Spending And Education Over Time

HT: Andrew J. Coulson

How Mexican Drug Homicides Are Good For Business

From yesterday’s Wall Street Journal:

The violence in Mexico has provided an unexpected economic boost to El Paso, a city of more than 600,000 residents at the westernmost tip of Texas. The unemployment rate here was 9.8% in September, equal to the national average but far lower than in other border towns such as Brownsville and McAllen.

Cindy Ramos-Davidson, chief executive of the El Paso Hispanic Chamber of Commerce, said her staff was swamped with requests from Juárez businesspeople wanting to settle in El Paso. They started more than 200 companies in the 12 months ended July 31, a 40% jump from the same period last year.

“It’s the largest migration of wealthy Mexican nationals [to El Paso] since the Mexican Revolution,” said Beto O’Rourke, an El Paso city councilman, referring to the decadelong rebellion that began in 1910. …

The number of murders in Juárez exploded in the spring of 2008 and grew to more than 300 a month by August and September 2009, the highest monthly levels in a particularlyviolent year.

HT: Noam Scheiber

Academic income (in)equality

From Philip Altbach, Director of the Center for International Higher Education:

“Salary progression”—the difference in salary between junior and senior professors—in general appears modest compared to the situation in the professions outside academe. According to our research, for most of the 15 countries in the study, salaries seldom doubled between entry level and senior ranks. The major industrialized countries (including Germany, France, Canada, the United States, and the United Kingdom) stood at the bottom, in terms of variations between junior and senior ranks, and the developing countries (such as China, South Africa, Argentina, and others) at the top. India ranks poorly on both progression and on basic salary. The lack of possibilities for improved salaries is a problem for the profession in general, but it is particularly damaging for the most productive academics. The latter are the most likely to leave academe or to go to countries with higher salaries.

Interesting fact on the African informal sector

From the World Bank’s PSD Blog:

Data on informal firms in Ivory Coast, Madagascar and Mauritius show that these firms are larger in terms of total sales and also generate more output per worker. They rely less on physical infrastructure and machines, but more on human capital of the manager. The latter is especially true in smaller cities and among male-owned and those that were started because the owner could not find a satisfactory job.

Quote of the Day

“There is no moral argument that justifies using the coercive powers of government to force one person to bear the expense of taking care of another. If that person is too resolute in his refusal to do so, what is the case for imposing fines, imprisonment or death? You say, ‘Death! Aren’t you exaggerating, Williams?’ Say he tells the agents of Congress that he’ll pay his share of the constitutionally mandated functions of government but refuse to pay the health costs of a sick obese person or a cyclist who becomes a vegetable, what do you think the likely course of events will be? First, he’d be threatened with fines, imprisonment or property confiscation. Refusal to give in to these government sanctions would ultimately lead to his being shot by the agents of Congress.”

~ Walter E. Williams

Conservatives Maintain Edge as Top Ideological Group

From Gallup:

Conservatives continue to outnumber moderates and liberals in the American populace in 2009, confirming a finding that Gallup first noted in June. Forty percent of Americans describe their political views as conservative, 36% as moderate, and 20% as liberal. This marks a shift from 2005 through 2008, when moderates were tied with conservatives as the most prevalent group.

Here are some key findings:

• Perceptions that there is too much government regulation of business and industry jumped from 38% in September 2008 to 45% in September 2009.
• The percentage of Americans saying they would like to see labor unions have less influence in the country rose from 32% in August 2008 to a record-high 42% in August 2009.
• Public support for keeping the laws governing the sale of firearms the same or making them less strict rose from 49% in October 2008 to 55% in October 2009, also a record high. (The percentage saying the laws should become more strict — the traditionally liberal position — fell from 49% to 44%.)

Russia: The consequence of taxing beer

From the Economist:

The average Russian already drinks 30 litres of hard liquor a year, six times the amount in the EU, while imbibing a modest 77 litres of beer, a little less than a typical European. Pushing up beer prices is far more likely to encourage drinkers to swallow even more vodka or dodgy but cheap home-made spirits than to convince them to give up booze altogether. Then again, it will give Russia’s huge—and largely locally owned—vodka industry reason to raise a glass.

So I pose the question: Is this an intended or unintended consequence? If they seek to curb alcohol consumption, Russia could tax all alcohol, not strictly beer. If they seek to curb substitutes to vodka, which is largely Russian-owned, then they have applied the correct policy.

Analyzing the Extent and Influence of Occupational Licensing on the Labor Market

In their new paper, Morris M. Kleiner and Alan B. Krueger (NBER) analyze the extent and influence of occupational licensing on the labor market. Not surprisingly, the authors find that licensing pushes wages up:

This study examines the extent and influence of occupational licensing in the U.S. using a specially designed national labor force survey. Specifically, we provide new ways of measuring occupational licensing and consider what types of regulatory requirements and what level of government oversight contribute to wage gains and variability. Estimates from the survey indicated that 35 percent of employees were either licensed or certified by the government, and that 29 percent were fully licensed. Another 3 percent stated that all who worked in their job would eventually be required to be certified or licensed, bringing the total that are or eventually must be licensed or certified by government to 38 percent. We find that licensing is associated with about 14 percent higher wages, but the effect of governmental certification on pay is much smaller. Licensing by multiple political jurisdictions is associated with the highest wage gains relative to only local licensing. Specific requirements by the government for a worker to enter an occupation, such as education level and long internships, are positively associated with wages. We find little association between licensing and the variance of wages, in contrast to unions. Overall, our results show that occupational licensing is an important labor market phenomenon that can be measured in labor force surveys.

Since licensing restricts supply (employees) without an altered demand, the price (wage) of the product (licensed employee) subsequently increases.

How an Insurance Mandate Could Leave Many Worse Off

Tyler Cowen explains.

How to flip a coin

Chris Blattman writes:

Using a high-speed camera that photographed people flipping coins, the three researchers determined that a coin is more likely to land facing the same side on which it started. If tails is facing up when the coin is perched on your thumb, it is more likely to land tails up.

How much more likely? At least 51 percent of the time, the researchers claim, and possibly as much as 55 percent to 60 percent — depending on the flipping motion of the individual.

The original research is here.

HT: Marginal Revolution