Author: David Wright

This was an interesting take:

The WSJ has a very interesting table of the unemployment and wage distributions for various majors. There’s lots to talk about, particularly the STEM/humanities/social/vocational divide, but one thing that struck me was that the highest and lowest unemployment rates were dominated by tiny majors. In general, small populations tend to have more widely varying outcomes just as a function of standard error, which is why you should always ignore headlines about big jumps in the crime rate for small towns. Anyway, I downloaded the data, generated some plots, and yup, it’s your classic funnel.

He then throws in some graphs:

His conclusion

Moral of the story, don’t change your major from clinical psych to actuarial science just yet. On the other hand, nursing, elementary education, and general education really do appear to be real deal outliers of low unemployment.

Putting aside how impressed I was with this analysis and how jealous I was that I didn’t think of it first, my gut said this wasn’t the last word.

I took the data and changed the y axis from employment to median income:

And 75h percentile income:

I’ve circled two very different kind of outliers in my analysis. My little circle surrounds three majors in both images. They are:

• Elementary Education
• General Education
• Psychology

Low unemployment isn’t everything.

I’m not here to comment on Krugman’s main point in this post, which is that there isn’t any substance to the idea that high income earners contribute something called “job creation” to the economy. But I do take issue with this:

Yet textbook economics says that in a competitive economy, the contribution any individual (or for that matter any factor of production) makes to the economy at the margin is what that individual earns — period.

As someone who often works with extremely productive people I have to respectfully disagree. They teach me when they work with me. They might make me more productive directly and so earn their higher wages, but they make me more productive IN THE FUTURE, whether they stick around or not.

And the longer they stick around, the more productive I will ultimately become.

Model that!

Robin Hanson:

Like democracy fans who insist the only acceptable solution to democracy’s failings is more democracy, for many school fans the only acceptable solution to school failings is more school.

A variant on this is Arnold Kling‘s:

The other camp argues, “Markets fail, and that’s why we need government.” The idea is that markets are prone to excesses and imbalances and need the thoughtful, steadying hand of government to protect consumers and investors from flaws and uncertainties of the market. This camp believes that wise technocrats can and will bring order to the markets.

Markets fail; but they learn from their failures. That’s why we need markets.

I briefly overheard an impassioned case for increasing the minimum wage on some morning news program today. The reason? “Rent is too high to pay on $7.25 an hour”

Indeed, rent is high in this city. I can’t imagine earning the min and making ends meet, certainly not in Manhattan, and certainly not in a nice neighborhood without a bunch of roommates.

But read Ryan Avent’s minibook (or listen to an interview with him) and think about this a bit.

High house prices are much a product of regulation designed to limit urban development. Incumbent house-owners lobby to enhance zoning laws and other regulations that stifle development to constrict supply. Now why would you want to constrict supply of something you own?

So the price goes up.

It’s policies that favor the rich that supply the strongest case for increasing the minimum wage.

Interesting article on a tenured professor struggling financially.

What’s interesting to me about it is just that I can see how this article would quicken the political pulse of just about everyone that reads it. There’s so much material! I’m almost suspicious of it being some kind of hoax designed to drive the entire political spectrum insane with fury.

I’ll briefly mention and skip the irony of a religion professor as a single mother raising her kid alone and messing around with bad boys who lie and cheat (sorry, couldn’t resist).

I’ll try again: her stated complaint in the article is that the brewing attack on the welfare state would be catastrophic to her counter-factual life (ie she’d have had to get a job with which she would be able to pay the bills).

But she isn’t an unbiased observer, folks. She works for a private university in a field where the median wage is probably set by public institutions, who have been giving it (in a bad way) to teachers for a while now:

Overall, if we exclude for-profit schools, which were a tiny part of the landscape in 1999, we have seen tuition fees rise by 32% between 1999 and 2009. Over the same period, instruction costs rose just 5.6% — the lowest rate of inflation of any of the components of education services. (“Student services costs” and “operations and maintenance costs” saw the greatest inflation, at 15.2% and 18.1% respectively, but even that is only half the rate that tuition increased.)

The real reason why tuition has been rising so much has nothing to do with Baumol, and everything to do with the government. Page 31 of the report is quite clear: “except for private research institutions,” it says, “tuitions were increasing almost exclusively to replace losses from state revenues or other private revenue sources.”

In other words, tuition costs are going up just because state subsidies are going down. Every time there’s a state fiscal crisis, subsidies get cut; once cut, they never get reinstated. And so the proportion of the cost of college which is borne by the student has been rising steadily for decades.

Her skills aren’t worth much and her job is to teach other people those same skills. For 35 Gs plus room and board?

Yeah friggen’ right.