EconLog Archive
Economics of Education
A Question of Educational Discrimination
My favorite question from my latest Labor Economics final exam: Some sociologists have argued that discrimination on the basis of educational credentials should be illegal. What do the human capital and signaling models of education predict about the effect of such a law? Your answers? I’ll honor the best responses and offer my own around .. MORE
Cross-country Comparisons
Why So Little Exploitation of Developing Countries?
The internet tells me that people in rich countries exploit people in poor countries. If that’s true–a claim I don’t deny, since humans are routinely awful to each other–then people in rich countries are really bad at it. Just like in high school debate, let’s start by defining terms. The OED’s first two definitions .. MORE
Economics of Health Care
Update on OTC Contraceptives
In February, I wrote: Nevertheless, there is a way that the federal government now cuts access to contraceptives in a way that substantially raises the cost. Were the government to get rid of the regulation that does this, women’s access to contraceptives would rise and the cost would fall. What is the regulation? It’s the .. MORE
Economic Growth
Postrel on Progress
I wish I had been aware of Virginia Postrel’s excellent piece on technological progress when I wrote my post yesterday on electricity. In it, she takes on the views of Jason Pontin, my former editor at the Red Herring, and Peter Thiel, of PayPal and Facebook fame. Virginia grants Thiel’s point about the danger of .. MORE
Growth: Consequences
ELECTRICITY!
In Praise of Modern Technology Early Saturday afternoon, the electric power at our home in Pacific Grove went out. We were out at lunch when it happened and when I came home, I thought it was a neighborhood-wide thing, something that happens for a few hours at a time a once or twice each winter. .. MORE
Economics and Culture
The Case Against Education on Who You Know
The noble Vipul Naik has been prodding me to address the social networking benefits of education. Here’s my first take on the subject from the current draft of The Case Against Education. Who You Know About half of all workers used contacts – relatives, friends, acquaintances – to get their current job.[1] You could argue .. MORE
Cost-benefit Analysis
Independence and Growth
Garett interestingly builds on Lucas’ fact that “with the exception of Hong Kong, no massive economic modernization has ever happened in a colony.” Still, I’m unimpressed on multiple levels. 1. How about Macao? If you count so-called “settler societies,” then you need to add Canada, Australia, and New Zealand to the list of counter-examples. Or .. MORE
Economics and Culture
Pre-Assimilation
An especially clever argument by Nathan Smith: [G]lobalization has half-Americanized half the world already. 19th-century immigrants may have been racially more similar to America’s white native majority, but they were less familiar with democracy, with the English language, with America via movies and music and TV, with American-style market capitalism, with Coke and McDonalds and Microsoft .. MORE
Economics of Crime
Betting: Automatic Weapons vs. Rental Cars
One thing my co-blogger Bryan and I agree on is that proposing a bet is a good way of making people fess up to whether they’re really confident, especially about their extreme statements. Bryan might have said it differently than what I just said but when I do a search on his posts and put .. MORE
Energy, Environment, Resources
Murphy on Frum and Global Warming
Earlier this week, Robert Murphy, a frequent writer of Econlib Feature Articles, had an excellent critique of a piece on global warming by David Frum. Were I to quote all the good parts, I would end up quoting almost the whole thing. I highly recommend it. Still, I’ll quote a few parts and register one .. MORE
Economic Growth
Why are Economic Miracles Rare in Colonies?
A decade ago, Robert Lucas noticed a pattern: The economic progress that has come to Asia and Africa came after the colonial empires were dismantled. To put it another way, Lucas claims that with the exception of Hong Kong, no massive economic modernization has ever happened in a colony. So being an independently governed .. MORE
Economics of Education
The Case Against Education: The Project Evolves
In the last Table of Contents for The Case Against Education, chapter two is “Useless Studies with Big Payoffs: The Puzzle Is Real.” After writing this chapter for three months, I realized I had to split the discussion. Now there will be a full chapter showing that students learn few job skills in school, followed .. MORE
Labor Market
The Economics of “Right to Work”
I was at a conference last weekend at which one of the participants, from Michigan, was excited about the Michigan legislature’s passage of a “right to work” law. I started to share his excitement. On the other hand, some libertarian friends, on Facebook and elsewhere have criticized the law on the grounds that it prohibits .. MORE
Cost-benefit Analysis
Go Fight Some Real Crime: Why Doubling the Police Is Unreasonable
Tyler Cowen often calls Alex Tabarrok the best truth-tracker in Carow Hall. With good reason. When I ask Alex questions, he’s consistently careful, direct, and accurate. When I investigate his assertions, they check out. I trust Alex – even when he tells me things I don’t want to believe. When Alex says that police have .. MORE
Labor Market
The Folly of Obsessing over Marginal Tax Rates
It’s often wise to pay more attention to marginal tax rates than to average tax rates. If you can make your first $100 tax free but the 101st dollar is taxed at a marginal rate of 99% you’ll probably decide to earn $100 at most. But what is marginal? When it comes to career .. MORE
Fiscal Policy
WSJ’s “Roll Your Own” Deficit Reduction
The Wall Street Journal has on its site a list of options for reducing the projected $1-trillion-plus federal budget deficit for 2020. It’s a list of cuts in discretionary spending, cuts in so-called “entitlement” spending, and increases in taxes. I don’t know if you can get there without a subscription to the WSJ, but here’s .. MORE
Labor Mobility, Immigration, Outsourcing
Absurdities of the Tiebout Model
Economists across the political spectrum embrace the realism of the Tiebout model. The model’s intuition: At the level of local government, there are many consumers (i.e. residents and businesses), many suppliers (i.e. localities), and low switching costs – all the key ingredients of perfect competition. The upshot: We don’t need to worry about the efficiency .. MORE
Monetary Policy
Research Incentives: Milton Friedman on the Fed
Does money influence research outcomes? We’re used to hearing this question when it comes to pharmaceutical research and the same question is surely relevant to research in monetary economics. Central banks like the Fed, the ECB, and the BoE do a lot of hiring, sponsor a lot of conferences, pay a lot of honoraria. Might .. MORE
Public Choice Theory
The More-Visible Are Property Taxes, the Lower they Are
People hate the property tax more than other taxes. There are fairly regular “tax revolts” against the property tax, many of which are based on local or statewide referenda. Property tax limits, whether imposed by referenda or by state legislatures, often remain binding for a number of years–even decades. In contrast, successful revolts against other .. MORE
Family Economics
10 More Things I Learned in My First 10 Years of Parenting
After I finished my last post, parenting life lessons kept coming to mind. Ten more: 1. You cannot be a bad spouse and a good parent. 2. Do not let your kids ignore you. If your words call for a response, immediately make your question more and more blatant until you receive a response. 3. .. MORE
Taxation
When Taxes are Cut, What Does Regressive Mean?
How starting with a progressive tax system and cutting everyone’s taxes by the same percent gives you a regressive tax cut. We all know what a regressive tax is: it’s one that takes a higher percentage of income from low-income people than from high-income people. So it seems straightforward to judge whether a tax cut .. MORE