22 March 2018

Quick Hits On Economics, Marriage and Education


Retail and Tourism

* There are lots of businesses that are in trouble: Claire's cheap earring stores are bankrupt, JC Penney is still in trouble, Toy's R Us is shutting down, Barnes and Noble had a weak Christmas season, and in general there has been a retail bloodbath. America's malls are rotting awaySears and Kmart continue their slow collapse. Sears hasn't recovered from being in deep trouble a year agoMacy's and Nordstrom are suffering. Now, maybe the right way to think about it is that we previously over-invested in retail and consumerism that adds little value. But, losing tens of thousands of low wage jobs, maybe hundreds of thousands, and creating huge holes on commercial real estate and municipal budgets is no small thing.

* There are winners in the retail sector as well, of course: online merchants, hobby stores, shoe stores, grocery stores and home improvement stores are still growing.

* Trump has been horrible for the U.S. tourism industry, scaring away tourists with his racism.

* I love Spotify but it's losing money hand over fist and facing huge lawsuits over obsolete royalty obligation rules that reflect the world's broken copyright laws.


* Trying to make housing affordable through deed restrictions that impose price controls is an ill conceived way to achieve this end.

Relaxing land use regulation near transit served areas is a much better solution. Building codes more friendly to tiny houses would also help. Seattle illustrates how zoning regulation also impacts educational opportunity. A critical look at the pros and cons of building more housing in San Francisco is worth a read. Lax land use regulations help control housing prices in Japan, but do does the fact that demand is pretty stable with lots of housing starts being scrapes to replace old homes with new ones.

* It is undeniable that Denver has some of the fastest surging apartment rents in the nations, however. This is because Denver's population is growing faster than it can build new housing (also here). The population growth, in turn, is a natural consequence of strong job creation in Denver.

* Condo construction is picking up in Denver, but this is largely a function of trends in rental rates and interest rates, rather than concerns about construction defect litigation. Rising interest rates, rising home prices, and student loan debt meanwhile have discouraged the latest generation from becoming first time homeowners.

* Alabama has the worst poverty of the developed world despite its low cost of living. Most Americans have regressed to Third World economic conditions.

Health Care and Reproductive Health

* The medical billing system in the United States is still corrupt, arbitrary and incredibly overpriced with no one controlling excess spending. Emergency rooms are serious offenders in these practices.

* "An increasingly common type of high-deductible insurance plan is touted for its money-saving potential, but a growing body of research indicates the plans don't motivate patients - or doctors - to curb spending on unnecessary medical services."

* But, using algorithms that aren't transparent to allocate health care and make other important decisions is also deeply problematic. Our system of public law to address this kind of problem in the public sector, and our parallel private law systems for addressing this kind of problem in the private sector, however, is not very good at the task of keeping these systems in check and working well.

Better birth control access would reduce abortions by two-thirds and save $12 billion a year.

In Japan, very few women use the pill, condoms are the main form of birth control, and abortions are quite common, guilty free and mostly done in the first trimester.

* What health conditions are affected by the business cycle? The 2008 recession increased obesity, diabetes and mental health conditions. It also dampened birth rates.

* Amish fertility rates closely track the rest of the country, despite the fact that the Amish don't use birth control and rarely obtain abortions. There is a parallel here to the decline in infectious disease rates before vaccines and antibiotics were in widespread use, once the germ theory of disease was widely known.


Young, single, childless women actually have higher earnings that comparable men. Getting married and having children is the key factor that results in gender gaps in income.

* Relative income of husbands and wives is a powerful predictor of divorce.

* Lots of Americans in their 20s are having kids before getting married:
[M]ost American women without college degrees have their first child in their 20s. These young women and their partners—who make up about two-thirds of twentysomething adults in the United States—are logging more time at the diaper aisle of the local supermarket than at the local bar.

This would not be such a big deal except for the fact that many of these twentysomethings are drifting into parenthood, becoming moms and dads with partners they don’t think are fit to marry or at least ready to marry. For instance, almost 1 in 2 babies—47 percent, to be precise—born to twentysomething women are now born to unmarried parents. In fact, twentysomething women now have the majority of children outside of marriage, which—given that 30 is the new 20—makes them the new teen moms.

The reality is that children born to unmarried twentysomething parents are three times more likely to grow up with a disorienting carousel of adults coming and going in the home, compared to children born to married parents. This kind of carousel, as sociologist Andrew Cherlin notes in his book The Marriage-Go-Round, is associated with higher rates of teen pregnancy, behavioral problems in school, and substance abuse. By contrast, "stable, low-conflict families with two biological or adoptive parents provide better environments for children, on average, than do other living arrangements."
In my view this is due to two factors: first, working class men have declining economic prospects and have not shared in economic growth since the 1970s (as documented by Piketty among others), while second, economic opportunities have surged for working class women since the 1970s and these women pay a relatively low price in their careers for time spent away from the work force compared to upper middle class women. Automation accounts for a lot of the working class economic slump. Drug tests (sometimes legitimately necessary for the job in question) are a major barrier to workplace re-entry for working class men. Wisconsin has seen the biggest middle class decline of any state. Black unemployment is at record lows but still much higher than unemployment rates for whites, as black poverty is also at record lows (its amazing what good eight years of an Obama economy did).

Whether it is in the African-American ghettos of Northern cities, or the social welfare paradise of Sweden, or in working class white America, women aren't economically dependent upon the fathers of their children and marriages become fragile.

Middle class marriages meanwhile have become more stable, but the rising ranks of single people are changing our society. Upper middle class men have participated in economic growth, making them good providers, and contrary to conventional wisdom rising income inequality is largely driven by increased earning for the working rich rather than rentiers.

* African-American boys are strongly downwardly mobile. Even if their families are in the top income quintile, they have no better prospects than working class boys on average. The story in the link attributes are significant part of this downward mobility to living in single family households. But, not all scholars agree that parental separation has a major impact on the economic prospects of children.

* Someone makes a case that easy divorce favors assortive marriage.

* Late marriage ages contributed to the success of England's industrial revolution.

* Otherwise modern, upper middle class young women in India, who are generally liberal, are still strongly prefer arranged marriages. Caste endogamy, religious endogamy, and a practice of not moving away from home until you are married, even when you are an adult, all play a part. This is a huge difference from U.S. values where one of our most sacred norms is respecting everyones right to love who they want to love, no matter what.

* Survey data says that caste status has a big impact on the lives of South Asian Americans in matters including religion and marriage.

* In Saudi Arabia, the Crown Prince has allowed women to drive and is giving them greatly custody rights in divorces. There is a strong correlation between affluence and security on one hand, and liberal-secular values on the other. Is affluence and security in Saudi Arabia changing that society's values from within?


* We enjoy all time high African-American college graduation rates, although on a very gender imbalanced basis. The gender gap in college attendance in favor of women is present in all races to some extent, however.

* Discrimination against Asian-Americans in college admissions is as significant as discrimination against Jews in higher education used to be, because Asian-Americans outperform the applicant pool and colleges don't want that to translate into a larger share of Asian-Americans on campus apparently.

* Most students with student loans from for profit colleges default on their loans.

* High school behavior is a powerful predictor of adult success:  "Being a responsible student, maintaining an interest in school and having good reading and writing skills will not only help a teenager get good grades in high school but could also be predictors of educational and occupational success decades later, regardless of IQ, parental socioeconomic status or other personality factors, according to new research." Critics argue that this is "middle class behavior" not objectively better behavior.

Study skills and aggression in school students are closely related, fairly stable, and powerful predictors of decisions to drop out of school.

* Closing bad schools is a more effective way to improve the quality of education than trying to improve existing schools. Strategies that improve educational quality are very hard to reproduce. Ending schools that are dragging down students is much easier, and we don't have to know why they are failing to shut them down. I'm well aware that this approach horrifies many of my political and personal peers, but it does work.

21 March 2018

Word of the Day: Elisor

An Elisor is basically a bailiff, sheriff, or coroner serving on a contract basis in a manner somewhat analogous to a special master. It also includes a clerk of court appointed by the Court to execute deed or document on behalf of someone else.