Celebrating humanity's flourishing through the spread of capitalism and the rule of law
24 Apr 2016 Leave a comment
in economics of education, human capital, income redistribution, labour economics, minimum wage, poverty and inequality, rentseeking Tags: Director's Law, IQ, rational irrationality, social justice warriors
The majority of New Zealanders do not qualify for university. Perhaps Labour and the Greens should spend more time worrying about those who do not achieve university entrance standard.
Source: School leavers with NCEA level 3 or above | Education Counts.
Anyone who achieve university entrance standard is among the intellectual elite. They have a head start in life. Labour and the Greens are preoccupied with giving those with a head start in life more freebies.
23 Apr 2016 Leave a comment
in economics of crime, law and economics, occupational choice Tags: Australia, career criminals, crime and punishment, criminal deterrence, deportations, economics of immigration, law and order
When a non-citizen spends 10 of his 40 odd years in Australia behind bars, most recently in 2011, the only question that should be posed is why was not he deported much earlier?
Source: Former criminal deported and separated from family after 40 years in Australia | Stuff.co.nz.
He is a career criminal who deserves no sympathy. He is the author of his own misfortunes in being separated from his family in Australia. Sympathy should go to his many victims, not to him.
More fool him when he spent 9 months in immigration detention because he chose to appeal his deportation. The criterion for automatic cancellation of Australian visas for criminals is accumulating 12 months in prison. That is a low threshold for automatic deportation unless the minister grants a waiver.
With 10 years behind bars, his appeal had no chance of success. He was a career criminal Australia could well be shot off.
23 Apr 2016 1 Comment
in applied price theory, applied welfare economics, economics of regulation, labour economics, labour supply, occupational choice, occupational regulation, Public Choice, rentseeking Tags: adverse selection, barriers to entry, moral hazard, occupational licensing, occupational regulation
The 2015 Current Population Survey in the USA added a question about whether you needed a licence or a certificate to practice your occupation. One in 4 Americans say they need a licence or certificate. 22.4% need a license and 3.1% need a certificate among employed over the age of 16 in the USA.
Source: Bureau of Labour Statistics, Labor Force Statistics from the Current Population Survey (2015), Certification and licensing status of the employed by occupation Table 5.
This estimate of 25% is less than the 30% estimated by Kleiner and Vorotnikov (2015) using a Harris Poll. Kleiner and Vorotnikov (2015) also found that some American states regulate twice as many occupations as others. This diversity in federalism strains any public interest explanation of occupational regulation.
Occupational regulation is more likely to be an issue for those who finished further education. It would have been better if the estimate by the Bureau of Labour Statistics was for adults and not have included teenagers.
The purpose of occupational regulation is to protect buyers from quacks and lemons – to overcome asymmetric information about the quality of the provider of the service.
The main issue with quacks in the labour market is whether there is a large cost of less than average quality service, and is there a sub-market who will buy less than average quality products in the presence of competing sellers competing on the basis of quality assurance. This demand for assurance creates opportunities for entrepreneurs to profit by providing assurance of quality.
Mostly disciplinary investigations and deregistrations under the auspices of occupational regulation are for gross misconduct and criminal convictions rather than the shading of quality.
23 Apr 2016 Leave a comment
in economic history, economics of education, economics of media and culture, gender, human capital, labour economics, labour supply, occupational choice Tags: gender gap, gender wage gap, reversing gender gap
22 Apr 2016 Leave a comment
in labour economics, labour supply Tags: compensating differentials
21 Apr 2016 Leave a comment
in environmental economics, environmentalism, labour economics, labour supply, population economics Tags: doomsday prophecies, Earth Day, Paul Ehrlich
20 Apr 2016 Leave a comment
in applied price theory, economics of media and culture, entrepreneurship, job search and matching, labour economics, managerial economics, minimum wage, organisational economics, personnel economics, theory of the firm Tags: living wage, offsetting behavior, The fatal conceit
19 Apr 2016 Leave a comment
in labour economics, labour supply, managerial economics, market efficiency, organisational economics, personnel economics, politics - New Zealand Tags: British economy, British politics, employment law, employment regulation, fixed costs of working, part-time work, The fatal conceit, The pretense to knowledge, zero hours contracts
Revealed preference rules. Not only do about half of unemployed turned down offers of zero hour contract jobs, those that switch from a zero hours contract to minimum hours are not much different from the number of people in these type of jobs who would be quitting to another job anyway.
Source: McDonald’s Workers Are Just Lovin’ Their Zero Hours Contracts – Forbes and McDonald’s offer staff the chance to get off zero-hours contracts | UK news | The Guardian.
18 Apr 2016 Leave a comment
in fiscal policy, labour economics, labour supply, macroeconomics, poverty and inequality, public economics Tags: growth of government, income inequality, measurement error, Ricardian theory of budget deficits, Social Security, top 1%, wealth inequality
Markus Poschke and Barış Kaymak have just put out a paper arguing that increased social spending is a major driver of wealth inequality:
Another important and often overlooked third factor is the rise in the generosity of government transfers since 1960, mostly due to the expansion of public pensions (social security) and the introduction of public health insurance for the elderly (Medicare).
Combined spending on these two programs accounted for almost 9% of US GDP in 2010, up from less than 3% in 1960…
These government programmes tend to curb the need to rely on personal savings for retirement, especially among low and middle-income households, and might thus explain why their share in total wealth has declined.
This makes a good to good degree of sense. I have previously argued that using the arguments of Edward Prescott that it is not wise for people on ordinary income to save for their retirement when they can go down to the local Social Security office and claim an old age pension.
51% of nonretirees doubt they will receive Social Security… on.gallup.com/1NcwzEa #GallupDaily http://t.co/ZhKnHYtr1X—
(@GallupNews) August 13, 2015
It is even less wise to save that for retirement if those savings reduce your eligibility for an old age pension. Far better just to invest in a nicer house and pass it on to your children. Poschke and Kaymak note that measures of private wealth inequality miss these claims to old age pensions:
… statistics on wealth inequality that do not capture households’ claims on the public sector are incomplete and overstate top wealth shares.
This is not a new argument. Back when the Ricardian theories of budget deficits came to prominence and before that in debates on theories of the public debt, the more Keynesian sides of those arguments did argue that people were irrational for not including their old age pension entitlements under social security schemes in their calculations of their wealth.
Some of their taxes were paying for their future old age pension and were another form of wealth rather than a tax. As such, taxpayers should regard this part of their taxes as investments and not cutting back their labour supply in response as they do to other taxes.
How much of the rise in wealth inequality is due to this failure to measure Social Security wealth as represented by old age pension entitlements? Their estimate is about 25%:
…technological factors play a dominant role not only for changes in income inequality, as is well known, but also for wealth inequality. As high-earning households save part of their additional income, their share of wealth also rises.
This channel accounts for about half of the total increase in wealth inequality. Tax cuts and the expansion of transfers each account for about half of the remainder…
While tax cuts encourage saving, larger transfers reduce saving incentives for retirement, in particular for low and middle income groups. This implies that these groups’ share of private wealth declines.
Note though that this is partly due to the fact that measures of private wealth inequality, like those compiled by Saez and Zucman, do not include claims to future government transfers, like social security, which constitute wealth for their owners.
18 Apr 2016 Leave a comment
in development economics, growth disasters, growth miracles, industrial organisation, international economics, labour economics, labour supply Tags: foreign direct investment, foreign investment, multinational corporations, Walter Bloch
18 Apr 2016 Leave a comment
in labour economics, politics - USA, poverty and inequality Tags: child poverty, family poverty, single mothers, single parents, social insurance, unemployment benefit, welfare state
15 Apr 2016 Leave a comment
in applied price theory, economics of crime, labour economics, law and economics, occupational choice Tags: crime and punishment, law and order
Stealing soap is almost as good as stealing cash.
Soap and razor blades are surprisingly valuable to petty thieves because they are easy to offload at the pub or the local market stalls
Source: Why Thieves Steal Soap
15 Apr 2016 Leave a comment
in applied price theory, applied welfare economics, Austrian economics, labour economics, minimum wage Tags: living wage
14 Apr 2016 Leave a comment
#EqualPayDay This coupon graphically represents the statistical fairly tale that is being spread today http://t.co/xwQXCrWE4d—
Mark J. Perry (@Mark_J_Perry) April 14, 2015
13 Apr 2016 Leave a comment
in discrimination, economic history, gender, human capital, labour economics, labour supply, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality Tags: Australia, British economy, gender wage gap
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