Tag: Justin Wolfers

Economists and manifestos

I’ve had a few conversations over the past few weeks about how extremely long the academic publishing cycle is, particularly for economists. Combined with the lack of cohesive response to the financial crisis and 2010’s crisis of conscience at the AEA meetings regarding disclosure of funding sources, economists aren’t looking so good at the moment.

To address at least one of these concerns, a group of economists has put together a Manifesto for Economic Sense, which essentially calls on the fiscal and monetary policy-making bodies of the United States and Europe to kick things into high gear in order to end  “massive suffering” being inflicted. A rather impressive list of economists has signed it and though I wouldn’t call it beautiful prose (we’re economists after all), I’m a fan.

In short: The economy is suffering from lack of demand–companies aren’t borrowing or hiring, people don’t have jobs and thus aren’t buying things, which becomes more and more problematic (one person’s spending is another person’s income). Monetary policy is exhausted and fiscal policy is politically motivated and crappy, so let’s agree to focus on facts and push for credible, reasonable economic policy that will promote job growth, confidence and resilience. Sounds good to me.

h/t @JustinWolfers (Again, I don’t do everything he tells me to do!)

Betsey Stevenson and Justin Wolfers on why we study families

I’m often asked why my research is economics and not sociology. Justin Wolfers and Betsey Stevenson give one answer as part of a longer Q&A on their research:

Your other areas of research focus include marriage, divorce, and family. Why would these areas interest economists? Or business leaders?

Dr. Stevenson: Economics is about how people make decisions optimally, given that they’re facing constraints. That framework can be applied anywhere, not just to things that are about dollars and cents and the economy. Families and labor markets are intimately connected, and to understand one, it’s helpful to understand the other. That’s because decisions about labor force participation and about what kinds of jobs to take and what kind of hours to keep are made within the context of family lives. What happens in families affects the way people make those kinds of decisions. And what happens in labor markets affects the decisions people make about families. Economists are also interested in families because we have come to realize that there are many parallels between family and labor markets.

Dr. Wolfers: The first place that people notice the similarities between family and economics is in what some have called the marriage market, which looks a whole lot like the labor market. People search for partners the same way they search for jobs. When you find a spouse or a job that looks like a good fit, you take it. And you must make a decision about how much time to spend searching for the perfect spouse or the perfect job before accepting a job or a spouse.

Related Content:

  1. Anticipating Divorce
  2. For Valentine’s Day, on Love and Marriage and Economics

It’s not that I do everything Justin Wolfers tells me to do…

But I did find this fun. On the Freakonomics blog today Justin Wolfers uses the 1940 census–which was just scanned and all put online–to find who was living in his house in 1940. I’ve spent quite a bit of time with other US Census records from earlier years. At one point, while taking economic history in graduate school, I found my grandfather and his parents and theirs in Georgia and North Carolina in the 1930, 1920, and 1910 records. I didn’t actually need these things for class; I was supposed to be looking for saloon-hall dancers and prostitutes in the 1860s Colorado mining towns, but that’s a blog post for another day.

I’m in the process of searching for my great grandparents in the 1940 census, as I know they moved around quite a bit after the crash, and my grandfather had already left home by 1940, but I did look at my current address in the Pennsylvania records ala Wolfers. The plaque outside my house in Gettysburg says it was built by a doctor who served in the Civil War and stuck around after it was over. By 1940, however, the house belonged to Helen Culp, a 52-year old single schoolteacher who finished college, and her sister, Margaret, a 37-year old department store employee, who finished high school. Though entirely coincidental, it feels appropriate that I should spend my time in Gettysburg in an educated, female teacher’s house. Helen and Margaret were white, their parents were born in Pennsylvania just as they were, and they grew up speaking English at home*. Helen earned $1400 in 1939 and her sister, $700. Helen’s salary is worth about $22,000 in 2010 dollars if we use Purchasing Power Parity calculations, but could have represented a lot more if we measure it by ‘prestige’ or ‘economic power’. If you haven’t used www.eh.net‘s “How Much is That” tool, you should; it’s super fun.

Helen said the value of her house was $5000. This is almost three years’ salary for her, which tells me that either she was paid very well for the time, or that houses were much cheaper in Gettysburg in 1940. I’m fairly certain I could not purchase my house with three years’ salary (although, Helen, at 52, had likely been teaching for much longer than I have). Currently, houses in Gettysburg are pretty expensive, at least compared to surrounding areas, primarily due to historical value, laws governing historical buildings and their preservation or destruction, and limits on building height and density.

This particular exercise amuses me because I’ve never actually lived in a house that was old enough to be in any of these records. Even in Boulder, CO, which is a fairly old town for the Western US, none of the places I lived was more than 40 or 50 years old. And now, I live in a house that is 145 years old. As an American from a relatively recently populated part of the country, I think all this old stuff is so interesting. It’s how I felt in Boston, too; history just seems to weigh heavier.

I only skimmed the pages before I found my address, but in looking at all the people who lived on my street and neighboring ones, I’m also struck by how little migration there is in and out of Adams County. Most people on the page lived in the same place 5 years before. If they didn’t, they came from New Oxford and Ortanna and Cashtown, towns that are within 7-10 miles of Gettysburg. This internal migration map of the US in 2011 shows that not much has changed. Like the 1940 inhabitants of my house and their neighbors, people don’t really move to, or leave Gettysburg, particularly not when compared to Boulder.

Well, except me (and college students).

*Two respondents per page were asked some supplemental questions about their parents, marriage history, and veteran status. Helen happened to be #14 on the page, so she was asked those questions as well. Some of these questions were standard on earlier Censuses, which is part of how I traced my greatgreatgrandparents back to North Carolina.

For Valentine’s Day, on love and marriage and economics

Perhaps I’m hyper aware of things going on in both media and social media these days, but it seems that UPenn economists Justin Wolfers and Betsey Stevenson are everywhere these days. They’re all over my twitter feed for one. Then, today this came out in the Washington Post, and over the weekend, out came a profile in the NYT. The Times article describes them as a ‘power couple’ of economics. Which is pretty funny if you know any economist couples.

Though our research hasn’t come head to head yet, Justin and Betsey do a lot of work in family economics, much like I do. So, their meteoric rise to national prominence (at least among the WaPo-, NYT-reading set, is of interest to me. In particular, someone mentioned a quote from Betsey Stevenson saying that the household problem (as we so lovingly call it in economics) had turned from one of shared production to shared consumption.

Much of the dominant thinking in family and household economics has roots in Gary Becker’s A Treatise on the Family. It rests on ideas that can only politely be called antiquated. Women are in charge of domestic production (cleaning, child-rearing, cooking, laundry, etc) and men are in charge of bringing home the bacon. It’s specialization at the household level. Very economist-y. On some level, it probably made a lot of sense to think about marriage in this manner, particularly when women’s wages were much, much lower than men’s. In fact, it made so much sense that it partly earned Becker a Nobel Prize in Economics.

At some point during my fourth year of graduate school, I ordered my own copy. It was a simple (though really expensive!) purchase. A paperback, just a book, but a book that essentially formed much of the dominant thinking in my field. Even then, I knew its time in the spotlight was waning. I’ve still never read the whole thing. Despite knowing it was a classic, I can still only look up passages when I think they’re relevant. Reading more than a few pages makes the feminist in me absolutely boil.

But someone else recently said that, as economists, we should hope that our research becomes irrelevant, because that means that society has changed or that we’ve developed policy solutions for those questions and problems. And that’s probably what is happening here.

The world is changing; marriage is changing, love is changing. Household production is definitely changing. And perhaps all of this is about household consumption (enjoying kids and raising them together) rather than household production (raising kids, a public good). I’m unsure whether this is true at every socio-economic level, or whether it’s a privilege of high-earners, but it’s certainly an interesting way to frame and model marriage in economic terms.

Happy Valentine’s Day!