We at Planet Money are continually studying the work of economists and different social scientists to glean concepts, proof and insights in regards to the economic system, and, extra typically, the complicated world round us. Typically this work gives the seeds for episodes or newsletters. However typically they’re simply fascinating issues we realized privately, and we do not do a lot with them.
Effectively, immediately, we’re gonna attempt to change that. Welcome to the inaugural installment of the Planet Cash Econ Roundup! Listed here are 5 current papers that lit up our brains and are possibly value looking at.
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“Minimal Wages and Office Accidents”
by Michael Davies, R. Jisung Park, and Anna Stansbury
These economists analyze information from California employee compensation claims between 2000 and 2019, and so they look to see if there may be any impact of accelerating the minimal wage on office accidents. They discover one. And a slightly giant one. “We discover {that a} 10% enhance within the minimal wage will increase the damage fee by 11% in an occupation-metro space labor market which is absolutely uncovered to the minimal wage enhance.” That is proper, when the minimal wage goes up, so do office accidents. Yikes. However why? Davies, Park, and Stansbury discover that these office accidents replicate “cumulative bodily pressure, suggesting that employers reply to minimal wage will increase by intensifying the tempo of labor, which in flip will increase damage danger.” This paper’s findings are fairly surprising, and we can be wanting down the highway to see if different economists can replicate them. Link to paper
“Technological Disruption within the Labor Market”
by David J. Deming, Christopher Ong, and Lawrence H. Summers
Clearly, there’s a huge worry proper now that synthetic intelligence will kill a bunch of jobs. We do not know what is going on to occur. However we will possibly be taught from the previous.
The three economists, one in every of whom is a former US Treasury Secretary (Larry Summers), undergo historical past — all the best way again to 1880 — and estimate how new applied sciences modified what individuals do for work. So, for instance, how the invention of the auto could have killed horse-and-buggy jobs and created jobs in factories manufacturing vehicles.
The economists discover that probably the most disruptive intervals for occupational change was between 1940 and 1970, “when agricultural employment was nonetheless disappearing, guide labor was shifting into manufacturing and away from railroads, and clerical and administrative work have been rising quickly.”
One in all their most fascinating findings is that the least disruptive interval was slightly lately. “The years spanning 1990 to 2017 have been essentially the most steady interval within the historical past of the US labor market, going again practically 150 years.” That is possibly shocking as a result of that was an period once we noticed the unfold of the non-public laptop, the rise of the Web, and the arrival of the smartphone. The research means that, relative to earlier technological waves, these applied sciences did not do as a lot to alter what People do for a dwelling.
Nonetheless, since 2017, the economists discover, we have began seeing an uptick in occupational change.
First, they discover that high-paid employment has grown whereas low- and middle-paid employment has declined as a proportion of complete workforce. Possibly excellent news?
Second, and associated to the earlier discovering, the economists discover that “employment progress has stalled in low-paid service jobs.”
Third, they discover an enormous enhance in individuals working in science, know-how, engineering, and math-related jobs. “The share of employment in STEM jobs has elevated by greater than 50 % since 2010, fueled by progress in software program and computer-related occupations,” they write.
Lastly, they discover that “retail gross sales employment has declined by 25 % within the final decade, possible due to technological enhancements in on-line retail.” They hypothesize that possibly this has to do with the arrival of synthetic intelligence. “Whereas giant language fashions (LLMs) like ChatGPT are too new for us but to see any direct affect on the labor market, firms have been utilizing predictive AI to optimize enterprise operations since a minimum of the mid-2010s. On-line retailers like Amazon use AI to personalize costs and product suggestions and to handle stock extra effectively, outcompeting big-box retail.” After all, the pandemic had an impact right here too.
Trying ahead, the economists recommend that occupational change will possible proceed at a comparatively quick tempo (in comparison with the 1990-2017 interval) as Generative AI and different new applied sciences change the labor market. Link to paper
“Infants and the Macroeconomy”
by Claudia Goldin
International locations world wide have seen a jaw-dropping decline in fertility charges. On this paper, Claudia Goldin, the 2023 winner of the Nobel Prize in financial sciences, gives a brand new concept to assist clarify why (hearken to The Indicator’s conversation with her back in 2021). Goldin begins by offering a superb abstract of the economics literature on this topic, which factors to causes like the arrival of contraception drugs and contraceptives. Goldin provides one other issue into the combination to clarify why some nations have seen a extra precipitous decline in beginning charges and others have solely seen slower declines: the velocity of financial progress.
Goldin hypothesizes that nations that skilled speedy financial progress within the Sixties and Nineteen Seventies — like Greece, Italy, Japan, Korea, Portugal, and Spain — noticed larger and sooner declines in fertility due to the best way speedy financial progress catapulted them into modernity and upset conventional gender roles. Principally, ladies go into the workforce, and that adjustments their wishes to have plenty of youngsters as a result of now they’re extra centered on their careers. And that change particularly creates battle between the genders in societies that simply beforehand have been extra agricultural and had old school gender roles.
“Fast financial progress has given ladies better freedoms,” Goldin writes. “However speedy financial change could result in conflicts of varied varieties when males are extra swayed by traditions. What ladies require of males’s time to boost a household and be members of a contemporary labor market could exceed the time their extra tradition-bound spouses, or future spouses, are keen to supply. Family and caring duties in such societies are largely ladies’s obligations.”
In societies that have extra sluggish and regular financial progress, Goldin suggests, this alteration is much less sudden and women and men can extra slowly work out a deal the place they share extra of the child-rearing obligations. Which will assist hold the fertility fee from falling as a lot. Link to paper
“Gun Coverage and the Metal Paradox: Proof from Oregonians”
by Katie Bollman, Benjamin Hansen, Edward A. Rubin & Garrett O. Stanford
This group of economists take a look at how a poll initiative in Oregon for extra gun management affected demand for weapons within the state. They discover that the poll initiative, Measure 114, led many Oregonians to purchase weapons and ammo like loopy. “Background checks, a proxy for demand, rose 13.9% in anticipation of the referendum and surged 157% instantly following the election,” the economists write. “After judicial intervention halted the legislation’s enactment, demand returned close to pre-election ranges.” The economists conclude that their research “underscores the paradoxical impact of gun-control insurance policies, providing a cautionary lesson to policymakers.” Link to paper
“The Gilded Age and Past: The Persistence of Elite Wealth in American Historical past”
by Priti Kalsi and Zachary Ward
These economists take a look at wealth dynamics of the richest of the wealthy People through the late nineteenth and early twentieth centuries. They discover that the richest of the wealthy are likely to drop in wealth rankings, so they do not keep on the prime. Nonetheless, they do discover a relationship between their wealth and the chance that their grandkids are within the prime 1%. Having a “wealthy grandparent exponentially will increase the chance of reaching the highest 1%. Nonetheless, over 90% of the grandchildren of prime 1% wealth grandfathers didn’t obtain that degree.” In different phrases, having tremendous wealthy grandparents boosts the chance that you simply’re tremendous wealthy, nevertheless it’s no assure. Link to paper
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