Are you joking here New York Times? So what if it is James Heckman… the sample size is 37!

When the boys reached age 30, they earned an average of $19,800 more a year than those in the control group and had half a year more education. (The small sample size — 37 boys in the programs who stayed in the study — means the difference was not very precisely estimated.) When the girls reached 30, they had two more years of education and earned about $2,500 more, the study found.

OK this is probably a worthwhile and well-done study of the small sample.  And as the truism in economics says, “the smaller the sample the harder the methods.”  But writing an article as if this had really convinced someone of the second-generation effects of childcare?  And just based on this paragraph, why not tout a different result, “Heckman finds education useless for raising earnings of women!”

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Trump’s “America First” rhetoric? William Wyler had it pegged back in 1946.

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For everyone who served on a committee that had to write a report

Bottom line? I express as gender female at the university.

Gender Differences in Accepting and Receiving Requests for Tasks with Low Promotability Linda Babcock, Maria P. Recalde, Lise Vesterlund and Laurie Weingart

Gender differences in task allocations may sustain vertical gender segregation in labor markets. We examine the allocation of a task that everyone prefers be completed by someone else (writing a report, serving on a committee, etc.) and find evidence that women, more than men, volunteer, are asked to volunteer, and accept requests to volunteer for such tasks. Beliefs that women, more than men, say yes to tasks with low promotability appear as an important driver of these differences. If women hold tasks that are less promotable than those held by men, then women will progress more slowly in organizations.

Source: [AEA] eTOC for American Economic Review Vol. 107, Issue 3 — March 2017 – mkevane@scu.edu – Santa Clara University Mail

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Maybe you studied abroad in Spain? Then you should watch El fin de ETA!

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Economic justice and basic income

Last week at our student economics discussion group we had a nice exchange about  universal basic income.  I suggested that wouldn’t everyone (right, left, libertarian and socialist) agree that in a wealthy society few would object to a program of minimum income?  So nobody would end up living under a bridge through a series of unfortunate events; rather everyone could afford reasonable accommodation (maybe not on the Sausalito waterfront, but certainly in Stockton), access to communication (clearly Internet access is essential in our society for fostering a community and engaging in commerce), and basics of living (Adam Smith’s linen shirt).

My colleague Bill Sundstrom has a nice podcast covering some of the basics of economic justice and how they lead to a basic social safety net.  The Catholic Council of Bishops has a statement about economic justice.  Some libertarians favor a basic income guarantee.

And Tyler Cowen over at Marginal Revolution has had numerous blog posts on this topic.  Here is a good post, focusing on the practicalities and (in his view) likely inevitable evolution of the simple concept into a complex, rent-seeking-riddled government bureaucracy!

Back of the envelope calculation?  Let’s say the guarantee was $10,000 per person in the U.S. per year.  Let’s say it only applies to adults.  250 million adults means transfers of $2.5 trillion per year.  U.S. GDP is about $17 trillion.  So this is less than 10% of GDP.  And remember, for maybe 70% of the adults the tax and transfer just wash out (if you are a working adult paying $30K in taxes, you get a $10K transfer, so on net you are paying $20K taxes the same as you might be paying now.)  So this is certainly feasible or possible.  Now if the basic income were $30,000 per adult, then we are talking about possibly very distortionary taxes to raise that much revenue.  Incentives matter!

Any economist of course right away puts on their “one hand, other hand” hat… in regions of the country where the cost of living is extraordinarily low (houses for $25,000, nothing to do on Saturday night) should not the transfer reflect that?  Might not a geographically uniform transfer generate a lot of unanticipated migration across states and cities?  And we’re off!

 

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Gregory Mankiw, tax reform, and the carbon tax

Republicans are proposing and are excited about the possibilities for a huge overhaul of the U.S. tax system.  Here is Mankiw, probably the most prominent and well-respected Republican economist in the US, in January:

Consider the following tax reform:

1. Impose a retail sales tax on consumer goods and services, both domestic and imported.
2. Use some of the proceeds from the tax to repeal the corporate income tax.
3. Use the rest of the proceeds from the tax to significantly cut the payroll tax.

Before moving on, ask yourself: Do you like this plan?  As I understand it, this plan is, in effect, what the Republicans in Congress are proposing.

Here is Mankiw on a carbon tax:

First, the federal government would impose a gradually increasing tax on carbon dioxide emissions. It might begin at $40 per ton and increase steadily. This tax would send a powerful signal to businesses and consumers to reduce their carbon footprints.

Second, the proceeds would be returned to the American people on an equal basis via quarterly dividend checks. With a carbon tax of $40 per ton, a family of four would receive about $2,000 in the first year. As the tax rate rose over time to further reduce emissions, so would the dividend payments.

Third, American companies exporting to countries without comparable carbon pricing would receive rebates on the carbon taxes they’ve paid on those products, while imports from such countries would face fees on the carbon content of their products. This would protect American competitiveness and punish free-riding by other nations, encouraging them to adopt their own carbon pricing.

Finally, regulations made unnecessary by the carbon tax would be eliminated, including an outright repeal of the Clean Power Plan.

Here are links to news stories from Science and the Washington Post.  Older commentary (from pre-Trump era, 2009!) is here.  Economic Rockstar Podcast with Mankiw is here.

I hope we do have a debate on these big picture issues and good legislation gets passed.  Don’t we all?  But I guess I am pretty pessimistic that Republicans, despite their  majorities, are not going to be (extremely?) influenced by the carbon emitters lobby.

P.S.  Sundstrom adds:  …the loosening of other regulations “made unnecessary” needs to be done judiciously, for a variety of reasons. For one thing, pollution pricing is problematic when there are large local effects. This turns out to have been true for SO2, it appears… http://billsundstrom.blogspot.com/2015/07/was-cap-and-trade-for-so2-actually.html   …  A carbon-tax-plus-revenue-neutral-rebate proposal not unlike Mankiw’s was actually on the ballot in Washington state this past fall, and failed. It was championed by Yoram Bauman, known as the stand-up economist (he is a professional economist-comedian, and a friend of Shin’s). The story is fascinating and, to me, a little depressing.  http://www.vox.com/2016/10/18/13012394/i-732-carbon-tax-washington 

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I guess Trump team is consistent about one thing: They really would rather have coal than advanced 21st century batteries

James J. Greenberger, the executive director of NAATBatt International, a trade group for the advanced battery industry, said ARPA-E had been of enormous benefit to the industry. “We’re absolutely stunned by it,” Mr. Greenberger said of the agency’s potential elimination, which he announced to industry leaders gathered at his group’s annual conference in Arizona. “I don’t know what’s going through the administration’s head. It’s almost surreal.”

Full story from The New York Times is here.

Posted in United States