither of these molds.” Alexander E. Kentikelenis and Sarah Babb examine how the IMF became the world’s foremost exporter of free markets. Link.
    • “Death by Derivatives: The opening of a canal in 1848 led to the birth of modern financial derivatives, and the early demise of some of the men who traded them.” by Michael Durbin. Link.
    • Florence Kondylis and John Loeser regress GDP according to 100,000 randomly drawn equators in order to reveal the spacial correlations which have the potential to bias cross-country regressions. Link.
    • “The argument that robots were the main culprit in the decline of U.S. manufacturing employment is not substantiated by what was actually happening in U.S. robotics, nor is it consistent with the experience of other countries.” Rian Whitton argues that deindustrialization, and not automation, is responsible for America’s employment woes. Link.
    • In the forthcoming Annual Review of Economics, Adrien Bouguen, Yue Huang, Michael Kremer, and Edward Miguel stress the feasibility and importance of evaluating the long-term effects of cash transfer and child health RCTs on living standards in poor countries. Link.
    • “We measure technological progress in oceanic shipping by using a large database of daily log entries from ships of the British and Dutch navies and East India Companies to estimate daily sailing speed in different wind conditions from 1750 to 1850. Against the consensus that the technology of sailing ships was static during this period, we find that average sailing speed in a moderate breeze (the usual summer conditions in the North Atlantic) rose by one third between 1780 and 1830; with greater increases at lower wind speeds. About one third of this improvement occurs when hulls are first copper plated in the 1780s, but the rest appears to be the result of incremental improvements in sails, rigging, and hull profiles.” Link.

  3. Sketch for a Counter-Sky

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    MECHANICAL SHADOWS

    On central bank independence and the rise of shadow money

    Debates over the political impacts of Central Bank Independence (CBI) reached their peak in the late 90s and early 2000s, due to rising inequality and the volatility of financial markets. Initiated with the 1977 Federal Reserve Act and Paul Volcker’s subsequent term as chairman of the Fed, CBI was, and remains, a means of isolating the more “mechanical” field of monetary policy from the fleeting interests of politicians. In order to preserve stability and credibility, independent central banks have made inflation targeting the center point of their agenda. Critics of CBI have argued that the distinction between economic science and political incentives are not as clear as they might seem; low levels of inflation may benefit creditors and investors, but they harm those whose income entirely depends on rising wages. While monetary policy has distributional and political consequences, its decision makers are insulated from public accountability.

    Expanding the literature on the politics of CBI, BENJAMIN BRAUN and DANIELA GABOR examine its financial consequences. In a recently published paper, they argue that the anti-inflationary policies of central banks have catalyzed dependence on shadow money and shadow banking, key components of a broader trend towards financialization:

    “In the late 1990s, the US Federal Reserve was confronted with a peculiar predicament. While the world was celebrating central bank independence as a mark of ‘scientific’ economic governance after the populist era of monetizing government bonds, the US Federal Reserve worried about projections that the US government would pay down all its debt by 2012. A world without US government debt, they worried, was a world filled with monetary dangers. Market participants would not have a safe, liquid asset to turn to in times of distress.

    Rather than seeking to limit shadow money supply, the Fed actively encouraged its expansion, seeking market solutions to political problems. It lobbied Congress to ensure that holders of shadow money backed by private (securitized) collateral had the same legal rights to collateral as those holding shadow money issued against US government debt. The Fed also changed its lending practices, allowing banks to issue shadow money backed by private collateral to borrow from the Fed. These concrete steps contrast starkly with the picture of central banks watching passively from the margins, as financial institutions find new ways to monetize credit and circumvent rules.”

    Link to the article.

    • More contemporary iterations of the debate over CBI can be found in the comparison between a 2018 HKS working paper, which distinguishes between “political oversight” and “operational independence,” and a 2014 Levy Institute working paper which argues there is no practical meaning of operational independence at all. Link and link.
    • A primer on shadow banking, from Stijn Claessens and Lev Ratnovski at Vox EU. Link.
    • A new article by Andreas Kerna, Bernhard Reinsbergc, and Matthias Rau-Göhring finds that the IMF’s targeted lending practices actively encouraged the proliferation of independent central banks in low income economies. Link.
    • On CBI, inflationary targets, and the 2010 Eurocrisis, by Mark Copelovitch, Jeffry Frieden, and Stefanie Walter. Link.
    ‡ banking finance inequality

    New Researchers: MOBILE AGRARIAN

    The generational effects of land transfers

    Assistant Professor of Economics at Universidad de los Andes JUAN SEBASTIÁN GALÁN examines the 1968 Colombian agrarian reform, looking at the effects of land transfers on recipients and their children. Complicating similar research, by e.g. Abhijit Banerjee, which suggests that land transfers lock recipients into rural subsistence living, Galán finds that children of land recipients experienced higher intergenerational mobility.

    From the paper:

    “In contrast to a widely held view that land traps rural families in the countryside, these findings appear mediated by a relief of credit constraints that allowed recipients to migrate to urban centers and invest in the education of their children, who subsequently used these skills to find new opportunities in the modern economy.”

    Link to the full paper, link to a World Bank blog post on the findings.

    ‡ development_economics land 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.

    +++

    • As a first step in building a platform for UBI researchers, JFI is asking academics and practitioners who have worked on or are interested in working on cash transfer studies to complete a survey about the types of content and research tools they would find most helpful for their work. If this is you, please click through and complete the questionnaire. Link.
    • Stay up to date on our web publication, the Phenomenal World, with our new newsletter. You’ll get an email about every two weeks informing you about new original content covering research across the social sciences. Link to the sign up page.
    • In a new paper, Morgan Kelly suggests that the “historical persistence” literature may be riddled with statistical noise. Link.
    • In the early stages of deindustrialization, advocates of the knowledge economy expected residents of former industrial strongholds to move in response to wage incentives on the coast. But geographic migration within the US has instead been experiencing a steady decline. A new study from the Federal Reserve Bank of New York explores why. Link to the study, and link to coverage by Richard Florida.
    • At CEPR, Mark Weisbrot reviews the disastrous state of Puerto Rico’s post-hurricane recovery finances: “The recent restructuring of part of Puerto Rico’s debt―bonds backed by sales tax revenue―will not leave the economy with a sustainable debt unless the other creditors give up vastly more.” Link.
    • “I never was one of these kinds of scholars that picks a subject matter and decides I’m going to work on that ’til death. I was interested in puzzles about things that happened in the real world.” An interview with Theda Skocpol. Link.
    • “Starve all the lawyers.” A paper by Åsbjørn Melkevik on just price theories. Link.
    • “Some observers go so far as to claim that the price signals of today’s data-saturated markets, where venture capitalists, sovereign-wealth funds and deep-pocketed tech platforms subsidize services to the point where no one really knows what they cost, resemble those of the Soviet system in the years before its final breakdown. Hence the moniker ‘Gosplan 2.0.'” The calculation debate revisited, by Evgeny Morozov. Link.
    • “Finland is the only EU country where homelessness is falling. Its secret? Giving people homes as soon as they need them—unconditionally.” Link.
    • “Given the aggressive promotion of robot adoption and production via industrial policies, it seems that the Chinese government does not fear the consequences of this disruptive technology. Similarly, in our interviews with employers and employees, we do not find that they are nervous about job replacement. In light of these perhaps surprising findings, we offer a few possible explanations for why China embraces robots, from the perspectives of the government, the employers, and the workers.” Excellent new paper by Hong Cheng, Ruixue Jia, Dandan Li, and Hongbin Li. Link.
    • Representative Rashida Tlaib’s proposed EITC bill “expands on a bill from Sen. Kamala D. Harris (D-Calif.), which would also direct trillions in tax credits to low-income Americans but offers no or smaller benefits for the poorest people in the United States. By contrast, Tlaib’s plan offers the full $3,000 or $6,000 credit to those with no income—a significant break from orthodoxy among more centrist Democrats, who have traditionally argued giving federal cash to the unemployed will discourage them from finding jobs.” Link to Jeff Stein’s coverage in the Washington Post, link to People’s Policy Project praise of the proposal.
    • Naila Kabeer: why randomized controlled trials need to include human agency. Link. ht Sidhya
    • A new report co-authored by George Monbiot et al for Labour UK advocates for a radical restructuring of land ownership. Among the recommendations: “unlocking information” about land value distribution, reigniting communal ownership, and founding public development corporations. Link to the report, link to an op-ed in the Guardian.
    • “Contradictions were celebrated by Marx, Hegel and Heraclitus. These authors not only intended that contradictions actually exist, but claimed that they are the essence of everything. However, their ideas were not presented in a formal way. One wonders whether this would be possible. Fifty years ago, on the one hand, Soviet thinkers used to consider the new logic as a grave mistake of the bourgeoisie, incapable of taking into account the fundamentally ‘dialectical’ nature of reality; on the other hand, someone like Popper did not hesitate in claiming, in the name of logic, that dialectic was nothing but a misconceived enterprise, given that, from his viewpoint, one could not represent dialectics, according to logic. The devising of paraconsistent logic would end the ideological debate, showing that, to some extent, neither of the sides was entirely correct, as usually happens in this kind of debate.” Paraconsistent logic in a historical perspective, by Newton C.A. da Costa. Link.

  4. Convex Mirror

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    GREEN PLAN(K)

    Growing the Green New Deal in the US and Europe

    Jay Inslee, the governor of Washington State and Democratic presidential candidate, has made climate policy the center of his longer-than-long-shot campaign. On May 3rd, he released 8 pages of goals, and on May 16th, he released the 35-page, 28-policy “Evergreen Economy Plan,” with several more similarly lengthy reports on the way. David Roberts, an energy commentator at Vox, had a representative reaction to Inslee’s policies: “Inslee’s campaign is systematically translating the Green New Deal’s lofty goals — to decarbonize the economy sector by sector, in a way that creates high-quality jobs and protects frontline communities — into policy proposals.”

    The report includes policies on infrastructure, manufacturing, R&D, and policies for energy workers, including a “GI Bill” and 8 million new jobs over the next 10 years. But beyond its extremely detailed recommendations, a key point of interest is seeing how the GND’s idealistic goals are cashed out. The introduction emphasizes a restorative approach:

    “Inherent throughout … is the urgent need to support frontline, low-income, and Indigenous communities, and communities of color. These communities are being impacted first and worst by the accelerating damages of climate change, and have endured a legacy of air, water, toxics and climate pollution, along with a deficit of public investment and support. Through an assertive agenda of reinvestment that is guided by strong local input, Governor Inslee’s plan seizes the opportunity to build a clean energy economy that provides inclusive prosperity — upon a foundation of economic, environmental, racial and social justice.”

    Link to the report.

    • Leah Stokes, a climate and energy policy expert, contextualizes the expense on Twitter: “Spending $300 bn annually on climate is about 10% of the federal budget. Warren’s plan aggressively targets climate action by the military, which is about 20% of the federal budget. Hence, Inslee’s plan is about half the size of military spending. That’s BIG.” Link to the thread. – –
    • Noah Smith also takes up the cost question: “It’s probably less than 20 percent of what Ocasio-Cortez’s plan would cost, and only a quarter of the total would be paid by the government, so new budget deficits or taxes would be relatively modest. And because Inslee’s plan is more narrowly focused on value-generating investments like infrastructure rather than new entitlement spending, a higher percentage of the cost would be recouped down the road.” Link.
    • As the GND gains momentum in the US, some in Europe are taking similar steps. DiEM25 (a pan-European organization co-founded in 2015 by Yanis Varoufakis) and the European Spring have released a report on a Green New Deal for Europe. Link. (Their candidates fell short in last week’s elections.)
    • An article in the World Economic Forum on the Green New Deal for Europe explains some of the theoretical differences between the US and European plans. “Whereas the Americans are building on a century-old tradition of the original New Deal, we’re trying to marry that language with existing programs.” Link.
    ‡ climate energy greaan_new_deal

    New Researchers: INDUSTRIAL DELUGE

    The collective costs of development initiatives

    PhD candidate in sustainable development ALICE TIANBO ZHANG studies the distributional consequences of large scale infrastructure projects. Her job market paper examines the social costs of China’s Three Gorges Dam, which, for the purpose of development, displaced more than one million people during its construction between 1995 and 2010. Subsequent flooding imposed even greater burdens on the local economy, displacing up to 1.9 million people and prompting a 30-50% decline in employment in manufacturing and capital-intensive sectors.

    “The stakes are high for understanding the social costs of infrastructure development projects. As the World Bank and other multilateral development banks are making a major push to fund mega-dams and other large energy infrastructure projects in developing countries, accurate assessment of their social and economic impact is vital for effective policymaking. To the extent that large-scale infrastructure project are integral to economic development and dams, in particular, are relied on as a clean energy source for mitigating climate change, institutions need to provide fair and adequate compensation for communities that bear the burdens of development.”

    Link to the full paper, and to Zhang’s website.

    ‡ development_economics migration 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 post on Phenomenal World: JFI fellow Gregory Keenan surveys the history of U.S. copyright law, critiques the critics, and offers thoughts on the future of copyright in the digital age. Link.
    • In a new paper, John Lynch, Aurélie Meunier, Rhiannon Pilkington, and Stefanie Schurer use the introduction of the Australian Baby Bonus (ABB) to examine the impact of unconditional cash transfers on child health. They find that “The ABB reduces the number of potentially preventable hospitalizations and emergency department presentations for respiratory problems in the first year of life.” Link.
    • In Nature, Iyad Rahwan et al argue (and outline a program) for the study of “machine behavior.” Link.
    • “‘Self-deportation’ is a concept to explain the removal strategy of making life so unbearable for a group that its members will leave a place. This article examines the mechanics of self-deportation and tracks the policy’s development through its application to groups unwanted as members of the American polity.” K-Sue Park in Harvard Law Review. Link.
    • A compilation of papers presented by INET at the University of Trento’s annual Economics festival. Among the papers: opioids and inequality, persistent deflation, the emergence of a dual economy. Link.
    • “We have found evidence of negative links between national advertising and national wellbeing.” By Chloé Michel, Michelle Sovinsky, Eugenio Proto, Andrew Oswald at VoxEU. Link.
    • In a forthcoming issue of the Annual Review of Law and Social Science, Bruce G. Carruthers and Melike Arslan offer a theoretical overview of the relationship between law, money, and power: “We examine research on different instances of legal control over official currency, monetary innovations, standards of monetary measurement and valuation, counterfeiting, terror financing, and money laundering to show how the relationship between money and law has evolved in response to changes in international law, national sovereignty, and global markets.” Link.
    • “There is no unbroken continuity of egalitarianism in Swedish history, and any potential pre-modern relative equality cannot explain twentieth-century social democratic equality.” Eric Bengtsson upturns the Swedish Sonderweg thesis, holding that Sweden’s relatively egalitarian society is rooted not in deep early modern cultural origins, but in the success of organized, broad-based social movements in the early decades of the twentieth century. Link.
    • Ryu Susato finds Humean influence in Rousseau’s Discourses. Link.
    • “The desperate hunger for these carbon credit plans appears to have blinded many of their advocates to the mounting pile of evidence that they haven’t—and won’t—deliver the climate benefit they promise.” Lisa Song’s in-depth look at the carbon credits industry. Link.
    • “Manufacturing Revolution”: economist Alice Evans and Nathan Lane (both of whom we’ve previously shared here) in conversation on Evans’ economics podcast, covering Lane’s work on industrial policy and development in South Korea. Link.
    • “Covert operations conducted by intelligence agencies were a key component of superpower foreign policy during the Cold War. For the United States, many of these operations had the expressed goal of replacing ‘unfriendly’ regimes—often ones that had expropriated multinational corporate property—and were planned under extreme secrecy. Since corporate property was always restored after a successful regime change, these operations were potentially profitable to nationalized companies. If foreknowledge of these operations was truly secret, then pre-coup asset prices should not have reflected the expected future gains. However, this article shows that not only were U.S.-supported coups valuable to partially nationalized multinationals, but in addition, asset traders arbitraged supposedly ‘top-secret’ information concerning plans to overthrow foreign governments. The average cumulative abnormal return to a coup authorization was 9% over 4 days for a fully nationalized company, rising to more than 13% over 16 days.” A 2011 paper in the Quarterly Journal of Economics by Arindrajit Dube, Ethan Kaplan, and Suresh Naidu. Link.

  5. Interior Spring

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    CONTINGENT REFORM

    The history and theory behind the Earned Income Tax Credit

    The Earned Income Tax Credit (EITC) is the country’s largest anti-poverty program. In 2018, over 20 million filers received $63 billion in EITC refunds. Because of its bipartisan popularity and its secure position in the tax code, with no distinct administrative unit managing its payouts, it is also at the center of several substantial anti-poverty programs recently floated in the House and Senate. These proposals variously expand and modify the EITC, often in concert with the Child Tax Credit, in order to offer a more robust benefit.

    A look into the history of the EITC reveals that, at its formation, the credit was an unlikely candidate for a major anti-poverty vehicle. In a CONGRESSIONAL RESEARCH SERVICE paper, MARGOT KRANDLE HOLLICK lays out its legislative history, showing that its 1972 introduction by Senator Russell Long was an intervention against proposed guaranteed income programs, and that “the bill had originally included a provision that would have required states to reduce cash welfare by an amount equal to the aggregate EITC benefits received by their residents.” From the paper:

    “The origins of the EITC can be found in the debate in the late 1960s and 1970s over how to reform welfare—known at the time as Aid to Families with Dependent Children (AFDC). Some policymakers were interested in alternatives to cash welfare for the poor. Some welfare reform proposals relied on the ‘negative income tax’ (NIT) concept. The NIT proposals would have provided a guaranteed income to families who had no earnings (the ‘income guarantee’ that was part of these proposals). For families with earnings, the NIT would have been gradually reduced as earnings increased. Influenced by the idea of a NIT, President Nixon proposed in 1971 the ‘family assistance plan’ (FAP) that ‘would have helped working-poor families with children by means of a federal minimum cash guarantee.’

    Senator Russell Long, then chairman of the Senate Finance Committee, did not support FAP because it provided ‘its largest benefits to those without earnings’ and would, in his opinion, discourage people from working. Instead, Senator Long proposed a ‘work bonus’ plan that would supplement the wages of poor workers. Senator Long stated that his proposed ‘work bonus plan’ was ‘a dignified way’ to help poor Americans ‘whereby the more he [or she] works the more he [or she] gets.'”

    Link to that paper.

    • A 1999 Brookings paper by historian Dennis Ventry also examines the unique political history of the EITC, writing that its emergence appealed to legislators as “both an anti-poverty and an anti-welfare program.” Link.
    • Brian Steensland’s excellent book The Failed Welfare Revolution: America’s Struggle Over Guaranteed Income Policy surveys this history in depth. Link. And link to a 2006 paper that preceded its publication, on cultures of “worth” and anti-poverty programs.
    • A 2015 Duke Law Review Note titled “Earned Income Tax Credit: Path Dependence and the Blessing of Undertheorization,” examines “the credit’s path-dependent past, which has resulted in a present-day EITC that manifests a diverse, uncoordinated assortment of policy purposes.” Link.
    • The above-linked recent proposals have focused on expanding the program’s breadth, but retain in some form the “phase-in” structure originally proposed by Long, which excludes non-waged workers from claiming the return. Link to a (previously shared) critique of this structure—and work-tied benefits more broadly—by Matt Bruenig. Link to an also previously shared paper by JFI Fellow Max Kasy, which proposes expanding the EITC into a universal benefit.
    • Our colleagues at the Economic Security Project have developed a proposed “Cost of Living Refund,” which tackles several important issues with the EITC. It includes proposals for monthly disbursements and expanding eligibility to un-waged care work. Link to the project’s website, which hosts research and model legislation.
    ‡ tax_credit welfare policy

    New Researchers: CENTRAL CIRCULATION

    Central banking and local economics

    In her job market paper, co-authored with Chenzi Xu, Harvard Economics PhD candidate He Yang considers how the development of a central banking system shaped local economies in the United States. Prior to the National Banking Act of 1864, privately issued bank notes were the predominant currency in circulation. The act mandated that newly formed national banks guarantee bank note liabilities with federal bonds at a rate proportional to local town populations. Xu and Yang exploit this “natural experiment” to observe changes in production and growth:

    From the paper:

    “The initial significant growth in the manufacturing sector as well as increased trade and innovation could contribute to the persistently higher level of manufacturing production for at least two decades. In sum, our results suggest that the newly entered national banks facilitated local economic development by providing safe liabilities with stable value across places and over time.”

    Link to the paper.

    ‡ development_economics banks 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 new article by Teresa Molina Millán, Tania Barham, Karen Macours, John A Maluccio, and Marco Stampini reviews all existing evidence on the consequences of long term conditional cash transfers: “Most studies find positive long-term effects on schooling, but fewer find positive impacts on cognitive skills, learning, or socio-emotional skills. Impacts on employment and earnings are mixed, possibly because former beneficiaries were often still too young. A number of studies find estimates that are not statistically different from zero, but for which it is often not possible to be confident that this is due to an actual lack of impact rather than to the methodological challenges facing all long-term evaluations.” Link. ht Sidhya
    • Research by Łukasz Kidziński Kinga and Kita-Wojciechowska uses data collected from Google Street View to predict a person’s likelihood of getting into a car accident. Insurance companies have already begun to use this data to personalize the cost of premiums. Link.
    • From the University of Leeds, a policy brief on effective models for building affordable, low-carbon, climate resilient housing. The brief gleans lessons from the government of Kerala, whose community-based committees oversaw the construction of 23,577 houses, with 100% occupancy rate, at the lowest possible per unit cost: “Involving urban residents in planning, designing and building has ensured that the houses are culturally appropriate; easy to build; inexpensive to live in; and located close to jobs, services and amenities.” Link. ht Jack B
    • “Declining Job Quality in the United States: Explanations and Evidence” by David R. Howell and Arne L. Kalleberg at the Washington Center for Equitable Growth. Link.
    • Two weeks ago, the UK Labour party announced it would launch a UBI pilot if elected. A new report by Guy Standing addresses the primary arguments against basic income, confronts concerns over the value of pilot findings, and presents a series of recommendations for pilot design in the UK. Link.
    • “For decades, roughly 55–65% of people who were starting new work came from outside of the labor force; today, that number is approaching 75%. That’s telling us three out of four people who are just starting to work again weren’t counted as unemployed before.” Mark Paul squares stagnating real wages with low unemployment. Link.
    • Leonardo Baccini, Giammario Impullitti, and Edmund J. Malesky consider the effects of globalization on economies driven by state-owned enterprises (SOEs) like Vietnam and China. They find that unlike private companies, SOEs are unlikely to experience productivity gains as a result of market integration through institutions like the WTO. Link to their paper, and link to an article summarizing their results.
    • In a new NBER working paper, Omar Al-Ubaydli, John A. List, and Dana Suskind reflect on the “blind faith” of associating experimental findings with fully scaled policies: “Our work represents a challenge to empiricists to estimate the nature and extent of how important the various threats to scalability are in practice, and to implement those in their original research.” Link. (Ungated here.) ht Sidhya
    • “American jurisprudence considers price predation a largely irrational, and therefore self-limiting, business strategy which is unlikely to lead to monopolization of an industry. This paper argues that the recent rise of the negative cash flow firm upends traditional assumptions.” A new paper by Shaoul Sussman examines the consequences of long-term below average variable cost prices used by companies like Amazon. Link.
    • “By analyzing a rich dataset, including historical railway maps, information on passenger and freight traffic, census data and archival information on social movement membership in Sweden, I demonstrate the impact of railway access on the spread and growth of activist organizations. Well-connected towns and cities were more likely to host at least one social movement organization, and to see more rapid growth in membership numbers. The positive impact of rail is only as a result of increased passenger flows to a town or city—it was the mobility of individuals that spread new ideas, not an acceleration of economic activity more broadly.” From Eric Melander. Link.

  6. Flower Meadow in the North

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    TANGLED PATHS

    First steps to mapping the non-Title-IV education landscape

    Title IV of the Higher Education Act of 1965 permits certain postsecondary institutions to be eligible for federal financial aid funds. A wide variety of programs are Title IV eligible: public, private, for-profit, vocational. Yet there are also a vast number of non-Title-IV (NT4) programs, offering credentials, certifications, and various forms of training—and neither the Department of Education, nor any other body, collects unified data on all these programs. How many students attend them? What subjects are they learning? What are their outcomes?

    There’s only been one recent paper that’s made a serious attempt to understand the scale of NT4 programs. In a 2012 working paper, Stephanie Cellini and Claudia Goldin calculated that NT4 institutions educate 27% of students enrolled in for-profit institutions each year (670,000 enrollments).

    A 2017 paper by Jessie Brown and Martin Kurzweil for the American Academy of Arts and Sciences attempts to map the alternative postsecondary landscape, including “certificate programs; work-based training; skills-based short courses; MOOCs; and competency-based education programs.” That paper finds that these programs are growing:

    “While each of these alternatives has roots that reach back decades if not longer, for a number of reasons, alternatives have increased in size, diversity, and importance in recent years, and are likely to continue to grow. Though the length and cost of alternative programs vary, most last for less than two years and cost significantly less than a four-year degree, the cost of which continues to rise rapidly… A characteristic feature of all the programs discussed is their flexibility to align directly with specific employer needs and competencies in skill-based fields. Despite these reasons for their appeal and likely growth, evidence of the efficacy and value of these alternatives—for students and taxpayers—is still thin.”

    As the debate over the skills gap continues and the cost of college soars, the obscurity in which these programs operate becomes increasingly untenable. Link to that paper.

    • Brown and Kurzweil work includes three recommendations for policymakers, including recommendations to create a robust data system and quality assurance scheme. George Washington University has just launched the Non-Degree Credential Network project to begin building out research and data. Link.
    • Andrew Reamer’s 2018 list of credential info aggregators brings into relief the diversity of the programs as well as the chaotic state of the information about them. Link.
    • In a March letter, we featured work by Xu and Trimble on a closely related topic: what are the outcomes of students who participate in certificate programs? Link to that letter, link to their paper.
    • A 2016 paper by Santa Falcone examines US certificate programs at Title IV schools from 1980-2013, and includes some relevant education history: “This growth period [1870-1910] also brought into existence private, external, independent university ratings agencies. These agencies successfully used coercion and incentives on higher education institutions to develop more standardized admissions, instruction, and accreditation criteria to counter the lack of any existing academic standards.” Link.
    • A 2013 paper by Rosenbaum and Rosenbaum covers occupational colleges and certificate programs (with, again, a focus on Title IV institutions). Link.
    ‡ higher_education

    New Researchers: ALLOCATION FAILURE

    New evidence on the fallout of welfare block grants

    In a forthcoming paper, Columbia economics postdoc ZACHARY PAROLIN produces new evidence of the deleterious effects of 1996 welfare reform—specifically, the decision to turn the federally administered Aid to Families With Dependent Children (AFDC) to the state-administered Temporary Assistance to Needy Families (TANF) program. Parolin conducts a detailed audit of the cross-state differences in spending prioritization that emerged through TANF, and elucidates the relationship between a state’s racial composition and its allocation of resources. He finds that states with higher black populations, in keeping with racist anti-welfare rhetoric, focus more of their spending on “family formation” programs, rather than cash assistance, and that this has contributed to the black-white child poverty gap.

    From the paper:

    “Since the program’s implementation, states have been granted broad discretion in deciding how to allocate TANF resources, so long as the programs or policies funded can be deemed to serve one of four purposes: (1) the provision of cash assistance, (2) the promotion of “job preparation, work, and marriage,” (3) the prevention of “out-of-wedlock pregnancies,” and (4) the “formation and maintenance of two-parent families.” Research on state heterogeneity in TANF has narrowed in almost exclusively on the first of these four purposes, highlighting regional differences in TANF cash benefit levels or barriers to the receipt of cash assistance. This strict focus on cash assistance, however, misses more than three-fourths of the program’s expenditures: in 2014, the average state allocated only 22.6 percent of its budget toward the provision of cash assistance.

    Black children in the United States are more than twice as likely as white children to live in poverty. While past research has primarily attributed this phenomenon to the family structure of black children, this paper investigates how state-level heterogeneity in social assistance programs contributes to the black-white child poverty gap. I find that racial inequities in states’ administration of the Temporary Assistance for Needy Families (TANF) program contributed to the impoverishment of approximately 256,000 black children per year from 2012-2014. State-year panel data demonstrates that states with larger percentages of black residents are less likely to prioritize the ‘provision of cash assistance’ but more likely to allocate funds toward the ‘discouragement of lone motherhood.’ Neutralizing inequities in states’ TANF spending priorities would reduce the black-white child poverty gap by up to 15 percent—comparable to the reduction effect of moving all children in single-mother households to two-parent households.”

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

    ‡ racial_wealth_gap welfare 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 Phenomenal World: former JFI fellow Hana Beach interviews basic income scholar Almaz Zelleke on the forgotten histories of the welfare reform movement’s advocacy for unconditional basic income, and the politics of UBI advocacy today. Link.
    • A growing body of evidence indicates that current measures of potential output, used to guide fiscal and monetary policy, are unfounded. In a new report, Claudia Fontanari, Antonella Palumbo, and Chiara Salvatori propose a new measure rooted in the demand-led growth perspective. Link.
    • As part of an ongoing series on China’s Belt and Road Initiative, a Nature article on the funding of research centers in South America: “Beijing’s science silk road.” Link.
    • A concise list by law professor John Pfaff in the Washington Post dispels some prominent myths about US prisons in an effort to refocus attention on the areas that matter most for reform. Link.
    • Last Saturday, JFI’s Director of Research Sidhya Balakrishnan testified in favor of an opt-in structure for the Alaska Permanent Fund before the Alaska State Legislature. Her proposed restructuring would allow recipients to determine how frequently their dividends are disbursed depending on their financial constraints: “On an annual disbursement schedule, the ideal scenario is one in which recipients smooth their consumption in anticipation of the dividend at the end of the year. Poor households which are constrained in terms of savings and access to credit are unable to do this. The option of more frequent disbursements would allow these households to smooth their consumption and would thus maximize their benefit.” Link to the full testimony.
    • Public sector salary disclosure laws in Canada had three effect on faculty salaries: “First, the disclosure laws reduced salaries on average. Second, the laws reduced the gender pay gap between men and women. Third, the closure of the gender gap is primarily in universities where faculty are unionized.” By Michael Baker, Yosh Halberstam, Kory Kroft, Alexandre Mas, and Derek Messacar. Link.
    • In the forthcoming issue of NYRB, Adam Tooze weighs in on the historical moment which produced the present global crisis of democracy. Link.
    • “Granting employees an equity ‘stake and a say’ in the companies that they work for means that when corporate executives decide on the level of dividends to be paid to shareholders, the workers who created the profits will not be left in the dust.” Lenore Palladino from the Roosevelt Institute looks at inclusive ownership funds in the UK and how they could be applied to the US. Link.
    • A fantasy medieval city generator, a fantasy vulgar language generator, and a fantasy culture generator. Link, link, link. ht Michael ht Kapu and ht Francis respectively.
    • Daniel Ernst on the history of the FCC, with insights into the creation and maintenance of administrative apparatuses throughout the New Deal and beyond. Link.
    • Data for Progress presents a comprehensive and universal housing proposal. Equitable zoning practices, the construction of millions of public homes, renter relief, and closing tax loopholes for landlords are all on the agenda. Link.
    • How gender bias persists through blind review in grant application processes. By Julian Kolev, Yuly Fuentes-Medel, Fiona Murray. Link to the paper, link to a blog post. ht Sidhya.
    • Charting the growth of zero hour contracts. Link.
    • “Using a novel municipal-level dataset on revolutionary insurgency, the study documents that municipalities experiencing severe drought just prior to the Mexican Revolution were substantially more likely to have insurgent activity than municipalities where drought was less severe. Many insurgents demanded land reform, and following the Revolution, Mexico redistributed over half of its surface area in the form of ejidos: farms comprised of individual and communal plots that were granted to a group of petitioners. Rights to ejido plots were non-transferable, renting plots was prohibited, and many decisions about the use of ejido lands had to be countersigned by politicians. Instrumental variables estimates show that municipalities with revolutionary insurgency had 22 percentage points more of their surface area redistributed as ejidos. Today, insurgent municipalities are 20 percentage points more agricultural and 6 percentage points less industrial.” By Melissa Dell. Link.

  7. Reality Slays Art

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    PREMATURE PROGRESS

    New patterns in deindustrialization

    As economies across Europe and in the United States have become more knowledge-based, urban-centered, and tech-driven, people in manufacturing reliant regions have seen declining life expectancies, stagnating real incomes, and minimal job growth.

    In recent years, social scientists have been grappling with the interconnected political, economic, and social effects of deindustrialization. But this literature is almost entirely confined to Europe and the U.S. In a new paper, DAVID KUNST broadens the scope of this research using a novel dataset on manufacturing employment by occupation in developing countries. He studies the labor market effects of ‘premature deindustrialization,’ finding a general decline in the hiring capacity of manufacturing sectors and a genuine risk from automation in emerging markets. The study comes to four conclusions:

    “First, it is mostly unskilled jobs that have disappeared, and also the wage premium of workers with little formal education in manufacturing relative to other industries has declined. Second, the disappearing jobs have been among the most formal both relative to other industries, and to the manufacturing average. Third, premature deindustrialization has been driven by occupations which are intensive in tasks that are vulnerable to an increasing adoption of ICT. Fourth, the phenomenon pertains most clearly to middle income countries, as low income countries have been spared from premature job losses.

    250 years after the beginning of the Industrial Revolution, it appears that manufacturing is losing its ability to employ unskilled workers more productively than other industries. Developing countries, abundant in unskilled labor, lose their comparative advantage in producing an increasing range of manufactured goods. Hence, future growth in developing countries may have to rely more on improvements in ‘fundamentals’ such as education and governance, and policy makers need to focus on a broader range of sectoral policies than in the past.”

    Link to the full paper.

    • The notion of ‘premature deindustrialization’ was developed by Dani Rodrik in 2015. In that paper, Rodrik argued that “countries are running out of industrialization opportunities sooner and at much lower levels of income compared to the experience of early industrializers” and suggested that “early deindustrialization could well remove the main channel through which rapid growth has taken place in the past.” Link.
    • In a 2017 report, Carol Graham, Sergio Pinto, and John Juneau II map the “geography of desperation” in the United States: “In general, minorities scored worse on all of the variables in states where there are proportionately fewer minorities, such as Washington State and Kansas. These include Maine, Wisconsin, North Dakota, and Florida. Poor whites, meanwhile, tended to score lower across the board in the Appalachian states, and then poorly in many of the Midwestern and Western heartland states.” Link. Two more reports from Brookings offer suggestions for place-based policies in the U.S. to counter these effects. Link, link.
    • David Clingingsmith and Jeffrey G. Williamson study the causes behind Indian deindustrialization from 1750-1860. Unlike literature which attributes the decline to growing competition in textile production from Britain, the authors find that the dissolution of Mughal hegemony and deteriorating climate conditions better account for the shift. Link.
    ‡ development_economics labor_market

    New Researchers: INFLUX NULL

    Immigration and labor market effects in the early-20c Northeast

    In a joint paper, UC Davis PhD candidates SIOBHAN O’KEEFE and SARAH QUINCY examine how the proliferation of Russian Jewish agricultural colonies between 1880 and 1910 influenced the job prospects of local residents in southern New Jersey. Their results suggest no negative impact produced by the influx of migrants:

    From the paper:

    “Jewish charities funneled refugees and funds into clusters of farms across southern New Jersey chosen for the affordability of land and relative proximity to New York City and Philadelphia. Before the establishment of the first agricultural colony at Alliance in 1882, no Russians lived in the area, allowing us to isolate the effect of the immigrant inflow. We compare the 1910 labor market outcomes of native-born men living next to the colonies in 1880 to those living in the rest of southern New Jersey. The influx of Russian immigrants was equivalent to approximately one percent of the total population in areas next to agricultural colonies.

    We find that men living near a colony had not only a decreased probability of moving away by 1910, but also a higher probability of upgrading to higher-paying jobs complementary to refugee-occupied niches. Men who lived near agricultural colonies had a 4.7 percent higher income than men who did not live near a colony. In contrast to the positive results for the nonfarm sector, we find there to be no effect of living near a colony on farmers, despite the influx of new farmers.”

    Link to the paper, link to O’Keefe’s website, and link to Quincy’s website.

    ‡ economic_history migration 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.

    +++

    • Magnolia Mother’s Trust—an exciting guaranteed income program aimed at low-income single Black mothers in Mississippi—was covered extensively in the New York Times. Link. At the end of the month, Aisha Nyandoro, the project’s executive director, and Rachel Black, from New America, will be giving a research session at JFI. Link to a related report co-authored by Nyandro and Black. (And link to a list of our upcoming research sessions.)
    • Joint research by Finland’s LUT University and the Energy Watch Group “rigorously opens up a new perspective towards a shift to 100% renewable energy within the next two to three decades.” Link.
    • “The earnings premium associated with a good occupational match is larger in countries where the credential has a stronger link to the labor market, but the penalty for a mismatch is also greater in such countries. Moreover, strong linkage reduces unemployment risk.” A new paper by Thijs Bol et al examines education and labor market matching across industrialized countries. Link.
    • A forum on the politics of nature in the Boston Review. Among the contributors, Ugo Mattei argues for an ecological legal infrastructure, Roy Scranton holds that “The distinction between human and nature has always been a self-serving political lie,” and Anna Tsing defends the importance of cross-species interdependence. Link to the forum’s introductory piece by Jedediah Purdy.
    • Via Brad DeLong, an extremely useful cheatsheet on common probability distributions. Link.
    • Examining Brazil’s Family Grant conditional cash transfer scheme (the largest in the world), three new papers by Fernanda Brollo, Katja Karufmann and Eliana La Ferrara show the political effects of benefits programs that sanction recipients. Link to coverage in the Economist. ht Sidhya
    • In the New York Times, Margot Kaminski and Andrew Selbst comment on a new Senate bill that would mandate companies to audit their algorithmic decision systems for discrimination. Link.
    • An exploratory tool offering data on various wellbeing metrics—healthcare, early learning access, family stability—for babies and toddlers throughout the United States. Link.
    • Belleville, Ontario has piloted an on-demand public transit service, allowing riders to order buses to take them to and from any bus stop, using a unique routing system that solves for a globally optimal solution for all vehicles and trips. Some results on the first month of service: “Ridership has increased by 300%; Per vehicle mileage has decreased by 30%; The number of bus stops covered by the service is 70% greater than the previous bus service, using the same number of vehicles and service hours.” Link. ht Francis
    • Bentley B. Allan charts the neoclassical orientation of World Bank imperatives throughout Keynesian, neoliberal, and post-Washington Consensus “paradigmatic shifts.” Link.
    • At 3P, Matt Bruenig dives more deeply into his arguments against trapezoid benefits—income supplements that phase in based on a recipient’s pre-transfer earnings. After mentioning that these programs exclude the poorest based on political calculations (work incentives are popular among legislators), Bruenig explains new research disproving the argument that phase-ins increase the labor supply. Link to the post, link to the research by Henrik Kleven.
    • From Janine Aron and John Muellbauer at VoxEu, the economics of mobile money. Link.
    • “Colonial and postcolonial port cities in the Atlantic and Indian Ocean regions functioned as crucial hubs in the commodity flows that accompanied the emergence and expansion of global capitalism. They did so by bringing together laboring populations of many different backgrounds and statuses—legally free or semi-free wage laborers, soldiers, sailors, and the self-employed, indentured servants, convicts, and slaves. The presence of these ‘motley crews’ makes them an ideal vantage point from which to investigate the consequences of the ‘simultaneity’ of different labor relations for questions such as the organization of the work process under developing capitalism, the emergence of new forms of social control, the impact of forced and free migration on class formation, and the role of social diversity in shaping different forms of group and class solidarity.” New work from Pepijn Brandon et al. Link.

  8. Hidden Structures

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    RESERVE GUARDS

    Labor and discipline in the economy

    As inequality has grown in salience as a political issue and object of research over the past decade, increasing numbers of social scientists are mapping the distribution of power and access throughout society. This new attention joins longstanding work that maintains, among other things, that free economic relations are accompanied by unequal property relations, involuntary employment, and an institutional framework to assure against incomplete contracts.

    In a 2004 paper, Samuel Bowles and Arjun Jayadev argue that these dynamics are actively reproduced by guard labor: a section of the labor force whose primary function is to discipline other workers. Bowles and Jayadev find that all governments allocate a significant portion of their labor force towards these ends. Moreover, they find a strong correlation between the proportion of the labor force devoted to guard labor and domestic levels of economic inequality:

    “The differences in the extent of guard labor among countries are substantial, ranging from a tenth of the labor force in Switzerland to over a fifth in the U.K and the U.S. Broadly, three groups are evident. Social Democratic countries which display low levels of guard labor, English-Speaking countries which display high levels of guard labor (with substantial supervision), and Southern European economies which exhibit unusually high unemployment rates and thus, large amounts of guard labor.

    The composition of guard labor differs substantially among the nations, especially in the proportions of the two largest components: supervision and unemployment. The top four in guard labor—Spain, the U.K., the U.S. and Greece—for example, devote about a fifth of their labor force to supervision and unemployment combined. But the U.S. is distinctive, with less than half the amount of unemployment as either Spain or Greece and 50 percent more supervisory labor. A comparison between the English speaking countries suggests a similar story. The U.S displays between 90 and 50 percent more supervisory labor than Canada, Australia and New Zealand, but about 50 percent less unemployment than these countries.”

    Link to the paper, link to a 2014 Times op-ed by Bowles and Jayadev.

    • Drawing a comparison between unregulated American labor markets in the Gilded Age and those of the present, Suresh Naidu and Noam Yuchtman find that “the unregulated labour market generated militant and coercive labour movements and employer organizations, and led to increased allocation of resources toward the domestic policing and military capacities of the US government.” Link.
    • “Between 2007 and 2017, the U.S. added more than twice as many guards as teachers,” mapped by Richard Florida. Link.
    • From the article’s footnotes, a debate over the relationship between military capacity and economic development: In his 2000 book, Kenneth Pommeranz argued that England’s military capabilities explain why the industrial revolution took place there rather than in other rapidly growing economies like those of the Yangzi Delta; by contrast, Robert Brenner and Christopher Isett’s 2002 paper holds that greater reliance on markets compelled English elites to “allocate their resources so as to maximize their rate of return.” Link to the first, link to the second.
    ‡ labor economics labor_market_power

    New Researchers: LADEN FEELING

    On the use of “well-being” in policymaking and social science research

    In a forthcoming paper in Philosophical Quarterly, GIL HERSCH, a postdoc at Virginia Tech’s Department of Philosophy, examines definitions of well-being in the policymaking context. Exploring the uneasy balance between, on the one hand, a wish to leave well-being without a clear definition, and, on the other, define and measure policies by their effect on well-being, Hersch attempts to produce an intermediary account of the category.

    From the paper:

    “When policymakers take it as one of their goals to implement policies that will improve people’s lives, they might want to base their policy decisions on one of the many substantive theories of well-being available. But since reasonable people can disagree on what constitutes well-being, this would amount to policy-makers imposing their own views of the good life on others. Generating an account that can sidestep the disagreement among substantive theories of well-being as to what really constitutes well-being, while at the same time still providing useful guidance regarding well-being policy would be a significant achievement.

    I argue that any attempt to provide meaningful well-being policy advice while remaining agnostic regarding the correct substantive theory of well-being by avoiding any appeal to such theories will ultimately fail. Ultimately, there are no theory-free lunches in well-being policy. “

    Link to the paper, and link to Gil Hersch’s website.

    ‡ philosophy metaresearch metrics 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 Phenomenal World: JFI Fellow Kapu Rao interviews war finance scholar Rosella Zielinski. “In the absence of this strong connection to the idea of sacrifice, many argue, one of the few connections citizens feel to a war effort is financial. I think this ultimately has to do with inequality. And this is the bigger problem: how these changes affect the redistribution of wealth in the United States.” Link.
    • “We investigate whether these ‘deaths of despair’ trends have been mitigated by two key policies aimed at raising incomes for low wage workers: the minimum wage and the earned income tax credit (EITC). Our estimates suggest that increasing both the minimum wage and the EITC by 10 percent would likely prevent a combined total of around 1230 suicides each year.” By William H. Dow, Anna Godøy, Christopher A. Lowenstein, and Michael Reich. Link. h/t Sidhya
    • Will autonomous vehicles create efficiency? A new report from Ashley Nunes and Kristen Hernandez at MIT says no. “Capacity utilization rates would need to improve by nearly 100% and margins lowered by 37% for autonomous vehicles to achieve cost parity with their conventionally driven counterparts.” Link to the paper, link to coverage in FT Alphaville.
    • “The US government is the largest purchaser of consumer goods in the world. City and State agencies spend close to $3.25 trillion annually, making local government the second largest US industry behind manufacturing.” Brett Bachman at Vox on Amazon’s moves into the US procurement market. Link.
    • In a new study, Donald Grimes, Penelope Prime, and Mary Beth Walker find that structural factors like education, labor market density, and unionization rates do not impact the wages of low-earning workers. However, a higher minimum wage does. Link.
    • Jason Hickel and Giorgos Kallis with an edifying paper on green growth: “We ask: how do international organisations define green growth? Does the theory of green growth (and specifically, the assumption that absolute decoupling of GDP growth from material throughput and carbon emissions can be accomplished at a sufficiently rapid rate) withstand scrutiny in light of existing data and model-based projections? And if not, what are the implications for policy?” Link.
    • An open letter in Science with over twenty signatories declares support for the ongoing youth climate strikes and marches throughout Europe and the US: “Their concerns are justified and supported by the best available science. The current measures for protecting the climate and biosphere are deeply inadequate.” Link.
    • A judge in California has implemented an algorithm called Clear My Record to identify and expunge cannabis-related criminal convictions. Link.
    • “Like classical Rome, America’s empire today depends less on pomp than on plumbing. Instead of roads, aqueducts and seaports, it relies on pipelines conveying financial flows and torrents of data, as well as vast distributed supply chains. America’s domination of obscure, seeming technical structures is generating its own forms of hubristic folly among imperial administrators, who have begun to think that there is nothing they cannot do with it.” Henry Farrell and Abraham Newman on the history and future of America’s global financial infrastructure. Link.
    • Christina Romer and David Romer on fiscal space in the aftermath of financial crises. Link.
    • At CGDev, David Evans with a post titled “Beyond Regressions.” Link.
    • “Standardization must be understood as a heterogeneous practice capable of producing very different outcomes depending on the details of the standard and the organizational infrastructure surrounding its use. We compare selection devices—simple quantified tools for making allocation decisions—in undergraduate admissions and child welfare to highlight the complex relationships between race and standardization.” By Daniel Hirschman and Emily Adlin Bosk. Link. h/t Beth Popp Berman
    • Daron Acemoglu surveys the automation landscape and asks: “Where Do Good Jobs Come From?” Link.
    • “Between 1000 and 1900, world population grew from under 300 million to 1.6 billion. The increase accelerated dramatically over time and occurred almost entirely towards the end of the period. This study uses country-level historical data on population and urbanization to empirically investigate the extent to which this historical increase is due to the introduction of potatoes from the New World to the Old World, by which we mean the entire Eastern Hemisphere.” By Nathan Nunn and Nancy Qian. Link.

  9. Green Power

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    MODELED WISDOM

    Modeling policy levers for housing affordability in urban centers

    In nearly every major urban center, housing affordability is in crisis. Since the 1960s, median home value has risen by 112% across the country, while median owner incomes rose just 50%. For renters, especially since 2008, the problem is increasingly acute:nearly half of renters (over 20 million people) pay over 30% of their income on rent.

    In New York City, nearly two-thirds of all residents are renters (half of whom are rent-burdened), and the politics of housing policy remain correspondingly fraught. In a recent paper, researchers JACK FAVILUKIS, PIERRE MABILLE, and STIJN VAN NIEUWERBURGH at Columbia Business School develop a dynamic stochastic spatial equilibrium model to quantify the welfare implications of various policy tools. Calibrating the model to New York City, the authors examine the interactions between funding and affordability policies to chart a possible path forward. From the paper:

    “Policy makers are under increasing pressure to improve affordability. They employ four broad categories of policy tools: rent control (RC), zoning policies, housing vouchers, and tax credits for developers. Each policy affects the quantity and price of owned and rented housing and its spatial distribution. It affects incentives to work, wages, commuting patterns, and ultimately output. Each policy affects wealth inequality in the city and in each of its neighborhoods.

    While there is much work, both empirical and theoretical, on housing affordability, what is missing is a general equilibrium model that quantifies the impact of such policies on prices and quantities, on the spatial distribution of households, on income inequality within and across neighborhoods, and ultimately on individual and city-wide welfare. Consistent with conventional wisdom, increasing the housing stock in the urban core by relaxing zoning regulations is welfare improving. Contrary to conventional wisdom, increasing the generosity of the rent control or housing voucher systems is welfare increasing.”

    Link to the paper, and link to a press release from Columbia Business School.

    • Data for Progress analyzed housing proposals from the leading 2020 candidates. Link to the reports, and link to an updated version of Senator Warren’s proposal.
    • A report from last spring by authors Peter Gowan and Ryan Cooper advocates for an across-the-board expansion of social housing in the United States. Link.
    • Tangentially related, a JFI letter from last year highlighted thinking and proposals around the implementation of a land value tax. Link.
    ‡ housing inequality policy

    New Researchers: WARM GLOW

    A paper on solar panels: their costs, quality, and consumers

    In a wide-ranging job market paper, JIN CHEN scrutinizes subsidies for residential solar panels in California, finding that “over half of the subsidies fail to reduce prices to consumers,” and that there’s a pattern to which solar suppliers win out: “Large suppliers capture almost all the subsidy benefits whereas small and local suppliers concede the majority of the benefits to customers.” Chen goes on to note that solar panel suppliers target two different kinds of consumers, the environmentally-motivated group and the economically-motivated group. The solar suppliers make separate appeals:

    “The suppliers that focus mainly on the more environmentally oriented consumers tend to spend large sums of money on advertising. These advertisements focus on highlighting the climate benefits of installing a rooftop solar system. The suppliers that focus on the less environmentally oriented consumers tend to spend very little on advertising, primarily on the design of their websites. The advertisements on their websites are mainly about the economic benefits of a rooftop solar system. These two strategies have different implications regarding the extent to which subsides reduce the prices to consumers and increase the subsequent sales volume.”

    In the end, “environmentally focused consumers purchase from the top solar sellers whose solar systems are of lower quality.” Chen is set to complete her PhD in economics at Stanford in June. View the paper here and view her site here.

    ‡ climate green_technology

    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 partnered with a Harvard Kennedy School capstone project on algorithmic decision-making systems. View the final project, “Automating NYC,” a general-interest, interactive overview of concerns about algorithms in government, here.
    • A new paper from the People’s Policy Project covers climate innovation policy, calling for new government funding for research and development—and, in a classic 3P suggestion, new publicly-owned venture capital funds. Link.
    • The syllabus and final exam for a 1970 undergraduate econ course taught by Thomas Schelling titled “Conflict, Coalition, and Strategy.” From the exam questions: “Assuming that the hypothesis which Mill discusses is true (that nobleness in itself detracts from individual happiness), under what conditions would you expect individuals to choose to develop noble characters?” Link.
    • From Augustus Odena at Distill: Seven open (technical) questions on generative adversarial networks. Link.
    • Nobel Prize winning economist Lars Peter Hansen on evidence-based policy, or the lack thereof:”Prudent and smart decisions don’t require full knowledge. They require that you assess the uncertainty and figure out its potential consequences. The uncertainty doesn’t mean that you simply cross your arms, close your eyes, and do nothing while you wait for complete certainty. In economics, you will be waiting a long time.” Link.
    • Peter Sloman provides a comprehensive and fascinating history of universal basic income in the UK. The article identifies five waves of enthusiasm for basic income in Britain and finds that “interest in the proposal has been greatest at times of pessimism about the future of the labor market.” Link.
    • “When and where can climate policy succeed?” An interview on carbon pricing, tax credits, standards, and more with Barry Rabe and Leah Stokes by Matt Grossmann of Niskanen. Link.
    • At VoxEU, Thomas Blanchet, Lucas Chancel, and Amory Gethin compile all existing sources on income inequality to document its 40 year rise in Europe. Link.
    • Do private prisons affect criminal sentencing? Yes. Christian Dippel and Michael Poyker find that “the opening of a private prison increases the length of sentences relative to what the crime’s and defendant’s characteristics predict.” Link. See also: Poyker’s findings on the economic consequences of the U.S. convict labor system. Link.
    • From Jeffrey Sachs and Mark Weisbrot at CEPR, a new report on US sanctions on Venezuela: “It finds that most of the impact of these sanctions has not been on the government but on the civilian population. The sanctions reduced the public’s caloric intake, increased disease and mortality (for both adults and infants), and displaced millions of Venezuelans who fled the country as a result of the worsening economic depression and hyperinflation.” Link.
    • “Notably, the one section of medieval society that embraced poor hygiene was the clergy. For the medieval religious, parasites (both those that afflicted the living and those that consumed the dead) were a popular focus for contemplation, since they served as an important reminder of the frailties of the flesh. Medieval holy men and women who spent their lives itching and scratching, parasites served as a form of asceticism—a way of disciplining their bodies, like fasting or flagellation, and thus proving the depth of their faith. In the later middle ages, clerical identity rested heavily on the idea that the clergy were different from the laity. This difference was most obviously reflected in the papal prohibitions on clerical marriage and clerical violence, and also in the wearing of distinctive vestments. But perhaps the clergy, and especially the monastic orders, were also set aside by their attitude to parasites. Most medieval people, if infected, would treat their parasites, and expect those treatments to work. Whereas the clergy, in this as in so much else, were different: they embraced what everyone else tried their best to avoid, or else cure.” An essay by Katherine Harvey. Link.

  10. Gesture Dance

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    EXPLICIT SPHERE

    Wage boards, climate targets, and employment security

    Just as universal basic income has its corollaries in more moderate policies like Earned Income Tax Credits (EITC) and Child Tax Credit (CTC) reform, a federal jobs guarantee (estimated by some measures to total nearly $543 billion in the first year) has organizational corollaries in collective bargaining institutions. Among them, wage boards have received renewed attention both by researchers and politicians in the United States. Distinct from trade unions, wage boards serve to centralize bargaining at the firm level through proportionate representation by employers, employees, and policymakers. Within the German context, they have been found to increase productivity and reduce social inequality. Unlike other policies aimed at mitigating income and wealth disparities, wage boards are virtually costless to implement.

    Existing literature on codetermination has focused on its economic impacts. In a recent article, ROBERT SCHOLZ and SIGURT VITOLS broaden the inquiry to the sphere of corporate social responsibility (CSR). Using an original measure for the strength of codetermination institutions, they test whether wage boards influence the likelihood of firms to adopt socially conscious practices:

    “Codetermination strength is strongly and positively related to all three of the substantive types of CSR we examine, the adoption of targets for emissions reduction, the publication of a CSR report and commitment to employment security. This suggests that worker representatives are selective with regard to the policies they support: they appear less likely to support symbolic than substantive forms of CSR.

    We also shed light on the debate in comparative CSR literature regarding the adoption of CSR policies in coordinated market economies like Germany. All five policies examined are of the ‘explicit’ variety, adopted voluntarily by companies. They are often supposed to be most prevalent in liberal market economies like the USA and the UK where the need for business legitimacy is greatest… Our results suggest that worker representatives are also an important factor in explaining the spread of some types of explicit CSR policies to coordinated market economies.”

    Link to the paper.

    • The development of codetermination in Germany and Sweden has been the subject of numerous academic debates. Peter Swenson’s widely cited account concludes that codetermination was the product of a persistent “cross-class alliance.” By contrast, Walter Korpi’s “power-resource” interpretation argues that these institutions reflect a “distributive conflict and partisan politics based in social class.” Link to an article which lays out the first analysis, and link to one which presents the second.
    • A more recent paper by legal scholar Ewan McGaughey argues that codetermination in Germany was the result not of legal compulsion, but of the strength and unity of the German labor movement. Link.
    • Support for wage boards is growing among the American public, according to David Madland. Link to his analysis of the most recent public poll, his policy proposal, and coverage of the proposal on Vice.
    • To understand the degradation of collective bargaining models across European economies, see Lucio Baccaro and Chris Howell’s most recent book, Trajectories of Neoliberal Transformation. See especially chapters 6 and 8, which discuss the pressures faced by bargaining institutions in Germany and Sweden. Link.
    ‡ labor jobs_guarantee wageboard

    New Researchers: GENERATIONAL DOWRY

    Inheritance laws and female autonomy in the developing world

    A new paper by DUMAN BAHRAMI-RAD, a postdoctoral fellow at Harvard University, studies the potentially negative effects of female inheritance laws on the lives of women and girls in patrilineal societies. Included in the 2019 Pacific Conference for Development Economics assembled by the Center for Effective Global Action, the paper quantitatively assesses how female inheritance laws in the developing world may have a positive effect on the cousin marriage rate and limit female autonomy. The paper utilizes three datasets—on pre-industrial society, Italian Provinces, and Indonesian individuals—to find that “female inheritance is associated with a higher prevalence of cousin and arranged marriages as well as lower female economic participation and premarital sexual freedom.” From the paper:

    “Due to deep-rooted differences in their geography, subsistence economy, and agricultural and political organization, patrilineal societies ended up with different prevailing inheritance systems. I argued that patrilineal societies that traditionally included women in inheritance have developed practices encouraging inmarriage and controlling women’s sexuality in order to preserve the property within the patrilineage, prevent its fragmentation, and limit conflicting claims on the estate.”

    Link to the paper, link to the ungated version, link to Duman Bahrami-Rad’s website.

    ‡ gender 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 new paper by Todd Gabe, Jaison R. Abel, and Richard Florida examines occupational mobility in the United States from 2011-2017, finding that “around 70% of workers in low-end occupations stayed in the same occupation, 11% exited the labor force, 7% became unemployed, and 6% switched to a different low-end occupation.” Link.
    • Philipp Schonegger: “The Moral Behavior of Ethics Professors,” a replication study. The main behavior to which professors align their ethics is vegetarianism. Link.
    • “We project that expected warming in the next century will encourage further urbanization in middle-income countries such as Argentina, but it will slow down urban transition in poor countries like Malawi and Niger.” Giovanni Peri and Akira Sasahara anticipate the impact of climate change on rural-urban migration around the world. Link.
    • A post at World Bank blog by Koen Geven and Estelle Herbaut on the findings from their review on inequality in higher ed. One takeaway: “don’t just treat pupils with some information about the benefits of college, but give them active support through high school.” Link to the post, link to the working paper.
    • At Freedom to Tinker, Annette Zimmermann and Bendert Zevenbergen outline seven traps of AI ethics, including “(1) the reductionism trap, (2) the simplicity trap, (3) the relativism trap, (4) the value alignment trap, (5) the dichotomy trap, (6) the myopia trap, and (7) the rule of law trap.”Link.
    • “We find vulnerability to automation to be an important determinant of the demand for redistribution that should not be ignored.” Stefan Thewissen and David Rueda consider the potential for automation to transform European welfare politics. Link.
    • Zoe Loftus-Farren investigates how public records laws are used to impede social research in California. Link.
    • A fascinating and comprehensive series by Vox details the massive urban plan being implemented in Barcelona aimed at “reclaiming more than half the streets devoted to cars for mixed-use public spaces, or ‘superblocks.’” With support from the Kleinman Center for Energy Policy at the University of Pennsylvania, the five-part series traces the urban history of Barcelona, the history of the superblock project, and discusses reservations and conflict surrounding large-scale urban transformation. Link. The writer of the series, David Roberts, conducted a Reddit AMA on the topic yesterday. Link.
    • Micro-summaries more than 275 economics papers on African economies, from the Center for the Study of African Economies 2019 Conference held at Oxford last month. Link.
    • “Few inventions have been so simple as the stirrup, but few have had so catalytic an influence on history. The requirements of the new mode of warfare which it made possible found expression in a new form of western European society dominated by an aristocracy of warriors endowed with land so that they might fight in a new and highly specialized way. Inevitably this nobility developed cultural forms and patterns of thought and emotion in harmony with its style of mounted shock combat and its social posture. The Man on Horseback, as we have known him during the past millennium, was made possible by the stirrup, which joined man and steed into a fighting organism. Antiquity imagined the Centaur; the early Middle Ages made him the master of Europe.” From a 1962 study by Lynn White, Jr. Link.