- Nick Bunker: The very real success of the Earned Income Tax Credit | Washington Center for Equitable Growth
- Casey Schoeneberger: Washington Center for Equitable Growth Announces Inaugural Class of Grantees | Washington Center for Equitable Growth
- Lunchtime Must-Read: Ezra Klein: Paul Ryan's Poverty Plan | Washington Center for Equitable Growth
- Morning Must-Read: Brian Buetler: The Adler-Cannon Halbig v. Burwell Argument Is a Fraud—Just Ask Scott Brown | Washington Center for Equitable Growth
- Morning Must-Read: Guido Matias Cortes et al.: The Micro and Macro of Disappearing Routine Jobs: A Flows Approach | Washington Center for Equitable Growth
- Morning Must-Read: James Pethokoukis: The Weird Obsession That's Ruining the GOP | Washington Center for Equitable Growth
- Nighttime Must-Read: Eric Chemi and Ariana Giorgi: For CEOs, Correlation Between Pay and Stock Performance Is Pretty Random | Washington Center for Equitable Growth
- Additional Dimensions of Inequality: Wednesday Focus for July 23, 2014 | Washington Center for Equitable Growth
Aida Caldera Sánchez et al.: Improving Well-Being in the United States: "Life is quite good in the United States compared to other OECD countries, thanks to strong economic growth and technological progress having lifted average income to high levels. Nonetheless, there is evidence that the benefits from growth have not been sufficiently broad based. Self-reported happiness increases with income, an issue particularly resonant in a country with among the highest levels of income inequality in the OECD and a pattern of inequality that appears to be moving toward even more concentration at the very top at the expense of the middle class and the poor. Working hours that remain among the longest in the OECD are also creating challenges for work-life balances, child education, personal care and leisure. These pressures are contributing to higher job strain and work-related stress with unhealthy consequences, including for mental health, and a detrimental impact on employability and medical costs. While these trends cannot be easily reversed, a number of policy options are being usefully rolled out and other initiatives are being considered: federal-level policies improving access to health care and early-childhood education, state-level initiatives favouring workplace flexibility, firm-level investments in job quality and greater attention to the health consequences of job-stress. If successfully adopted, they would go a long way toward improving the well-being of American working families..."
Cory Doctorow: When all the jobs belong to robots, do we still need jobs?: "Where Tufekci's analysis falls short is in her willingness to think outside the market box. She implies that the solution to this all is some kind of market reform, but doesn't suggest that, perhaps, markets can't efficiently organize abundant things--only scarce things. If we persist in the view that the dividends from robots' increased productivity should accrue to robot owners, we'll definitely come to a future where there aren't enough owners of robots to buy all the things that robots make.... There's a real scarcity of economists willing to think about the possibility that abundance makes markets obsolete altogether. Property rights may be a way of allocating resources when there aren't enough of them to go around, but when automation replaces labor altogether and there's lots of everything, do we still need it?..."
James Heckman (2010): I could tell you a story about... Milton Friedman. In the nineteen-seventies, we were sitting in the Ph.D. oral examination.... After he’d left, Friedman turned to me and said, 'Look, I think it is a good idea, but these guys have taken it way too far.' It became a kind of tautology that had enormously powerful policy implications, in theory. But the fact is, it didn’t have any empirical content. When Tom Sargent, Lard Hansen, and others tried to test it using cross equation restrictions, and so on, the data rejected the theories. There were a certain section of people that really got carried away. It became quite stifling.... The further down the food chain you go, the more the zealots take over.... We knew Keynesian theory was still alive in the banks and on Wall Street. Economists in those areas relied on Keynesian models to make short-run forecasts. It seemed strange to me that they would continue to do this if it had been theoretically proven that these models didn’t work.... The underlying ideas of the Chicago School are still very powerful. The basis of the rocket is still intact. It is what I see as the booster stage--the rational-expectation hypothesis and the vulgar versions of the efficient-markets hypothesis--that have run into trouble.... People got too far away from... confronting ideas with data.... When Friedman died... we had a symposium.... Lucas was talking about rational expectations.... One woman... said, 'Look at the evidence on 401k plans and how people misuse them, or don’t use them. Are you really saying that people look ahead and plan ahead rationally?' And Lucas said, 'Yes, that’s what the theory of rational expectations says, and that’s part of Friedman’s legacy.' I said, 'No, it isn’t. He was much more empirically minded than that'..." Via Lars Syll
Jesse Rothstein: Is the EITC as Good as an NIT? Conditional Cash Transfers and Tax Incidence: "The EITC is intended to encourage work. But EITC-induced increases in labor supply may drive wages down. I simulate the economic incidence of the EITC. In each scenario that I consider, a large portion of low-income single mothers’ EITC payments is captured by employers through reduced wages. Workers who are EITC ineligible also see wage declines. By contrast, a traditional Negative Income Tax (NIT) discourages work, and so induces large transfers from employers to their workers. With my preferred parameters, $1 in EITC spending increases after-tax incomes by $0.73, while $1 spent on the NIT yields $1.39..." Via Owen Zidar
- Claire Cain Miller: How Technology, Aided by Recession, Is Transforming the Work World
- Margot Sanger-Katz: Two Americas on Health Care, and Danger of Further Division
And Over Here: