Teen mothers and the success of their kids

Grandparents, Moms, or Dads? Why Children of Teen Mothers Do Worse in Life
by Anna Aizer, Paul J. Devereux, Kjell G. Salvanes – #25165 (CH ED HE LS)


Women who give birth as teens have worse subsequent educational and labor market outcomes than women who have first births at older ages. However, previous research has attributed much of these effects to selection rather than a causal effect of teen childbearing. Despite this, there are still reasons to believe that children of teen mothers may do worse as their mothers may be less mature, have fewer financial resources when the child is young, and may partner with fathers of lower quality. Using Norwegian register data, we compare outcomes of children of sisters who have first births at different ages. Our evidence suggests that the causal effect of being a child of a teen mother is much smaller than that implied by the cross-sectional differences but that there are still significant long-term, adverse consequences, especially for children born to the youngest teen mothers. Unlike previous research, we have information on fathers and find that negative selection of fathers of children born to teen mothers plays an important role in producing inferior child outcomes. These effects are particularly large for mothers from higher socio-economic groups.

Posted in Economics and public policy, Education, Employment, Life | 3 Comments

The China-US cold war commences! Was Turnbull the first victim?

As I predicted a few months ago, the US security apparatus is going after China relentlessly, mainly in order to have something to do. As I predicted in 2012, Australia is firmly behind the US and the wider Western alliance that will eventually form a block against China.

The main reason the new cold war was inevitable is that the Americans have been used to being top dog in the world and the reality is now that they are the second economy in the world, well behind China in trade, but also in manufacturing and, increasingly, R&D. The Americans are a proud people with the world’s most powerful army and security apparatus so of course they were going to try and compete at some point. They have just entered the denial stage that they in fact are less important than the Chinese, so there’s a long way to go before they calm down.

What is amazing is how long it took for the Americans to go after China. Basically it is far too late now to stop China’s rise. 20 years too late. It makes it a bit of a rearguard action that is thus probably limited in scope. China has in a way been extremely fortunate that the US was occupied with its war on terror and other relatively minor adversaries because the Chinese economy meanwhile modernised and outgrew that of the US.

The immediate causes are varied and can be gleamed from the speech by the US Vice-president that announced the new cold war. Pence basically accuses the Chinese of meddling in other countries’ affairs, which is probably true but no different from what any other major power does. Indeed, the Chinese have cause to interfere with the US, at least in their eyes: the Chinese leadership was truly rocked by several New York Times articles on the financial affairs of the top Chinese leaders, something that was of great personal importance to those leaders. The West underestimates just how crucial ‘face’ is in Chinese culture and how the Chinese leaders will have ascribed those articles to the US administration rather than merely to journalists. Those articles will have prompted a whole machinery to gear up to try to disrupt the NYT, US politicians, and Western opinion on China in general. Continue reading

Posted in Cultural Critique, History, Media, Politics - international, Politics - national, Society | 5 Comments

Results of equal opportunity programs that will MAKE YOU GASP!!

Image result for LINKBAITDo Equal Employment Opportunity Statements Backfire? Evidence From A Natural Field Experiment On Job-Entry Decisions
by Andreas Leibbrandt, John A. List – #25035 (LE LS)

Labor force composition and the allocation of talent remain of
vital import to modern economies. For their part, governments
and companies around the globe have implemented equal employment
opportunity (EEO) regulations to influence labor market flows.
Even though such regulations are pervasive, surprisingly little
is known about their impacts. We use a natural field experiment
conducted across 10 U.S. cities to investigate if EEO statements
in job advertisements affect the first step in the employment
process, application rates. Making use of data from nearly 2,500
job seekers, we find considerable policy effects, but in an
unexpected direction: the presence of an EEO statement dampens
rather than encourages racial minorities’ willingness to apply
for jobs. Importantly, the effects are particularly pronounced
for educated job seekers and in cities with white majority
populations. Complementary survey evidence suggests the
underlying mechanism at work is “tokenism”, revealing that EEO
statements backfire because racial minorities avoid environments
in which they are perceived as regulatory, or symbolic, hires
rather than being hired on their own merits. Beyond their
practical and theoretical importance, our results highlight how
field experiments can significantly improve policymaking. In
this case, if one goal of EEO regulations is to enhance the pool
of minority applicants, then it is not working.

Posted in Gender | 1 Comment

Peer learning and financial education

Peer Advice on Financial Decisions: A case of the blind leading the blind?
by Sandro Ambuehl, B. Douglas Bernheim, Fulya Ersoy, Donna Harris – #25034 (PE)

Previous research shows that many people seek financial advice
from non-experts, and that peer interactions influence financial
decisions. We investigate whether such influences are
beneficial, harmful, or simply haphazard. In our laboratory
experiment, face-to-face communication with a randomly assigned
peer significantly improves the quality of private decisions,
measured by subjects’ ability to choose as if they properly
understand their opportunity sets. Subjects do not merely mimic
those who know better, but also make better private decisions in
novel tasks. People with low financial competence experience
greater improvements when their partners also exhibit low
financial competence. Hence, peer-to-peer communication
transmits financial decision-making skills most effectively when
peers are equally uninformed, rather than when an informed
decision maker teaches an uninformed peer. Qualitative analysis
of subjects’ discussions supports this interpretation. The
provision of effective financial education to one member of a
pair influences the nature of communication but does not lead to
additional improvements in the quality of the untreated partner’s
decisions, particularly in novel tasks.

Posted in Uncategorized | 2 Comments

Imagine if policy makers understood what Nancy Cartwright says here, rather than thinking that the elements of evidence-based policy are self-evident

Posted in Economics and public policy | 2 Comments

Me at the Australian Institute of Family Studies

The AIFS puts on a mean Annual Conference. They fussed over us speakers trying to make sure we weren’t just a bunch of talking heads. I would have liked to have attended more of it, but had another conference at which I had pontification duties at the same time.

In any event, I participated in two very well ‘curated’ (as we say these days) panels, one lasting two hours – yes, that’s right. My opening statement to this panel is above, and the whole thing, should you wish to check it out is below. It was a great panel. And below it is a forty minute panel I was on which discussed families, behavioural economics and nudges more generally. That was just me and Sam Hannah-Rankin who seems, at least from the outside, to be doing a good job of running her innovation unit in DPC.

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The decline and fall of Australian economics

Image result for economicsI reproduce here a fine review of what seems like a fine book. I’m not buying the book because of the outrageous price the academic publishers are charging. It’s an interesting story of practical contribution – economics as clarified policy commonsense as I like to think of it. But, along with so much else, it’s been swept away by the new philistinism managerialism. Academics are hitting their KPIs, filling in their forms, but making original contributions to Australian policy problems? Not so much.

It reminds me of something Tom Fitzgerald said in his Boyer Lectures a long time ago:

What is inspiring . . . is the example of Australian economists who arrived at independent conclusions contrary to the world orthodoxy, who invited criticism from the most eminent upholders of that orthodoxy, and, on being rejected, put their argument in an international forum, to gain ultimately a large measure of acceptance for their initial heresy.  Today they are far better remembered and admired by an eminent American economist, the Nobel Prize winner Paul Samuelson, than by any Australian counterparts.  . . .  Professor Samuelson has recently referred to them as ‘my-down-under-heroes’

If this beautiful, elegiac book does not move you to be proud to be an Australian or New Zealand economist then I fear you may need a heart transplant. A delicious little morsel at just over 250 pages, Alex Millmow’s A History of Australasian Economic Thought still manages to convey a distinct sense of what was a diverse but definably unique branch of economic thought in Australia and New Zealand. I commend Professor Millmow for this volume and recommend it highly.

The general problem with the history of economic thought, it seems to me (I am not a historian of economic thought), is the same as with all academic history. So involved in rooting out details of specific episodes and figures, it can be intimidating and apparently unnavigable for the generalist. Millmow’s book is a splendid corrective for this problem as regards the history of economic thought in Australia and New Zealand. It touches lightly on the various episodes in this history but with sufficient depth to give the reader a real appreciation for it, and sufficient orientation to it and the body of literature around it for the reader to seek deeper knowledge if they wish. Continue reading

Posted in Uncategorized | 1 Comment