Learning about long-term effects of interventions, and designing interventions to facilitate the long view
A new paper from the Center for Effective Global Action at Berkeley surveys a topic important to our researchers here at JFI: the question of long-run effects of interventions. In our literature review of cash transfer studies, we identified the need for more work beyond the bounds of a short-term randomized controlled trial. This is especially crucial for basic income, which is among those policies intended to be permanent.
The authors of the new Berkeley report, Adrien Bouguen, Yue Huang, Michael Kremer, and Edward Miguel, note that it’s a particularly apt moment for this kind of work: “Given the large numbers of RCTs launched in the 2000’s, every year that goes by means that more and more RCT studies are ‘aging into’ a phase where the assessment of long-run impacts becomes possible.”
The report includes a summary of what we know about long-run impacts so far:
"Section 2 summarizes and evaluates the growing body of evidence from RCTs on the long-term impacts of international development interventions, and find most (though not all) provide evidence for positive and meaningful effects on individual economic productivity and living standards. Most of these studies examine existing cash transfer, child health, or education interventions, and shed light on important theoretical questions such as the existence of poverty traps (Bandiera et al., 2018) and returns to human capital investments in the long term."
Also notable is the last section, which contains considerations for study design, "lessons from our experience in conducting long-term tracking studies, as well as innovative data approaches." Link to the full paper.
- In his paper "When are Cash Transfers Transformative?," Bruce Wydick also notes the need for long-run analysis: "Whether or not these positive impacts have long-term transformative effects—and under what conditions—is a question that is less settled and remains an active subject of research." The rest of the paper is of interest as well, including Wydick's five factors that tend to signal that a cash transfer will be transformative. Link.
- For more on the rising popularity of RCTs, a 2016 paper by major RCT influencers Banerjee, Duflo, and Kremer quantifies that growth and discusses the impact of RCTs. Link. Here’s the PowerPoint version of that paper. David McKenzie at the World Bank responds to the paper, disputing some of its claims. Link.
New Researchers: CRIME BOOM
Understanding why local crime may increase during an economic boom
In a fascinating new job market paper, Texas A&M Phd candidate BRITTANY STREET examines the puzzling incidents where crime increases in response to economic prosperity. To properly analyze these black swan cases, Street isolates "the effect of local economic opportunity from the effect of changing composition due to in-migration" during periods of economic boom. Street uses the recent boom in hydraulic fracturing in North Dakota as a case study and finds that "economic expansion leads to a 22 percent reduction in criminal cases."
"Local residents engage in less criminal activity at the start of the boom with a smaller effect in later years. Effects are largest and most robust for drug offenses, and are shown across all counties with fracking activity. Results suggest that residents reduce their criminal activity in response to improved job opportunities, but that other changes from local economic shocks, such as peer composition, seem to reduce this effect. This is consistent with economic opportunities reducing crime and highlights the role of compositional changes on the aggregate effects on crime."
In this new section of the JFI Letter, we will be highlighting great work from a graduate student each week. Have you read any excellent student work recently that you'd like to see shared here? Send it our way: firstname.lastname@example.org.
- New on the Phenomenal World, a post on "Why Rational People Polarize" by Kevin Dorst, a PhD candidate in philosophy at MIT. "The informational choices that drive polarization are not irrational or suboptimal. Polarization is a structural problem. It arises because people are exquisitely sensitive to the informational problems they face—because they are smart. The solution doesn't require educating them; it requires altering the choices they face." Link.
- JFI research fellow and MIT Philosophy postdoctoral associate Abby Everett Jaques inaugurated a new course on the "Ethics of Technology" within MIT's department of Linguistics & Philosophy. The course aims to "integrate ethical thinking within engineering practice" and to teach engineering students "an ethics protocol that they can apply to projects of their own." Link.
- "Economists were winning Nobel prizes for their studies of how and why markets fail, psychology was being integrated back into economics, and yet students weren’t being taught much of that.” Esche Nelson writes in Quartz about the CORE Econ textbook. Link to the article, link to CORE's website.
- From Robert Dur and Max van Lent, a big new study on "socially useless jobs": "We use a representative dataset comprising 100,000 workers from 47 countries at four points in time. We find that approximately 8% of workers perceive their job as socially useless, while another 17% are doubtful about the usefulness of their job." Link.
- Finland is teaching 1% of its population the basics of AI, "to raise awareness about the opportunities and risks of AI among people who are strangers to computer science, so they can decide for themselves what's beneficial and where they want their government to invest." Story in Politico here. Online course here.
- A compilation of 2018's best data visualizations, from Maarten Lambrechts. Link.
- On Twitter, Marshall Steinbaum recommends the 1889 book "Monopolies and the People": "That guy understood how the economy works as well as anyone since, and far better than most." Link to the full free text on Google Books.
- Almost six months after the cancellation of the Ontario Basic Income Pilot, the Hamilton Roundtable for Poverty Reduction released the pilot's baseline survey. The survey reveals "that participants were hoping to break the cycle of poverty and enhance employment opportunities, stabilize their housing, eat healthier and improve their health." Link. ht Lauren
- A new study on minimum wages from Doruk Cengiz, Arindrajit Dube, et al, summarized on Twitter by Dube: "Little effect on jobs from US min wage hikes to date; sizable wage effects include spillovers." Link to the NBER paper, link to the ungated version.
- "Google Maps for Ancient Rome": The Stanford Classics department recently launched ORBIS, a new geospatial network model of the Roman world, which accurately "reconstructs the time cost and financial expense associate with a wide range of different types of travel in antiquity." Link. ht Kapu