Some Wisconsin-themed graduation mojo

Hat tip: my grad school office-mate

CFPB

This New York times piece details the inner workings of the Consumer Finance Protection Bureau (CFPB)  regarding regulation of payday lending.

I do not have anything to add to the substance but wanted to note that I know the memo author, Jon Lanning, pretty well, as I was on his dissertation committee. We have stayed in regular touch since he finished his doctorate and dined together (with various others) on multiple occasions in DC. I encouraged him to leave the CFPB for the Chicago Fed, advice that I feel even better about ex post having read the article and with the pandemic at hand to make career moves of any sort more challenging.

I also want to add that Jon is both an incredibly nice fellow and a very serious empirical reseacher. He cares about getting the numbers right and he puts a large weight on evidence in forming his opinions. He is also not much of a rabble-rouser - quite the contrary, I think of him as well over on the chill side of the spectrum. It would take a lot to get him to write a memo like this.

Hat tip: another member of Jon's committee

Book: Holidays on Ice by David Sedaris

Sedaris, David. Holidays on Ice. New York: Little, Brown.

This is a little book, the sort of little book that one finds by the checkout counter at bookstores during the holiday season. It contains a selection of pieces with holiday themes. I purchased it on sale for $3.97 at some point after the holidays.

I found the selection uneven. On the negative side, I thought both "Based Upon a True Story" and "Christmas Means Giving" went on far too long - there are only so many ways to repeat the same joke before the reader gets tired.

On the positive side, I really liked "Front Row Center with Thaddeus Bristol", a review of children's christmas pagaents for a local newspaper and "The Monster Mash," which corresponds to a different holiday and tells the story of Sedaris' visits to a morgue.

Most fun for me was "Six to Eight Black Men," which tells the story of the bizarre and astoundingly un-woke Christmas narrative around Holland's version of Santa Claus. Said narrative features "Zwarte Piet" or Black Peter, and his band of helpers, the "black men" in the title of the piece. I had the amazing experience of viewing the arrival in Amsterdam (on a boat) of Saint Nicholas, Swarte Piet and the rest of the entourage on a long-ago seminar visit. I was accompanied by my friend and former colleague Audra Bowlus, who was spending the year on sabbatical in Amsterdam. Sedaris does a very fine job of capturing the strangeness of the entire enterprise.

Recommended if you really like Daivd Sedaris, but not the place to start with him.

Amazon book page
Barnes and Noble book page
I have forgotten what sale table yielded this one.

Air travel trends

I was surprised by the figure in this Gary Leff blog post showing a non-trival uptick in TSA screening counts over the past few days.

Green shoots, of a sort, as we used to say.

Furloughs at UW Madison

Employees earning over $150,000 will take six days of furlough over the next six months (a 4.6% reduction per month). Those earning between $80,001 and $150,000 will take five days (a 3.8% reduction per month), those earning between $50,000 and $80,000 will take four days (a 3.1% reduction per month), and employees earning under $50,000 will take three days of furlough during the six months between May and October (a 2.3% reduction per month). The number of furlough days will be adjusted for those with 9-month appointments, so they bear a similar salary reduction over the course of the year as others with the same annual income.

There are also hiring freezes, some travel cuts, contruction project postponements and so on. And the top administrators are all taking much bigger temporary salary cuts.

Overall, this is a bit less than I had expected based on what other places were doing plus remarks around the virtual water cooler.

Full message from Chancellor Blank.

MSN these days

I have not flown since March 13. Even then there were a lot fewer people around, but nothing like what is described in this report from the local paper about life at the (very nice in its Frank Lloyd Wrighty sort of way) local airport MSN.

Chris Phelan on the policy response to the pandemic

I have not blogged much about the pandemic both because I am no expert (obviously not a barrier to many other commentators, but ...) and because I am rather bored with reading about it at this point, let alone writing about it.

But I did enjoy this piece by Chris Phelan that MR linked to today. I particularly like the phrase "generational theft" and the general air of realism that pervades the piece.

I had the good fortune to study for the first-year "core" exams at Chicago with Chris back in the day.

A different sort of coming out story

I found this Atlantic piece moving and also a fine challenge to several different stereotypes. The writer's father is presumably the converative writer Andrew Klavan.

Comparison groups for tenure letters and such

One important aspect of writing letters for scholars who have been out for a while concerns choosing a comparison group. Many tenure letter requests explicitly ask for comparisons to other scholars at the same career stage. Making these comparisons requires recalling who came out on the market when, which can be relatively easy if your department interviewed in the relevant field that year but is less easy if it did not.

Earlier this year when writing a letter for someone who received their doctorate in 2012, I was having trouble coming up with comparators, when I suddenly had an inspiration: why not compare them to the Review of Economic Studies tour class for their year? For readers less familiar with relatively obscure details of the status hierarchy in academic economics, each year this journal - the fifth of the "top five" general journals by most accounts - organizes a European tour for a set of job market stars. The 2020 tour list is here; Wisconsin made offers to two of them (and did not hire either one). The link also leads to a document with the historical lists.

As it turns out, the numbers of Google Scholar citations (as of Feburary 2020) of the seven members of the Review of Economic Studies tour for the doctoral class of 2012 (the 2011 "tour") are: 1056, 855, 678, 653, 318, 264, and 251. I was surprised by the spread in citation counts as well as the spread in publications / papers, which consulting the relevant Google Scholar pages revealed.

Embarrassingly, I opposed hiring the person at the top of the list when I was at Michigan, but I am always glad to be proven wrong when it involves a new person doing better than I expected. There are two or three other cases of similar (ex post) foolishness on my part. The fact of the matter is that a read of a job market paper and a 30 minute interview do not even come close to fully resolving the uncertainty in most cases.

Economics moment of zen #13

From a student paper:

"The production function is amused to be linear"

Seems to me it should be embarrassed ....

Our leader speaks

Rebecca Blank's part starts at about 24:00.

I am not generally one to wax enthusiastic about academic administrators. I have participated in discussions with faculty colleagues in which we attempted to come up with a precise estimate of the number of IQ points lost by moving in the chair's office, or the dean's office. Towards the end of my time (and his time, as it turned out) at Michigan, I ended up dining at the downtown Knight's in Ann Arbor on my own at the same time that LS&A dean Andrew Martin was there dining in a party of four - presumably donors but who knows. I actually seriously contemplated buying an extra glass of wine to "share" with him (i.e. with his smiling face and fancy shirt and bow tie) on my way out, though in the end I wisely thought better of it.

In contrast, I am very glad indeed that Becky Blank is our chancellor during this odd time.

REA experimental evaluation released

The final report for the recent experimental evaluation of the U.S. REA program has been released. I was involved on the margins of this as a consultant to Abt Associates, who conducted the evaluation under contract to the U.S. Department of Labor. Jacob Klerman, the lead author, overlapped with me at Chicago, and was my TA for Gary Becker's first year micro class.

The report is notable on a few dimensions: First, relative to other government reports on experimental evaluations I have been involved with, it does an exceptional job of embedding the analysis and results into the broader literature, and an exceptional job of incorporating the underlying economics of the problem. Second: the REA program is the programmatic sibling of the WPRS (= Worker Profiling and Reemployment Services) program considered in Black, Smith, Berger and Noel (2003). In line with our findings there, requiring people to show up for a meeting with a staff person seems to drive a big part of the impact in REA. Also in line with BSBN (2003), but more compellingly due to the much larger sample, the impacts do not clearly vary with the claimant's estimated probability of exhausting their benefits.

Here is Abt's summary:

The Challenge
The  goals of the Department of Labor’s Reemployment and Eligibility Assessment (REA) program were to address the reemployment needs of Unemployment Insurance (UI) claimants and prevent and detect improper payments. Abt Associates conducted a study of 250,000 UI claimants to determine the impact of the low-intensity program, which involved a few hours of group engagement and a few hours of one-on-one counseling. The cost generally was less than $100 per claimant.

The Approach
This REA evaluation is among the largest random assignment studies of a social program ever conducted in the United States. Nearly every REA-eligible UI claimant in the four participating states during the study intake period was randomized. Despite this highly inclusive design, the resulting sample sizes are only borderline sufficient to address some of the research questions. This appears to be because—consistent with the low intensity of the intervention—impacts are small. Abt previously conducted an implementation evaluation.

The Results
The program cut the time people spend drawing UI by an average of 1.3 weeks and increased earnings by $465 in the first year, or two percent of wages in the control group. About half of the decline in claimants represented an increase in work. The other half did not receive UI, but were not working. State responses to failure to attend required REA meetings appear to be an important factor in the drop in UI weeks. The REA program has been replaced by the Reemployment Services and Eligibility Assessment Program (RESEA). Our study will inform the redesign of RESEA program and the evalulation design.

You can find the implementation report and the final report on Abt's web page here.

You may be bored of the pandemic but it is not bored of you

Very aggressive furloughs have arrived for faculty and staff at the University of Arizona. In addition to their serverity, these have a rather obvious design flaw, in the sense that during the period of the reduction, someone whose salary is usually $201,000 will make less than someone whose salary is usually $199,000. Perhaps a good general rule would be to have at least one numerate person in the upper echelons of the administration at each university.

Furloughs are almost surely in the future at Wisconsin as well, though I expect less dramatic than the ones at Arizona. They have already hit the staff of the system's central office.

I experienced furlough days my first year at Western Ontario, where they were caused "Rae Days" after the province's goofy NDP premier Bob Rae. As the rather embarrassed department chair explained them to me, my thought was that, as a politician, you really do not want to have mandatory days off without pay named after you.

Corona-viaurs-themed M*A*S*H compilation

M*A*S*H was one of my favorite shows growing up during the period - late in primary school and during junior high - when I was watching a vast amount of television (despite the horrifying reality that there were only six channels!). That led me to mostly watch episodes during the middle of M*A*S*H's long run. I can remember watching the extra-long final episode in my third year of college.

Book: The Shortest History of Germany by James Hawes

Hawes, James. 2017. The Shortest History of Germany. London: Old Street Publishing.

This book delivers on its promise in both senses - it is indeed short, just 227 relatively small pages - and it is about the history of Germany. It achieves its compactness in part by zooming through the "initial conditions" up to the year 526 in just 26 pages, and then skimming the next thousand years in just 44 pages. Do not look to this book if you seek to learn about pre-modern Germany in any depth.

In 1524, the book slows down. The heart of the book concerns the most recent 500 years of German history, and the single overarching point that the book devotes itself to defending lends itself to an easy summary: Western Germans are great, but Prussians are big trouble now and have always been big trouble. Indeed, it seems that all the good things in German history come from the West, while all the bad ones, up to and including the "Alternative for Germany", come from the East. Perhaps.

Certainly the book does make a strong case that the East and the West differ in socially and culturally important ways.

Similar themes arise in this recent Economist (which called the book "a must-read" according to the blurb on the front cover) piece on East-West differences 30 years after the fall of the Berlin Wall and a parallel (gated) piece in the Financial Times as well as in this recent paper:

--------------------------------------------------------------

IZA DP No. 13032: The Separation and Reunification of Germany: Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism
Sascha O. Becker, Lukas Mergele, Ludger Woessmann

German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles.

--------------------------------------------------------------

Note the first point in particular and note that, perhaps surprisingly, the paper does not cite the book. The paper is forthcoming in (as I write) the next issue of the Journal of Economic Perspectives.

In sum, if you are interested in German history (or European history more broadly) the book provides a quick and provocative read.

Amazon book page
Barnes and Noble book page
I accidentally bought two copies of this, one at the airport in Munich and one, on a different trip, at the train station in Mannheim.

Book: Wave by Sonali Deraniyagala

Sonali Deraniyagala. 2013. Wave. New York: Knopf.

This memoir tells the story of an economist who lost her husband, her two children, and her parents to the 2004 tsunami. She survived, by chance and by action, hanging on to a tree while the wave rushed back into the sea. The book starts off with the tsunami and then chronicles, in episodic detail, Sonali's gradual (and never complete) reconciliation with her loss and with her life.

The NYT book review has more to say.

I bought the book many years ago, but put off reading it because it has a personal connection: I worked with the author's late husband, the economist Steve Lissenburgh, when I consulted at the Policy Studies Institute (PSI) in London in the late 90s and early 00s, helping them mainly with their evaluations of various bits of the Blair government's New Deal programs, such as this one. Indeed, I had the honor of giving the fourth annual lecture in memorial of Steve organized by the PSI in October of 2008. Michael White, who managed the employment group at PSI prior to Steve taking over (and who recruited me to work with them at a conference organized at Her Majesty's Treasury in the mid-90s), wrote a heartfelt obituary for the Independent.

I am not sure that the notion of "recommended" quite fits for a book like this - not everyone will find this sort of book good pandemic reading. I will say that the the book is moving indeed, both because of the nature of the events it describes but also because  of its combination of a gentle spirit, lush writing, and brutal honesty.

Amazon book page
Barnes and Noble book page

Book: The Golden Rhinoceros by Francois-Xavier Fauvelle

Fauvelle, Francois-Xavier. 2018. The Golden Rhinoceros: Histories of the African Middle Ages. Princeton: Princeton University Press.

I chose this book because it covered aspects of the history of a time and place about which I had never read before, namely Africa during the middle ages. As the book makes clear, one reason I had not read much about the history of Africa during the middle ages is that the literature on the topic is not large; in turn, an important reason for the smallish literature is the lack, relative to Europe in particular, of surviving written records from the middle ages for much of the continent.

The book provides a series of what one might call historical vignettes, rather than attempting a complete narrative history. The vignettes rather strongly oversample parts of Africa that had economic and social interactions with Europeans and Arabs, and rely primiarly on a combination of contemporary written accounts by Europeans and Arabs and the physical evidence provided by archaelogists, among them the author. The author clearly understands and reflects on what one might call the epistemic selection issues implicit in the available written and physical record.

I found the book an enjoyable and informative introduction to its time and place. The stand-alone chapters also make it more suitable than a cumulative narrative history to episodic casual reading.

Recommended.

Amazon book page
Barnes and Noble book page
Bricks and mortar bookstore where I purchased the book

So many diamonds

Some very good news from Delta in regard to elite status and the pandemic, as interpreted by air travel blogger Gary Leff.

A few months after I start travelling again - my current three-month break from air travel will be my longest since around 1993 - I will become a two-million-miler on Delta / Northwest.

On inter-university online seminars

Marginal revolution linked to this tweetstorm (*) regarding the pandemic-induced appearance of a number of on-line seminars in economics not tied to particular universities. I had it on my list to do a post about that very topic, so I can now frame my post in part as a response to the tweetstorm.

I am aware of at least five such seminars: one on the pandemic and related topics run by the NBER, an econometrics seminar run out of Harvard, and seminars on crime, education, and experimental / behavioral economics started by individual researchers or small groups of researchers.

Some remarks:

Most regular seminars in economics are 80 or 90 minutes, though departmental seminars in which students present work in progress are sometimes 50 or 60. My sense is that most online inter-university seminars are 60 minutes. Perhaps there is a view that attention spans are shorter when not in person or perhaps the start of a "new" seminar allows a change that would have (or should have) happened to in-person seminars but for the stickiness of the old equilibrium.

One thing the tweetstorm omits is the relatively unique character of economics seminars that arises because they typically involve substantial back-and-forth between the speaker and the audience during the seminar, not just at the end as is common in other disciplines. This feature has important implications for the extent to which economics seminars can scale up in the same way that a lecture does. In my view, the in-person seminars that the NBER runs in labor economics and education (especially at the summer insitute where the audience for the labor talks sometimes rises to over 100) already well exceed the optimal scale given the interactions.

There are a number of solutions to the interaction / scale issue. One is to generate and maintain strong social norms about who gets to ask questions, so that what appears to be a seminar with 100 participants is actually a seminar with 25 participants and 75 non-speaking onlookers. That's how NBER meetings work. Another solution is to limit the size of the seminar. At least one of the online seminars that I am familiar with asked invitees not to broadcast the existence of the seminar (which is why I am being coy about it here) for precisely this reason. There is, of course, an aspect of this to the NBER meetings as well - you have to be invited and not everyone gets invited.(**) A different solution dials down the interaction, limiting questions during the presentation and then having a formal discussant or a formal period for questions and answers (or both) after the presentation. A couple of the online seminars I am familiar with have gone down this road.

A related point is that the online seminars I have participated in - including the informal student public economics seminar here at Wisconsin, which has moved on-line (as have some of the student seminars at Michigan) - is that they make use of the virtual hand-raising facility built into the meeting software rather than allowing audience members to simply shout out their comments, as often happens in person. I like the change to raising hands and hope it carries over to in-person seminars when they return.

The tweetstorm thinks these inter-university seminars will persist and worries about who should run them. I agree with the tweetstorm author's prediction and also with his focus on the importance of the gatekeeper role. I predict that either organizations like the NBER, or its European semi-analogues like CEPR, IZA and CESifo, will end up managing the on-going on-line seminars, with the subject area leaders within those organizations playing the gatekeeper role, just as they do now with group membership and in choosing who presents at the reguular subject area conferences / seminars. It will be interesting to see how this plays out, and we all know the track record of economists' predictions.

One last point: on-line seminars are only a partial substitute for in-person departmental seminar visits, which I do not think will go away. Much business gets done at seminar dinners, and much is learned during in-person office visits with the seminar speaker on the day of the seminar. One of the highlights of seminar visits for me is often meeting with the local gradual students and hearing about their work. Online seminars omit all of these features.

(*) A "tweetstorm" is a blog post made harder to read by being shared on twitter in little bits.

(**) I do not mean to pick on the NBER here; I am using it as an example that I think most economics readers will have some familiarity with, even if from a distance. These same issues arise with, e.g. the Institute for Research on Poverty Summer Research Workshop of which I am a co-organizer. It is a real problem. No matter how inclusive and open and non-hierarchical and encouraging of junior scholars you want to be, there are real fiscal and technological constraints: budgets are finite and seminars / workshops that get too big are not as intellectually useful.

Book: Exhalation by Ted Chiang

Chiang, Ted. Exhalation. New York: Knopf.

Wow. This is some of the best science fiction I have read in a very long time. Chiang uses the flexibility afforded by the implicit rules (or lack of rules) of the genre to craft shorts stories that meditate on various philosophical issues, stories richly informed, it seems, by reading of the relevant literatures.

The one that resonated most for me is "The Truth of Fact, the Truth of Feeling" which concerns the difference between, bluntly, what actually happened and the narratives that people construct around their pasts. One strand of the story plays out in the context of the world where some people create "life logs" - essentially videos of their entire lives - and the cost of searching the lifelog suddenly falls dramatically, leading to a lot more sometimes wrenching comparisons between actual facts and remembered narratives. I tend to think about these issue in terms of my last few years at Michigan, as my mental narrative of those years differs dramatically from that of others (and, of course, I think mine does a much better job of tracking actual events).

I also quite enjoyed "The Lifecycle of Software Objects," which  conemplates the moral status of artificial intelligences, and "Anxiety is the Dizziness of Freedom," which concerns the ethical implications of parallel universes.

The book concludes with a few pages of notes about the origins of each of the stories, a feature I would be happy to see in basically every fiction book (and mybe in non-fiction books and papers too).

Highly recommended.

Amazon book page
Barnes and Noble book page
Bricks and mortar bookstore at which I purchased the book

Addendum: A market test of sorts: used hardcover copies of Chiang's first book of short stories - Exhalation is his second - in good condition go for nearly $200 on abebooks.com.

An Atlantic piece on Americans and guns

This Atlantic reporter does the unthinkable and actually tries to understand both the gun nuts and the anti-gun nuts. The result is, I thought, interesting and useful.

Among other things, the debate - not the best term given the general absence of actual engagement on either side - highlights the "elite virtue signalling" versus "deplorable rebellion against smug elites" dynamic that seems to me to be the signature aspect of American cultural and political life these days.