↳ Future+of+work

August 11th, 2018

↳ Future+of+work

Constellation

ALCHEMIST STOCK

Automation, employment, and capital investment

At his blog STUMBLING AND MUMBLING, CHRIS DILLOW discusses recent reporting on rapid automation fears in the United Kingdom:

"'More than six million workers are worried their jobs could be replaced by machines over the next decade' says the Guardian. This raises a longstanding paradox – that, especially in the UK, the robot economy is much more discussed than observed.

What I mean is that the last few years have seen pretty much the exact opposite of this. Employment has grown nicely whilst capital spending has been sluggish. The ONS says that 'annual growth in gross fixed capital formation has been slowing consistently since 2014.' And the OECD reports that the UK has one of the lowest usages of industrial robots in the western world.

My chart, taken from the Bank of England and ONS, puts this into historic context. It shows that the gap between the growth of the non-dwellings capital stock and employment growth has been lower in recent years than at any time since 1945. The time to worry about machines taking people’s jobs was the 60s and 70s, not today.… If we looked only at the macro data, we’d fear that people are taking robots' jobs – not vice versa."

Link to the post.

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July 7th, 2018

Quodlibet

EVIDENCE PUZZLES

The history and politics of RCTs 

In a 2016 working paper, JUDITH GUERON recounts and evaluates the history of randomized controlled trials (RCTs) in the US, through her own experience in the development of welfare experiments through the MDRC and the HHS: 

“To varying degrees, the proponents of welfare experiments at MDRC and HHS shared three mutually reinforcing goals. The first was to obtain reliable and—given the long and heated controversy about welfare reform—defensible evidence of what worked and, just as importantly, what did not. Over a pivotal ten years from 1975 to 1985, these individuals became convinced that high-quality RCTs were uniquely able to produce such evidence and that there was simply no adequate alternative. Thus, their first challenge was to demonstrate feasibility: that it was ethical, legal, and possible to implement this untried—and at first blush to some people immoral—approach in diverse conditions. The other two goals sprang from their reasons for seeking rigorous evidence. They were not motivated by an abstract interest in methodology or theory; they wanted to inform policy and make government more effective and efficient. As a result, they sought to make the body of studies useful, by assuring that it addressed the most significant questions about policy and practice, and to structure the research and communicate the findings in ways that would increase the potential that they might actually be used." 

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June 30th, 2018

The Duel

CLIMATE PREDICTION MARKET

How to link a carbon tax to climate forecasting

A 2011 paper by SHI-LING HSU suggests a way of using a carbon tax to generate more accurate predictions of future climate conditions:

“The market for tradable permits to emit in the future is essentially a prediction market for climate outcomes. And yet, unlike prediction markets that have been operated or proposed thus far, this prediction market for climate outcomes operates against the backdrop of an actual and substantial tax liability. Whereas prediction markets have heretofore largely involved only recreational trading, this prediction market will operate against a regulatory backdrop and thus will provide much stronger incentives for traders to acquire and trade on information.”

 Link popup: yes to the full paper.

A 2018 paper by GARY LUCAS and FELIX MORMANN suggests using similar predictions for climate policies beyond carbon taxes:

“We explain how both the federal and state governments could use prediction markets to help resolve high-profile controversies, such as how best to allocate subsidies to promote clean technology innovation and which policy strategy promises the greatest reduction in carbon emissions.” 

Link popup: yes to their paper.

  • In 2016, a group of researchers modeled the way that information would converge in a climate prediction market, and found “market participation causes most traders to converge quickly toward believing the ‘true’ climate model, suggesting that a climate market could be useful for building public consensus.” Link popup: yes.
  • Tyler Cowen wrote about Hsu’s paper in 2011: “I think of such fine-tuning as a misguided approach. Is there such a good ‘basket’ measure of climate outcomes with sufficiently low short-term volatility?” Link popup: yes.
  • A 2017 paper by Michael Thicke makes a similar point about prediction models for science generally: “Prediction markets for science could be uninformative or deceptive because scientific predictions are often long-term, while prediction markets perform best for short-term questions.” Link popup: yes.
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March 3rd, 2018

New Fables

IVORY MECHANICS

Regional parochialism and the production of knowledge in universities

"Scholarly understanding of how universities transform money and intellect into knowledge remains limited. At present we have only rudimentary measures of knowledge production's inputs: tuition and fees, government subsidies, philanthropic gifts, and the academic credentials of students and faculty. Output measures are equally coarse: counts of degrees conferred; dissertations, articles and books completed; patents secured; dollars returned on particular inventions. As for the black box of knowledge production in between: very little."

From the introduction to a new book on American social science research that aims to uncover the institutional pathways that produce (and favor) certain areas of research.

It continues:

"The rise of 'global' discourse in the US academy has coevolved with fundamental changes in academic patronage, university prestige systems, and the international political economy. America's great research institutions are now only partly servants of the US nation-state. This fact has very large implications for those who make their careers producing scholarly knowledge."

Link to the introduction.

  • A short interview with co-authors Mitchell L. Stevens and Cynthia Miller-Idris. "Sociology department chairs said frankly that they deliberately steer graduate students away from international study because such projects on non-U.S. topics are less likely to have purchase on the tenure-line job market.… The tenure process is largely mediated by disciplines, and because those disciplines prioritize their own theoretical abstractions, contextual knowledge loses out." Link.
  • A paper examines previous attempts to map the parochialism of a discipline, finding that “conventional measures based on nation-state affiliation capture only part of the spatial structures of inequality.” Employed therein: novel visualizations and mapping the social network structures of authorship and citation. Link. Relatedly, a September 2017 post by Samuel Moyn on parochialism in international law. Link.
  • And a link we sent last fall, by Michael Kennedy, on interdisciplinarity and global knowledge cultures. Link.
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January 13th, 2018

Landing Place

THE WAGE EFFECT

Higher minimum wages and the EITC may reduce recidivism

“Using administrative prison release records from nearly six million offenders released between 2000 and 2014, we use a difference-in-differences strategy to identify the effect of over two hundred state and federal minimum wage increases, as well as 21 state EITC programs, on recidivism. We find that the average minimum wage increase of 8% reduces the probability that men and women return to prison within 1 year by 2%. This implies that on average the wage effect, drawing at least some ex-offenders into the legal labor market, dominates any reduced employment in this population due to the minimum wage.”

Full paper by AMANDA Y. AGAN and MICHAEL D. MAKOWSKY here.

  • Jennifer Doleac responds, “The results in this new paper…definitely surprised me—my prior was that raising the min wage would increase recidivism.” She explains: “Those coming out of prison are very likely to be on the margin of employment (last hired, first fired). Given some disemployment effects, marginal workers are the ones who are going to be hurt. Amanda and Mike find that the positive effects of pulling some (higher-skilled?) offenders into the legal labor market outweigh those negative effects.” Link to Doleac’s Twitter thread.
  • One of the co-authors, Makowsky, adds, “The EITC, dollar for household dollar, generates larger effects [than minimum wage increases], but is hampered by its contingency on dependent children. This is one more reason to remove the contingency, extending it to everyone.” Link to Makowsky’s Twitter thread.
  • Another piece sourced from Makowsky’s thread: “The Impact of Living-Wage Ordinances on Urban Crime.” “Using data on annual crime rates for large cities in the United States, we find that living-wage ordinances are associated with notable reductions in property-related crime and no discernable impact on nonproperty crimes.” Link.
  • Noah Smith rounds up recent studies on increasing the minimum wage, many of which come to contradictory conclusions. "At this point, anyone following the research debate will be tempted to throw up their hands. What can we learn from a bunch of contradictory studies, each with its own potential weaknesses and flaws?" Link.
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January 6th, 2018

Anonymous Power Game

THE YEAR IN ECONOMICS

Nominations from top economists, including selections by Raj Chetty, Sendhil Mullainathan, and Angus Deaton

One favorite from this excellent round-up is by Hulten and Nakamura on metrics, selected by Diane Coyle (we previously sent her Indigo Prize paper):

Accounting for Growth in the Age of the Internet: The Importance of Output-Saving Technical Change by Charles Hulten and Leonard Nakamura

Main finding: Living standards may be growing faster than GDP growth.
Nominating economist: Diane Coyle, University of Manchester
Specialization: Economic statistics and the digital economy
Why?: “This paper tries to formalize the intuition that there is a growing gap between the standard measure of GDP, capturing economic activity, and true economic welfare and to draw out some of the implications.”

Robert Allen's "Absolute Poverty: When Necessity Displaces Desire" is another metrics-related piece on the list.

Also noteworthy, on the future of work:

Valuing Alternative Work Arrangements by Alexandre Mas and Amanda Pallais

Main finding: The average worker does not value an Uber-like ability to set their own schedule.
Nominating economist: Emily Oster, Brown University
Specialization: Health economics and research methodology
Why? “This paper looks at a question increasingly important in the current labor market: How do people value flexible work arrangements? The authors have an incredibly neat approach, using actual worker hiring to generate causal estimates of how workers value various employment setups.”

Full piece by DAN KOPF here.

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