Month: September 2014

The return to education in France?

by  Tyler Cowen in

Pierre Mouganie has a new paper:

In 1997, the French government put into effect a law that permanently exempted young French male citizens born after Jan 1, 1979 from mandatory military service while still requiring those born before that cutoff date to serve. This paper uses a regression discontinuity design to identify the effect of peacetime conscription on education and labor market outcomes. Results indicate that conscription eligibility induces a significant increase in years of education, which is consistent with conscription avoidance behavior. However, this increased education does not result in either an increase in graduation rates, or in employment and wages. Additional evidence shows conscription has no direct effect on earnings, suggesting that the returns to education induced by this policy was zero.

You should note of course that the “return to education you wish to do for non-draft-avoiding reasons” still may be positive or strongly positive.  Nonetheless this is an object lesson in the point that the goal is not to increase educational attainment per se, but rather good outcomes probably require “education plus some of the prerequisites and complements of education.”  The large number of unemployed engineers in some of the Arabic countries illustrate a related point.

For the pointer I thank the excellent Kevin Lewis.

Caffeine-infused underwear fails (there is a great stagnation)

by  Tyler Cowen in

Bras, girdles and leggings infused with caffeine and sold as weight loss aids were more decaf than espresso, and the companies that sold them have agreed to refund money to customers and pull their ads, U.S. regulators said on Monday.

The Federal Trade Commission said Wacoal America and Norm Thompson Outfitters, which owns Sahalie and others, were accused of deceptive advertising that claimed their caffeine-impregnated clothing would cause the wearer to lose weight and have less cellulite.

There is more here, and for the pointer I thank Glenn Mercer.

How prominent are European renewables?

by  Tyler Cowen in

Deconstruction of the EU’s actual greenness must start by separating old renewables from new renewables — an essential task because in most countries the old renewables still provide the largest combined contribution in the green category. Readers of European news might be forgiven if they thought that wind turbines and PV panels, both heavily promoted and subsidized by many governments, lead the charge toward the continent’s renewable future. Actually, “solid biofuels” continue to be by far the largest category. In plain English, solid biofuels are wood, the oldest of fuels, be it trunks directly harvested for heat and electricity generation and burned as chips, or large amounts of wood-processing waste — a category particularly abundant in the EU’s two Nordic members with large forestry sectors. In 2012, 80 percent of Finland’s and 52 percent of Sweden’s renewable energy came from wood, and the average for EU-28 was 47 percent; even for Germany, the most aggressive developer of wind and solar, it was about 36 percent.

Burning logging and wood-processing wastes make sense; importing wood chips from overseas in order to meet green quotas does not. In 2013, the EU was burning more than 6 million tons of imported wood pellets. According to Forests and the European Union Resource Network, if all the EU states were to meet their 2020 green quotas, some of them would have to burn 50-100 percent more wood than they did in 2010. Imports now come mostly from North American and Russian forests, but Brazil is considered as the best source for future imports.

The irrationality of wood-based electricity generation is perhaps best illustrated by the conversion of Britain’s largest, originally coal-fired station to burning wood chips: initially they were to come from Brazil, but eventually more than 6 million tons a year will come from the swamp forests of North Carolina and tree plantations in Georgia. And wood-burning electricity generation would not be carbon-neutral even if all the trees cut down for chips were promptly replanted and if all of them regrew quickly and completely: more trees would have to be planted in order to offset carbon released by fossil fuels used in harvesting, processing, and intercontinental transportation of imported wood.

That is from Vaclav Smil, there is more here.

The true competition has arrived, just ask the Thai Delicious Committee

by  Tyler Cowen in

Hopscotching the globe as Thailand’s prime minister, Yingluck Shinawatra repeatedly encountered a distressing problem: bad Thai food.

Too often, she found, the meals she sampled at Thai restaurants abroad were unworthy of the name, too bland to be called genuine Thai cooking. The problem bothered her enough to raise it at a cabinet meeting.

Her political party has since been thrown out of office, in a May military coup, but her initiative in culinary diplomacy lives on.

At a gala dinner at a ritzy Bangkok hotel on Tuesday the government will unveil its project to standardize the art of Thai food — with a robot.

Diplomats and dignitaries have been invited to witness the debut of a machine that its promoters say can scientifically evaluate Thai cuisine, telling the difference, for instance, between a properly prepared green curry with just the right mix of Thai basil, curry paste and fresh coconut cream, and a lame imitation.

Has there ever been a better committee name than this?:

The government-financed Thai Delicious Committee, which oversaw the development of the machine, describes it as “an intelligent robot that measures smell and taste in food ingredients through sensor technology in order to measure taste like a food critic.”

In a country of 67 million people, there are somewhere near the same number of strongly held opinions about Thai cooking. A heated debate here on the merits of a particular nam prik kapi, a spicy chili dip of fermented shrimp paste, lime juice and palm sugar, could easily go on for an hour without coming close to resolution.

The full story is here, excellent throughout, and for the pointer I thank Otis Reid.

If you can work from home, where should home be?

by  Alex Tabarrok in

If you can work from home, where should home be? NomadList has combined data on internet speed, the cost of rental housing and food, local weather conditions including air quality and other factors to come up with an interesting list. Here’s the top ten.

CityList

The third edition of the textbook is on the way but maybe a sabbatical in Chiang Mai or Prague for the fourth edition. One advantage of Prague is that from there it’s easy to get to anywhere else in Europe, Chiang Mai is more restricted and the Philippines even more so. Either way, however, these would be good places to write about purchasing power parity, assuming it hasn’t kicked in by then.

Swiss reject single payer health care

by  Tyler Cowen in

Swiss voters on Sunday rejected a plan to ditch the country’s all-private health insurance system and create a state-run scheme, exit polls showed.

Some 64 percent of the electorate shot down a plan pushed by left-leaning parties who say the current system is busting the budgets of ordinary residents, figures from polling agency gfs.bern showed.

Going public would have been a seismic shift for a country whose health system is often hailed abroad as a model of efficiency, but is a growing source of frustration at home because of soaring costs.

“Over the past 20 years in Switzerland, health costs have grown 80 percent and insurance premiums 125 percent,” ophthalmologist Michel Matter told AFP.

There is more here, and for the pointer I thank Samir Varma.

Chores down, child care up

by  Tyler Cowen in

There is evidence that technology has already made household chores much less time-consuming. Parents together now spend 27.6 hours a week on chores, down from 36.3 in 1965, according to data from the American Time Use Survey and Pew Research Center. Some of their new free time is being spent on their children. They spend 20.8 hours a week on child care, up from 12.7 in 1965.

That is from Claire Cain Miller, most of the piece is about the economies of paying people to ship your goods for you.

What it is like to be struck by lightning

by  Tyler Cowen in

To some survivors, these more outlandish claims only serve to reinforce the idea that their very real issues are suspect, too. “I have met people who say they have been struck three times and say the can see the future, play the piano, fuck all night long,” says Utley. “It’s all bullshit.”

Utley’s own case is not so fortunate:

After leaving the hospital, Utley spent months relearning to swallow, move his fingers, and walk. Rehab was just the first chapter of his ordeal, however. In his previous life, Utley was a successful stockbroker who often went skiing and windsurfing. Today, at 62, he lives on disability insurance in Cape Cod. “I don’t work,” he says. “I can’t work. My memory’s fried, and I don’t have energy like I used to. I aged 30 years in a second. I walk and talk and play golf—but I still fall down. I’m in pain most of the time. I can’t walk 100 yards without stopping. I look like a drunk.”

There is much more here, by Ferris Jabr, interesting throughout, hat tip goes to Vic Sarjoo.

Scott Sumner on demand-side secular stagnation

by  Tyler Cowen in

It seems to me that the Krugman/Summers view has three big problems:

1. The standard textbook model says demand shocks have cyclical effects, and that after wages and prices adjust the economy self-corrects back to the natural rate after a few years. Even if it takes 10 years, it would not explain the longer-term stagnation that they believe is occurring.

2. Krugman might respond to the first point by saying we should dump the new Keynesian model and go back to the old Keynesian unemployment equilibrium model. But even that won’t work, as the old Keynesian model used unemployment as the mechanism for the transmission of demand shocks to low output. If you showed Keynes the US unemployment data since 2009, with the unemployment rate dropping from 10% to 6.1%, he would have assumed that we had had fast growth. If you then told him RGDP growth had averaged just over 2%, he would have had no explanation. That’s a supply-side problem. And it’s even worse in Britain, where job growth has been stronger than in the US, and RGDP growth has been weaker. The eurozone also suffers from this problem.

The truth is that we have three problems:

1. A demand-side (unemployment) problem that was severe in 2009, and (in the US) has been gradually improving since.

2. Slow growth in the working-age population.

3. Supply-side problems ranging from increasing worker disability to slower productivity growth.

I agree completely, his post is here.  And on labor turnover, don’t forget Alex’s earlier post here.