The Left and Right approaches to poverty
01 Feb 2015 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, liberalism, poverty and inequality, welfare reform Tags: capitalism and freedom, Leftover Left, poverty and inequality, The Great Enrichment
The Upside of Income Inequality » Gary Becker and Kevin Murphy
01 Feb 2015 Leave a comment
in economics of education, human capital, labour economics, liberalism, occupational choice, poverty and inequality Tags: education premium, educational attainment, graduate premium, The Great Enrichment
The average American household was poorer in 2013 than it was in 1983 – Vox
31 Jan 2015 1 Comment
in applied welfare economics, population economics, poverty and inequality, technological progress Tags: Brad De Long, The Great Enrichment, The Great Escape, The Great Fact, time machines
/cdn0.vox-cdn.com/uploads/chorus_asset/file/3351202/vox-chart_net-worth-change-v2_1024.0.png)
US net worth rose considerably over that period, which is what you would expect to see.
Technology has improved and productivity increased, so society has a greater capacity for wealth building. America was also quite a bit older on average in 2013 than it was in 1983, so average wealth should have gone up.
But all of these gains went to the top 20 percent of the population. It’s worse than that, actually.
Over 100 percent of the gains went to the top 20 percent, because the bottom 60 percent of the population got poorer.
What does this claim by Matthew Yglesias exactly mean? He writes frequently on economics, so his editor must think he knows something about it.
http://t.co/0hEAL8X1kS—
EPI Chart Bot (@epichartbot) July 04, 2015
If 60% of the population got poorer as compared to 1983, they would be better off stepping into a time machine to go back to 1983. That is the only logical interpretation of this claim about 60% of the population. I owe this time machine thought experiment to Brad De Long.
Of course, going back to 1983, would involve giving up all products and services invented since then, and all product upgrades since then.
https://twitter.com/classicepics/status/561432237976322048
More importantly, for a good proportion of the population, they have become very sick or die immediately when they stepped out side of the Time Machine. This is because of shorter life expectancies in 1983 and the unavailability of a whole range of lifesaving medicines.
Am I just pedantic because I want access to crucial diabetic and other medications unavailable 30 years ago? No Internet, no cable, no international travel and no mobile phones.
In his original thought experiment, De Long asks how much you would want in additional income to agree to go back in time to a specific year. De Long was an economic historian examining the differences in living standards as compared to 1890 and 1990 and how that gap is greatly underestimated in economic statistics. De Long would have refused to go into the time machine to return to 1890 unless he could pack a very large bag to take with him:
I would want, first, health insurance: the ability to go to the doctor and be treated with late-twentieth-century medicines.
Franklin Delano Roosevelt was crippled by polio. Without antibiotic and adrenaline shots I would now be dead of childhood pneumonia.
The second thing I would want would be utility hookups–electricity and gas, central heating, and consumer appliances.
The third thing I want to buy is access to information–audio and video broadcasts, recorded music, computing power, and access to databases.
None of these were available at any price back in 1890.
Spot the jihadist translated from French
31 Jan 2015 Leave a comment
in economics of crime, economics of religion, occupational choice, war and peace Tags: France, Jihadists, war on terror
Germany had major labour market deregulation on the eve of the global financial crisis
31 Jan 2015 Leave a comment
Spurious correlations alert: executions and murder rates – updated
30 Jan 2015 Leave a comment
in applied price theory, economics of crime, labour economics, labour supply, law and economics, occupational choice Tags: crime and punishment, death penalty, deterrence, occupational hazards, prison conditions, punishment
– Updated
Many a data shyster will make hay with the above chart on the simple correlation between executions and the drop in the US murder rate.
The reality is there are so few executions and they are so infrequent with the exception of Texas that any purported correlation between the death penalty and murder rates requires careful study.
Indeed, for some condemned prisoners, gang bangers are an example, their life expectancy may be increased by the long time they spend on death row versus been murdered by a business associated or a business rival on the streets. As Levitt noted:
no rational criminal should be deterred by the death penalty, since the punishment is too distant and too unlikely to merit much attention.
As such, economists who argue that the death penalty works are put in the uncomfortable position of having to argue that criminals are irrationally overreacting when they are deterred by it.
The occupational hazard of been murdered by business rival for gang bangers is higher than the chance of them been arrested, tried , convicted, and condemned to death and then executed after a long appeals process. Not surprisingly, Levitt argued that:
…the quality of life in prison is likely to have a greater impact on criminal behaviour than the death penalty.
Using state-level panel data covering the period 1950–90, we demonstrate that the death rate among prisoners (the best available proxy for prison conditions) is negatively correlated with crime rates, consistent with deterrence. This finding is shown to be quite robust.
In contrast, there is little systematic evidence that the execution rate influences crime rates in this time period.
The labour force participation of mothers in the 20th century
30 Jan 2015 Leave a comment
in gender, labour economics, labour supply Tags: engines of liberation, female labour force participation, gender wage gap, sex discrimination
First, work changed to offer more jobs to women. Farming declined sharply; industrial jobs peaked and then declined. Brawn became less important; precise skills, learning, and personal service became more important.
The new economy generated millions of white-collar and “pink-collar” jobs that seemed “suited” to women. That cannot be the full story, of course; women also took over many jobs that had once been men’s, such as teaching and secretarial work.
Second, mothers responded to those job opportunities. Some took jobs because the extra income could help families buy cars, homes, furnishings, and so on. Some took jobs because the family needed their income to make up for husbands’ stagnating wages (a noteworthy trend after the 1970s). And some took jobs because they sought personal fulfilment in the world of work.
via Why Did Married Mothers Go To Work? » Sociological Images.
Are Uber drivers twice as likely to be murdered as a cop?
30 Jan 2015 2 Comments
in economics of crime, economics of regulation, health and safety, labour economics, law and economics, occupational choice Tags: compensating differentials, occupational hazards, police, taxi regulation, Uber
Stranger than fiction: The reason why Zinedine Zidane was almost sacked as main coach of real Madrid B
30 Jan 2015 1 Comment
in economics of regulation, occupational regulation, rentseeking, sports economics Tags: Eurosclerosis, occupational regulation, soccer, Spain
Zinedine Zidane is one of the top 5 soccer players of all time (World Cup 1998, Euro Cup 2000, etc).
He retired and became assistant coach for Real Madrid in 2013 and in August 2014, main coach for Real Madrid B.
A director of the Spanish National Football Coach Education Centre because he does not have a three year higher education degree in Soccer coaching.
Zinedine Zidane was fined and expelled from Spanish league. His lawyer found a loophole due to his French citizenship and saved the day.
Zidane made his professional debut aged 16. Too busy becoming one of the greatest players of all time to spend three years at university. He spent his first weeks at his first club mainly on cleaning duty as a punishment for punching an opponent who mocked his ghetto origins.
HT: Lee Ohanian via John Cochrane
Robert D. Tollison on the main positive contribution of economists to public policy
30 Jan 2015 Leave a comment
The political proclivities of different occupations
30 Jan 2015 Leave a comment
in occupational choice, Public Choice Tags: academic bias, media bias, political bias, voter demographics
History of cultural bias has led to a lack of diversity in green and left-wing groups
29 Jan 2015 Leave a comment
in occupational choice, personnel economics, politics - Australia, politics - New Zealand, politics - USA Tags: activists, Greens, Inner-city Left, Leftover Left
Minorities represent nearly 40 percent of Americans, yet account for fewer than 16 percent of workers at the government agencies, nongovernmental organizations called NGOs and foundations that were studied.
…Taylor wrote that an “unconscious bias” exists within the liberal and progressive culture of the groups, preserving a racially homogenous workplace. “Recruitment for new staff frequently occurs through word-of-mouth and informal networks,” the study said. “This makes it difficult for ethnic minorities, the working class, or anyone outside of traditional environmental networks to find out about job openings and apply for those jobs.”
Utopia, you are standing in it! 
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