Brad DeLong: Worthy reads on equitable growth, September 21-27, 2021

Worthy reads from Equitable Growth:

1. Back in the real old days, large family sizes meant that the economies of scale in child care were captured for the most part within the family, and certainly within the extended family. In our time of nuclear families and low fertility a great deal of this essential work and life is done at a much greater societal resource load per child than a better organized society would do. Read Sam Abbott, “The child care economy,” in which he writes: “Insufficient child care options can prevent parents who wish to work from doing so, with mothers often bearing the brunt of this challenge. … High-quality early care and education provides critical socialization and learning opportunities when the brain is developing rapidly. … Adequate funding is necessary for human capital development. … Supporting child care workers is crucial for promoting quality care and human capital development. … Investing in the nation’s children is one of the safest bets policymakers can make. Research on early care and education programs finds that $1 in spending generates $8.60 in economic activity.”

Worthy reads not from Equitable Growth:

1. There is a very large fiscal contraction coming down the tracks, targeted at the non-rich in the United States. It is not at all clear that macroeconomic forecasters optimistic about production and employment are taking full and proper account of it. Read Asha Banerjee and Ben Zipperer, “All pain and no gain: Unemployment benefit cuts will lower annual incomes by $144.3 billion and consumer spending by $79.2 billion,” in which they write: “Congress and the Biden-Harris White House have let expanded unemployment benefits expire in the middle of the ongoing COVID–19 pandemic, even while employment is still well below pre-pandemic levels. As a result, annual incomes across the United States will fall by $144.3 billion and annualized consumer spending will drop by $79.2 billion, according to the best available evidence on the effects of recent unemployment benefit cuts. … About half of states prematurely terminated these programs between June and late July 2021, and then, by letting the federal law expire in September, Congress and the White House cut off pandemic UI entirely. In total, more than 10 million workers lost all of their unemployment benefits because of either the state-level program terminations or the September program expiration.”

2. Behind the belief that Black people just happen to make bad choices is blame: either of the culture, or (more often) of the genes—although that is mostly whispered in polite society. Until we can convince the overwhelming majority of Americans that people are, at bottom, the same, and that groups where “bad choices” are more common arise from structural causes, equitable growth will be a nearly impossible task. Read Alberto Alesina, Matteo F. Ferroni, and Stefanie Stantcheva, “Perceptions of Racial Gaps, Their Causes, and Ways to Reduce Them,” in which they write: “Using new large-scale survey and experimental data, we investigate how respondents perceive racial inequities between Black and white Americans, what they believe causes them, and what interventions, if any, they think should be implemented to reduce them. We intentionally over- sample Black respondents, cover many cities in the United States, and survey both adults and very young people aged 13 to 17. In the experimental parts, we consider the causal impact of information on racial inequities (such as the evolution of the Black-white earnings gap or the differences in mobility for Black and white children) and explanations for these inequities (i.e., the deep-seated roots and long-lasting consequences of systemic racism) on respondents’ views. Although there is heterogeneity in how respondents perceive the magnitude of current racial gaps in economic conditions and opportunities, the biggest discrepancies are in how they explain them.”