When (Where and Why) Women Were More Literate than Men

Vincent Geloso History , , , ,

For most of history, men tended to be more literate than women. In essence, illiteracy was widespread but even more so for women. There is one exception: the French-Canadians. For most of the 19th century, literacy rates were greater for French-Canadian women than French-Canadian men.

literacy

This is a fascinating piece of economic history and somewhat of a puzzle (given that it is an oddity). It also shows how important institutions are to determining paths of development. In a 1999 article in the Journal of Economic History, Gillian Hamilton indicates that the more “liberal” institution of marriage contracts for the French-Canadians probably induced this result :

Quebec’s unique legal institutions offered the opportunity to draw up a prenuptial contract to couples who could benefit from a different property structure than the law provided. Not surprisingly, a prenuptial contract was unnecessary for most couples. Within this transaction cost-competitive marriage market framework, contracts generally were desirable only in cases of mismatch, either due to an exceptional woman or a relatively productive husband whose job did not entail a significant component of family participation. Their contracting decisions are consistent with terms that would have provided them with more appropriate incentives for work and the production of jointly produced goods, and at least the potential for greater utility and wealth than they otherwise would have accumulated. The use of contracts likely provided Quebec with higher overall wealth and a wider income distribution than it would have experienced without contracts (because the skilled disproportionately signed agreements).

 

US Immigration: a Primer

Jacques Delacroix Sociology , , , ,

President Trump was elected for a variety of reasons but any observant person knows that the general topic of immigration played a significant role. Mr Trump appears unfamiliar with the current American immigration system and he is ignorant of the economic benefits of immigration, or he downplays them. Below I address modest parts of both topics. I aim for sensationalism rather than for completeness.

First a little bit about the American immigration system such as it is in January 2017. There are two main bizarre ideas among Trump supporters about the real system: One regards who is allowed to come into this country (legally, I mean); the other strange misconception has to do with how aliens become US citizens.

The system by which the US admits immigrants is a little complicated and its description relies on a specialized legal jargon. In my considerable experience, few people have the patience to sit through a lecture on American immigration policy. So, let me cut to the chase:

THE NON-EXISTENT ORDERLY QUEUE

There is no way, zero way, the average married Mexican can legally immigrate into this country.

This is worth mentioning because many are under the impression that illegal immigrants are cheats who cut through the line instead of patiently waiting their turn.

The “average Mexican” does not have American-born children, children who are US citizens by birth. Mexicans who do have such children and the children are minors go to the head of the line. There is no (zero) line for those who don’t have close relatives who are Americans or legal immigrants. This example illustrates the US immigration policy that accounts for most legal immigrants in most years: Family re-unification.  

Sophisticated people noticed long ago that there is an instantaneous way to acquire an American relative. It’s to marry an American. Doing so for the purpose of gaining admission to the US is illegal for both parties involved. I don’t know if anyone ever goes to jail for it but it’s ground for immediate deportation. Nevertheless, I am told by some of my immigrant friends that there is a thriving little cottage industry of visa brides and grooms for a fee in some parts of the country. I cannot verify this rumor but I believe it.

Similarly, there is only one way the average married Irish man or woman may immigrate into this country: Winning a lottery. (You read this right: a lottery which one may play as often as one wishes; it has not entry fee.) In 2015, only about 49,000 people, all from Europe and Africa, gained admission on the basis of winning that lottery.

Some legal immigrants gain admission under the broad category of “employment related reasons.”  This category includes high-level programmers as well as farriers. (Look it up.) It’s a small number. In 2015 they made up about 15% of all one million-plus legal admissions. Our average Mexican and our average Irishman does not qualify here either.

You may have heard of an “investor’s visa” accorded to foreigners who will create employment in the US. That’s always a tiny number, about 10,000 in 2015.  It’s not always open. Congress decides about if every so often.

There is a third main, amorphous way by which foreigners are admitted, “asylum” broadly defined. I call it “amorphous” because the definition of who is a refugee or an asylum seeker can be changed by Congress in a very short time. The President decides how many can be admitted in either category. The number admitted under this category is accordingly highly variable. It was about 150,000 in 2015. It could have become 500,000 in 2016 because of a new crisis anywhere in the world. (It didn’t.) The current, Trump figure of  50,000 seems just about normal historically. Yet, there is wide variation about the average.

There is thus no orderly queue that Felipe or Ahmed could join on their own if they wanted to avoid becoming illegal aliens.

That’s it, folks. If you want to know more about the raw numbers, study the relevant pages in the Statistical Abstract of the US.

So, contrary to what I suspect is a widespread idea among conservatives, it is not the case that there is an orderly, wide-open legal way to immigrate into this country that illegal immigrants perversely ignore. Illegal immigrants are not rudely jumping to the head of the line; they come in through a side-door the US does not seem able to close.

One more thing, a programmatic idea: Instead of the present admission policies (plural)  based on viciously absurd selection we have, we could take a page from the Australian and from the Canadian playbooks. That is, we could coolly decide what kind of immigrants we want and try and tailor a door to those precise dimensions. Presently, we are doing very little of this, however unbelievable it may sound. Such a rational procedure would not not need to eliminate refugee and asylum seekers admissions.

I am personally in favor of such a reform . I also think special policies  should apply  to our proximate neighbors to the north and to the south. I developed this idea with Sergey Nikiforov in an article [pdf] published in the Independent Review several years ago.

Incidentally, I am a product of a rational immigration policy myself. I was admitted on merit alone. I rest my case! Thank you for asking. OK, truth be told, I tried to come in as a spouse of an American citizen but she dumped me.

GAINING CITIZENSHIP

On to the next misconstrued idea. I keep hearing (on talk radio, I confess) irate citizens affirming that foreigners who don’t want to take American citizenship should not be admitted. The case hardly arises.

In fact, in reality, to be allowed to become a US citizen, to take American citizenship, requires several years of residence in this country after being legally admitted. (See above.)

Hence, personal preference plays little role in determining which immigrant does not become a US citizen. I don’t have the numbers but I am sure that, as a rule, the vast majority of legal immigrants adopt American citizenship shortly after they are legally empowered to do so. It is true that, in theory, some hesitation or some problems may arise in connection with some countries of origin who do not wish to recognize dual citizenship. In practice, depriving anyone of his passport is low on the list of priorities of most countries from which new US citizens originate. (India may be an exception – a curious exception – as if the country were facing an unbearable burden of immigrants of all sorts.)

The consequence of this scenario is that, contrary to what I think is a widespread notion, there is no horde of legal immigrants living in this country and peevishly and disloyally refusing to take American citizenship. It also follows that there is no mass of illegal immigrants who obstinately refuse American citizenship. It’s not available to them, period.

I think it’s legitimate to be opposed to illegal immigration and even to legal immigration but it’s best to do on the basis of correct information.

On Minimum Wages, Health Code Violations and Proper Assessment

Vincent Geloso Economics , ,

A few days ago, Tyler Curtis at the Freeman (the Foundation for Economic Education’s flagship publication) posted a short piece on the minimum wage and health code violations in restaurants. Curtis based on a paper (unavailable in full) by Srikant Devaraj who asserted that increases in minimum wages in Seattle had led to increases in health code violations by restaurants (heavily affected by the increases).

Devaraj used a standard difference-in-difference econometric approach. The problem underlined by some was the choice of benchmark for the method : New York City. New York City and Seattle are two very different cities with different health codes. It is hard to make this claim stick even if the uncontrolled results (before statistical tests) show an increase in health code violations. Nonetheless, I have been able to find one other study that shows – based on Californian data – that there was a very small deterioration in health code violations (especially by the top restaurants) following increases.

Now, I am not convinced by the econometric design of both, but I am axiomatically convinced. This is where I think economists have made the error of relying too much on empirical methods. While, as an economic historian, I always favor more data, I also am trained to be skeptical about data does not say.

In the case of the minimum wage, the debate has raged between economists over the employment effects (i.e. the demand for labor). But this is a fraction of everything involved with the production of goods in industries affected by minimum wages. For an employer, a cost is a cost regardless of the form it takes. If an employer is forced to pay somebody above what they produce in value, then something has to give. For a 5% increase in the minimum wage, it is doubtful that an employer with three employees will be willing to sack one third of his workforce (and roughly one third of his output). So, he can cut costs differently. He may ask employees to buy their uniforms, he may refuse to provide them with free lunches, he may also even decide to cut on quality of his service – as is the case with the two studies outlined above.

The problem is that no study of the minimum wage has attempted to measure all these effects at once!  There is no study that looks simultaneously at hours worked, people employed, type of people employed (substitution effects), prices for consumers, quality and marginal benefits (uniforms, free lunch, insurance, etc.) on both the short and long-terms levels and trends (they also rarely adjust the minimum wages for regional purchasing power parities and the under-reporting of tips)

The health code violations papers show how many channels employers can use to adapt – channels which some fail to account for when they proclaim that we can raise the minimum wage without adverse consequences. Maybe its time that we, as economists, try to be more cautious when we make claims about the minimum wage’s minimal effects.

The New Colossus

Brandon Christensen Liberty , , , , ,
Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
“Keep, ancient lands, your storied pomp!” cries she
With silent lips. “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!”
— poem by Emma Lazarus, 1883

How much has Cuban productivity increased since 1960?

Vincent Geloso History , , ,

Is it possible for two equally rich countries (on a per capita basis) to have different level of output per worker? The answer is obviously yes, and it matters in the case of measuring growth in Cuba since the revolution.

A country with a very young population will tend to have fewer workers than one with an older (but not too old) population. Let’s say that countries A and B have a median age of 22.5 in year one.  However, in year ten, country A has a median age of 35 but country B has seen a more modest increase to a median age of 25. This will bias any estimates of growth comparison between both country. The increase in the median age suggests that there are more and more workers in country A (people of prime age) than in country B. As a result of that, output per capita will increase faster in country A than in country B even if both countries have equal rates of growth in output per worker.

Well, countries A and B are basically Cuba and most of the rest of Latin America. Since the 1950s, Cuba’s population has aged rapidly but birth rates have plummeted so fast that families shrunk. With fewer kids in the population, it means that the share of the Cuban population that are of prime working age increased rapidly. This is what biases the comparison of Cuban living standards with other Latin American countries.

In the figure below, I took the GDP (the Maddison data) of Cuba since 1950 (indexed at 1960 to see the arrival of Castro) and divided it by the total population, the population above 15 years of age and the population between 15 and 64.

cubagdp

As one can see, with the GDP per capita series, Cubans saw a 50% increase in their incomes between 1960 and 2005 (the Maddison data stops at 2008). However, when you look at GDP per working age adult in order to capture the growth in productive capacity, you get moderately different results whereby the cumulative increase is three-fifths to half as small.

In light of this, it seems like Cuba’s living standards are less and less impressive.

Angry? Learn economics!

Rick Weber Culture, Economics, Education, Liberty , ,

The election didn’t go your way (and if it did, just think about past elections… at least some of those didn’t go your way) and now you’re itching to do something about it. You’re angry and motivated, and at risk of making things worse. 

Economics isn’t just about money. In fact, it’s barely about money. It’s mostly about cooperation between strangers. But economists also study competition. Most importantly, we study decision making which is essential to understand if you want people to make different decisions!

More importantly, economics helps us understand how to navigate costs and benefits wisely. It turns out wise decision making isn’t as straight forward as we’d hope. So if you care enough to work hard to make the world better, economics is worth your time.

Still here? You really want to make the world a better place! Let me suggest that you study social science. Something I’ve learned during my first decade of studying economics (Jan. 2018 will by my 10 year mark) is that thinking clearly about something as complex as society requires mental tools that we aren’t born with. Our intuitions will lead us astray. The good news: economics mostly boils down to common sense rigorously applied.

Economics doesn’t have a monopoly on the truth (if we did, this post would be shorter but you’d have to pay to read it). But I think econ is the best place to start in an intellectual exploration of society. It will help you build a robust and modular framework for understanding the world. Economics is the ultimate modular social science; you can plug-and-play with insights from anywhere.

So why econ? Because at the end of the day, economics deals with the most important aspect of life: how to live life well. It boils down to this: every choice comes at the cost of a foregone alternative. Opportunity cost. All (good) economics comes down to this profound truth. Whether your goal is to reduce poverty, pollution, or parenting woes, learning to think of cost in these terms will serve you well.

Let’s take that concept for a test drive… would banning plastic bags reduce environmental harm? The benefit is that you’ll eliminate the problems associated with these bags (litter, use of oil, etc.). But we need to understand the costs before we know if we’re helping or hurting the environment. Notice that link starts with the question “paper or plastic” and goes on to say nothing about paper bags; it’s looking at the silver lining without acknowledging any possibility of a storm cloud. That lack of economic thinking opens us up to new problems: making heavy paper bags also creates pollution and could very well create more.

In other words, this simple concept showed us that it’s possible to do harm by doing something that sounds good (the road to hell is paved with good intentions!).

It’s easy to miss the forest for the trees: economists specialize in researching very specific areas–foreign exchange markets, agricultural futures, political change, pirates–and it’s easy to get bogged down in the details. Studying economics in school means studying under specialists. But once you’ve got the basics of the economic way of thinking down, you’ll see that those specializations are really just applications of the same general concepts and the same basic way of thinking. It’s easier to understand once you speak our language, but there are lots of great resources. Two places I would start:

Now get to it! Start making things better!