Brad DeLong: Worthy reads on equitable growth, July 5-12, 2018

Worthy reads on Equitable Growth:

1. “In a dynamic monopsony model, so-called search frictions—including imperfect information and other constraints to job mobility … would give employers more power to set wages below competitive levels, while still maintaining a sufficient supply of workers,” writes Kate Bahn in “Understanding the importance of monopsony power in the U.S. labor market.” She cites Doug Webber, who “tests the hypothesis of widespread dynamic monopsony and whether search frictions appear to maintain low wages across the U.S. labor market in his 2015 paper, “Firm market power and the earnings distribution.” Webber finds pervasive monopsony across the labor market, with the key finding that less monopsony power would lead to less income inequality.”
2. At the “Work and Family Researchers Network’s latest conference,” Heather Boushey “participated in an “author-meets-readers” event for The Triple Bind of Single-Parent Families: Resources, Employment and Policies to Improve Well-Being, a collection edited by Rense Nieuwenhuis at the University of Stockholm and Laurie C. Maldonado at the Stone Center of Socio-Economic Inequality at the Graduate Center of the City University of New York. The book, available through Open Access, deals with the challenges faced by single parents and their children—an interplay of inadequate resources, employment, and government policies—drawing from research across disciplines and countries.”
3. “JOLTS Day Graphs: May 2018 Report Edition”—“The Beveridge Curve, which estimates the unemployment rate for a given amount of job openings, has returned to its level during the expansion of the early 2000s.”
4. Elisabeth Jacobs writes in “California’s paid family leave policy is decreasing nursing home use and saving Medicaid dollars” that “Kanika Arora and Douglas Wolf provide the first-ever empirical study assessing the impact of paid family and medical leave … utiliz[ing] longitudinal, state-level data to assess whether California’s state paid family and medical leave policy led to a decrease in nursing home utilization. California enacted a comprehensive paid leave policy in 2004, providing access to six weeks of leave for both new parents and family caregivers. The estimated effect of paid family and medical leave on nursing home utilization in California is a decline of more than 11 percent in the share of the elderly residing in nursing homes.”

Worthy reads not on Equitable Growth:

1. Barbara Kiviat writes in “The art of deciding with data: evidence from how employers translate credit reports into hiring decisions” that “half of US employers consider personal credit history when hiring [and] faced with the context-free numbers of a credit report, and without predictively valid credit scores to fall back on, hiring professionals struggle to make sense of financial data without knowing the details of job candidates’ lives. They therefore reach beyond credit reports, both by inferring events that led to delinquent debt and by testing to see if candidates can offer morally redeeming accounts. A process of moral storytelling re-inflates credit reports with social meaning and prevents people with bad credit from getting jobs.”
2. In “Uses and Abuses of Ideology,” Nathan P. Kalmoe argues that “ideology is a central construct in political psychology, and researchers claim large majorities of the public are ideological, but most fail to grapple with evidence of ideological innocence in most citizens.” In my view, Kalmoe distinguishing between ideology and partisanship seems to be a potentially fatal flaw in what is otherwise an absolutely brilliant essay. We East African Plains Apes think in groups: We outsource a great deal of what we believe to others whom we trust. Thus “partisanship” and “ideology” reinforce each other massively. But that also means that when thought-leader elites change what the partisans with access to audiences say, people’s “ideologies” will change as well—without them thinking about it much, if it all. At least, that is what I see as the potential hole in Kalmoe’s argument.
3. Nicholas Bloom, John Van Reenen, Charles I. Jones, and Michael Webb argue in “Are Ideas Getting Harder to Find?” that “one of the key drivers of economic growth during the last half century is Moore’s Law: the empirical regularity that the number of transistors packed onto an integrated circuit serving as the central processing unit for a computer doubles approximately every two years.” I am provoked by this framing that technology is becoming harder to develop. “Harder” in what sense? In the sense of being more complicated, or more difficult relative to our (increasing) resources? The benchmark of constant research productivity defined as the same real dollar expenditure on research produces the same proportional increase in output? I have heard people say that the benchmark should be that the same share of national product spent on R&D should produce the same proportional increase in output. I have heard people say that the benchmark should be that the natural growth in the share of national product spent on R&D should be such as to produce the same proportional increase in output. I have never heard anybody say that the benchmark is that the same real dollar expenditure on research produces the same proportional increase in output.
4. Joseph Gagnon writes in “QE Skeptics Overstate Their Case” that “David Greenlaw, James Hamilton, Ethan Harris, and Kenneth West … argued that the consensus of previous studies overstates the effects of quantitative easing (QE) on long-term interest rates.”