
Source: Financial market wrongdoing: Fines vs reputational sanctions | VOX, CEPR’s Policy Portal
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
30 Mar 2016 Leave a comment
in economics of crime, economics of education, entrepreneurship, financial economics, industrial organisation, law and economics, survivor principle Tags: crime and punishment, signalling
30 Mar 2016 Leave a comment
in economic history, economics of media and culture, entrepreneurship, Music Tags: entrepreneurial alertness, U2
26 Mar 2016 Leave a comment
in applied welfare economics, economic history, entrepreneurship, human capital, labour economics, poverty and inequality Tags: entrepreneurial alertness, superstar wages, superstars, top 0.1%, top 1%
Piketty and Saez (2003, updated) estimated the share of income held by the top 1% from 13 percent in 1991 to 23 percent in 2012. The new Bricker et al. research shows only a 7 percentage point increase to 18 percent in 2012. The share held by the super-rich, the top 0.1% has increased much at all.
Source: Measuring income and wealth at the top using administrative and survey data via How super-rich Americans get that way is changing – AEI | Pethokoukis Blog » AEIdeas.
Source: Measuring income and wealth at the top using administrative and survey data via How super-rich Americans get that way is changing – AEI | Pethokoukis Blog » AEIdeas.
25 Mar 2016 Leave a comment
in discrimination, economics of information, entrepreneurship, human capital, labour economics, personnel economics Tags: asymmetric information, counter-signalling, employer discrimination, racial discrimination, screening, signalling, statistical discrimination
Statistical discrimination is a harsh mistress. If reliable measures of the quality of job applicants are unavailable for short-listing, such as credit checks, coarser, less reliable screening devices will be employed. That was the case when credit checks were prohibited in employment recruitment:
Looking at 74 million job listings between 2007 and 2013, Clifford and Shoag found that employers started to become pickier, especially in cities where there were a lot of workers with low credit scores. If a credit-check ban went into effect, job postings were more likely to ask for a bachelor’s degree, and to require additional years of experience.
There are other ways that employers could have also become more discerning, Shoag says. They might have started to rely on referrals or recommendations to make sure that applicants were high-quality. In the absence of credit information to establish trustworthiness, they may even have fallen back on racial stereotypes to screen candidates. The researchers couldn’t measure these tactics, but they’re possibilities.
Drug testing allows employers to dispel less accurate stereotypes about drug use among different ethnic and social groups. They increased hiring of minorities because a reliable measure became available of their drug use:
…after a pro-testing law is passed in a state, African-American employment increases in sectors that have high testing rates (mining, manufacturing, transportation, utilities, and government).
These increases are substantial: African-American employment in these industries increases by 7-30%. Because these industries tend to pay wage premia and to have larger firms offering better benefits, African-American wages and benefits coverage also increase. Real wages increase by 1.4-13% relative to whites. The largest shifts in employment and wages occur for low skilled African-American men.
I also find suggestive evidence that employers substitute white women for African-Americans in the absence of testing. Gains in hiring African-Americans in these sectors may have come at the expense of women, particularly in states with large African-American populations.
Employers test for drug use both for health and safety reasons and as a way of screening out less reliable employees. People who break the rules are not reliable employees and that includes taking drugs. In low skill jobs, what employers seek is a recruit who is friendly and reliable.
Testing of the skills of workers also showed similar results. What happened is that the ratio of black to white hirings do not change. The administration of these skills tests allowed the more productive of both white and black job applicants to be identified and hired.
Employers already had an accurate stereotype of the average skills of different ethnic groups. Administration of tests allow them to identify which members of each group were the most productive.
It is a standard result that statistical discrimination improves the chances of below-average applicants subject to the stereotype but harms those of above average quality. For that reason, applicants look for what methods of counter-signalling to show that they are indeed a quality applicant – make themselves stand out from the crowd.
Employers profit from developing screening devices that go beyond stereotypes to identify above-average applicants. They want screening devices that find those who do not otherwise stand out from the crowd because of difficulties in transferring credible information about their quality. This is a special difficulty with low-skilled vacancies because hiring is made based much more than on character than experience.
23 Mar 2016 Leave a comment
in economics, economics of media and culture, entrepreneurship, politics - USA, Public Choice Tags: media bias
21 Mar 2016 Leave a comment
in economic history, entrepreneurship, industrial organisation, international economics, survivor principle Tags: creative destruction
19 Mar 2016 Leave a comment
in economic growth, economic history, entrepreneurship, fiscal policy, macroeconomics, public economics Tags: British disease, British economy, growth of government, sick man of Europe, size of government, taxation and entrepreneurship, taxation and investment, taxation and labour supply, Thatchernomics
The large rise in tax in personal income in the 1970s coincided with the rise of the British disease and British economy becoming widely known as the sick man of Europe. The large decline in taxation in personal income under Thatchernomics was followed by an economic boom.
Source: OECD Stat.
17 Mar 2016 Leave a comment
in applied welfare economics, economic history, economics of education, entrepreneurship, human capital, labour economics, politics - New Zealand, poverty and inequality, urban economics Tags: household wealth, housing prices, pessimism bias, top 1%
Tring Le found that the human capital stock was consistently 2.6 times the value of the physical capital stock of New Zealand.
I decided to apply that ratio to the net capital stock of New Zealand estimates of Statistics New Zealand back to 1987 to see what we get. It is pretty standard for the value of human capital to be two to two and one-half times the value of physical capital.
Source: National Accounts (Industry Benchmarks): Year ended March 2013 and Lˆe Thi. Vˆan Tr`ınh, Estimating the monetary value of the stock of human capital for New Zealand, University of Canterbury PhD thesis (September 2006), Table 4.8: Human and physical capital stocks.
All the above chart says it is most wealth in New Zealand is held by ordinary people either as their human capital or the value of their homes.
16 Mar 2016 Leave a comment
in economic history, entrepreneurship, financial economics Tags: creative destruction, entrepreneurial alertness

.
13 Mar 2016 Leave a comment
in economic history, entrepreneurship, health economics Tags: creative destruction, entrepreneurial alertness, intellectual monopolies, patents and copyrights, research prizes, The Great Escape
No new classes of antibiotics has been discovered since 1987. They are looked upon as a poor investment by pharmaceutical entrepreneurs because there are so many generic competitors. To make it even more complicated, any new antibiotic that might be invented would have to be held in reserve for a major case of an antibiotic resistant infection.

10 Mar 2016 Leave a comment
in applied price theory, entrepreneurship, politics - USA, public economics
The welfare states in Scandinavia do not make their societies any less unequal than most other welfare states once you take into account taxes and transfers – after-tax redistributions.

Celebrating humanity's flourishing through the spread of capitalism and the rule of law
A History of the Alt-Right
Econ Prof at George Mason University, Economic Historian, Québécois
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Scholarly commentary on law, economics, and more
Beatrice Cherrier's blog
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Why Evolution is True is a blog written by Jerry Coyne, centered on evolution and biology but also dealing with diverse topics like politics, culture, and cats.
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
A rural perspective with a blue tint by Ele Ludemann
DPF's Kiwiblog - Fomenting Happy Mischief since 2003
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
The world's most viewed site on global warming and climate change
Tim Harding's writings on rationality, informal logic and skepticism
A window into Doc Freiberger's library
Let's examine hard decisions!
Commentary on monetary policy in the spirit of R. G. Hawtrey
Thoughts on public policy and the media
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Politics and the economy
A blog (primarily) on Canadian and Commonwealth political history and institutions
Reading between the lines, and underneath the hype.
Economics, and such stuff as dreams are made on
"The British constitution has always been puzzling, and always will be." --Queen Elizabeth II
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
WORLD WAR II, MUSIC, HISTORY, HOLOCAUST
Undisciplined scholar, recovering academic
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Res ipsa loquitur - The thing itself speaks
In Hume’s spirit, I will attempt to serve as an ambassador from my world of economics, and help in “finding topics of conversation fit for the entertainment of rational creatures.”
Researching the House of Commons, 1832-1868
Articles and research from the History of Parliament Trust
Reflections on books and art
Posts on the History of Law, Crime, and Justice
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Exploring the Monarchs of Europe
Cutting edge science you can dice with
Small Steps Toward A Much Better World
“We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert”. - J Robert Oppenheimer.
The truth about the great wind power fraud - we're not here to debate the wind industry, we're here to destroy it.
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
Recent Comments