The Unassuming Economist

Source: VoxEU

“After a century of stability, the labour share of national income began to decline around 2000 in the US and many other countries. This column reviews the growing literature examining the potential reasons for the decline of the labour share, which include (1) capital-biased technical change, (2) globalisation and the rise of China, (3) increasing industry concentration and market power, (4) unionisation, and (5) population growth. The column also discusses pitfalls associated with common empirical strategies in the literature and suggests that more work is needed to understand fundamental, rather than proximate, causes of the decline.“

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Is Something Different this Time about the Effect of Technology on Labor Markets (2019)

The COVID-19 pandemic brought with it numerous travel and immigration-related restrictions throughout the globe. For the USA, this translated into a shortfall of nearly 2 million working-age immigrants compared to how many there would have been if the pre-2020 immigration trend had continued unchanged. 

Metadata within this shows that out of these 2 million immigrants nearly one million would have been college graduates, implying a loss to the US labor market in terms of skilled workers, entrepreneurs, and a huge loss to American Universities which annually attract several foreign students. The drop in numbers of highly-skilled immigrants is significant due to its “long-run effects on productivity, innovation, and entrepreneurship”. The blog sheds light on these and several such issues.

Click here to read the full blog.

Source: NBER Working Paper (2022)

Abstract– “Need fluctuates over the business cycle. We conduct a survey revealing a desire for nonprofit activities to countercyclically expand during downturns. We then demonstrate, using comprehensive US nonprofit data drawn from millions of tax returns, that the public’s hopes are disappointed. Nonprofit expenditure, revenue, and balance sheets fluctuate procyclically: contracting during national and local downturns. This finding is evident even for a narrow group of nonprofits the public most wishes would expand during downturns, e.g., those providing critical needs like food or housing. Our new facts contribute to the charitable giving, nonprofit, and business cycle literatures (sic).”

Source: VoxDev

Authors of this article (2022), Baafra Abeberese, A. et al describe their study and its results as follows:

“We study how democratisation affects firm productivity — a critical micro-driver of economic growth. We do so in the context of Indonesia, which had been under the dictatorial rule of Soeharto for three decades, until the unexpected collapse of his regime in 1998. Using the exogenous timing of when each district in the country transitioned to a democracy, we estimate the causal effect of democratisation on firm productivity. We combine data on the timing of democratisation with an annual census of manufacturing firms over two decades to analyse the impact of democratisation on firms using an event study design. Our findings suggest that democratic leaders are less likely to impose socially inefficient regulations or engage in rent-seeking and, hence, enhance firm productivity.”

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Revisiting the causal effect of democracy on long-run development

In a latest blog for the Conversable Economist, author Timothy Taylor studies data from the OECD publication, Health at a Glance (2021) to understand why meaningful healthcare reform in the USA may be harder to achieve.

It glances over evidence that demonstrates USA’s not-so-commendable performance on health and wellbeing indicators (like mortality, growth in life expectancy, etc.) despite a large share of expenditure on healthcare. Subsequently, parameters of Americans’ satisfaction from their healthcare industry are discussed, which are found to be upbeat and high-ranking in contrast.

Click here to read the full blog.