Twilight Zone Tuesday, or Delayed Sept. Jobs Report

As if I didn’t already feel like I’d stepped into the twilight zone, trying to teach classes on a Tuesday morning after two days of traveling from Thailand to Easton, the September jobs report came out today, two and a half weeks late due to the shutdown.

In sum, the economy was already struggling before the shutdown, and now $24 billion later, it’s probably going to be even more difficult to get humming again. One bright spot, many more full time jobs than part-time jobs are being created than previously thought, which is good and exposes a chink in the Obamacare-kills-jobs refrain. There’s lots of good summaries out there on the jobs report, but if you have time, I think you should go read it yourself.

Job lising of the month

I’m wrapping up my job-applying, at least for the big pre-December 1 deadline push, and am now mostly in the process of looking back at jobs I didn’t apply for in places I’d really like to live. Unsurprisingly, Denver is one of the places, and despite an apparent hiring spree by Colorado schools this year, I’m not a particularly good fit for the faculty positions that are open.

I’m curious, though, if there’s actually anyone who fits this University of Denver opening for an assistant professor of Economics: “Must show promise of distinction in research and publications in the fields of the Chinese economy, environmental economics, and feminist economics.” (emphasis mine.)

Not just heterodox, but feminist, examining questions of environment, and concentrated in an area where those that run the economy are largely indifferent to both feminist and environmental concerns. It kind of boggles the mind. I’m really curious to see who they end up hiring. In fact, I’d like to meet her; she sounds like a rockstar.

Job listing of the month

I’m late to this as the website was down yesterday and the first two weeks of school have taken up tons of my time, but today’s telling job posting comes from Facebook.

Facebook is seeking exceptional PhD-level graduates in the quantitative social sciences for analytical roles in support of its advertising business and products. Analysts develop expertise in Big Data analysis and of Facebook’s advertising operations and products to provide recommendations fueled by detailed analysis and thoughtful modeling of future scenarios. They work cross-functionally with Product, Engineering and Business teams and help shape the future of Facebook. Ideal candidates combine intellectual curiosity and analytical abilities with strong time management and communication skills and a passion for Facebook.

See! They are trying to make money. And they think that an economist should tell them how to do it.

Menlo Park wouldn’t be so bad, right?

Jobs, poverty and teen child-bearing

Several weeks ago, I printed out an NBER working paper on teen childbearing by Melissa Schettini Kearney and Phillip B. Levine. I had every intention of reading it then, but it just wasn’t going to happen at the end of this totally crazy semester. Since then, a few things forced my hand. I finished the semester (yay for surviving my first year of professoring!), the paper has been accepted for publication in the Journal of Economic Perspectives, Matt Yglesias put together a nice little review of the article in Slate, and a friend emailed me rather incensed by Yglesias’ review. From a quick scan of the JEP version, it doesn’t appear too much different from the NBER version, but my comments refer to the NBER version.

Yglesias’ review presents Kearney and Levine’s research as novel and surprising, but I think that misses the point. While the authors do a good job of aggregating statistics from several data sources and findings from different papers, the primary contribution of this paper is not novel, but rather confirming what we already know: that teen pregnancy is higher in the US than other places and; that poverty likely causes teen pregnancy more than teen pregnancy causes poverty. Past studies, cited in the paper, have shown that teen pregnancy has little to no effect on outcomes when you control for poverty, or within-family characteristics, and in some cases, may even result in better outcomes than if the teen hadn’t become pregnant. This is a significant theme in Edin and Kefalas’ ethnographic study, Promises I Can Keep, which I discussed here, and other research in fields such as sociology and demography.

Ultimately, the economics community thought it was an important paper as it went to a very prominent journal, but I really just see it as a good synthesis of what we know.

In related, and I think more exciting research, the link between poverty and teen child-bearing may be even tighter than suggested Kearney and Levine’s paper, though not in the way that the Kearney and Levine paper posit. A working paper by three Duke Sanford professors, Elizabeth Oltmans Ananat, Christina Gibson-Davis, and Anna Gassman-Pines examines the link between job losses and teen pregnancy.

I’m so predictable. I love this paper because even the anticipation of poverty, or joblessness, more specifically, predicts teen pregnancy rates. The authors show that when mass layoffs are announced in a North Carolina (before the layoffs actually occur), that county sees a subsequent corresponding reduction of births to teenagers in that county, but only for Black teenagers. The mechanism appear through both reduced pregnancy rates and reduced birth rates, which suggests that teens are both practicing safer sex and having more abortions when job prospects in their counties suddenly become dimmer.

There were a few places I thought the paper could improve, and the first one is my primary concern. Even though the authors find a statistically significant effect, I’m curious about the mechanism for how this affects teenagers. What evidence is there to show that teenagers would be affected by these job losses? Why aren’t they just in school and ignoring them? Initial information about their education level, school attendance, when they enter the workforce, etc, would be useful, to sell the story. I think the age and education of teens would be a big factor here. Wouldn’t you see a bigger effect for teens closer to graduation? Or a smaller effect in counties where teens are more likely to go to college (say wealthy Orange county, where Chapel Hill is located)?

The ability of inhabitants to migrate and commute is also problematic and suggests a (you guessed it!) spatial auto-correlation issue that I imagine is present. The authors claim they are underestimating the effects of job losses by ignoring migration and spillovers, but I wonder whether there are spillover effects that could be estimated through job loss in surrounding counties, rather than just say it’s a lower bound. Also, if spatial auto-correlation is present, that’s going to affect the standard errors, not just bias the estimates.
A minor, but I think incredibly important interesting, result is that the job losses also resulted in fewer black mothers reporting a father’s name on the birth certificate. The magnitude of the effect is approximately half of the effect of that on the pregnancy rate itself, which is pretty large. I think this result actually goes a long way towards answering my first question: Why do we think teenagers would be affected by this? If the story is that teens are being more careful about sex or having more abortions when their job prospects are low, is it really their own unemployment they fear, or also their partner’s? Teenage parents are less likely to be married than their older counterparts, so who is supporting them through their pregnancy? Paying for prenatal visits? Do teens feel they’re going to be working and raising their children? My own work shows that black mothers at any age are more likely to receive a promise of financial support and Edin & Kefalas suggest that the promise is key to the marginal have a baby (or at least stop trying not to have one) for mothers of low socio-economic status. I think this relationship could be teased out a little more.
All in all, it’s a good read, and presents an interesting counterpoint to the Levine and Kearney paper. L&K say poverty causes teen pregnancy, but the Duke paper says that teens are responsive to future job prospects, and respond by delaying (or at least trying to avoid) childbearing.
At first glance, the papers might seem incongruous, but it’s really a stock versus flows kind of issue. Other things equal, teenagers in poverty are more likely to become pregnant early due to a host of factors, but they still plan and have an idea about how they will care for the child. When that plan is disrupted, it appears it can affect some teens’ decision to bear children, on the margin.

Director of monetization: Economy 2.0?

About a year ago, a good friend of mine started developing an online gaming platform. The point was to create a place for several different game creators to host their games, increase their user base and allow for exchange of in-game currencies. We talked a lot about, and I thought even more about, how to create an in-game currency in a way that reflected use preferences, wouldn’t inflate or deflate too quickly, and ultimately, would earn my friend some real cash.

The platform is in beta now, and we never managed to formalize some of the things we’d hoped to test, but since then, we’ve exchanged lots of emails and articles about in-game economies, inflation, relative worth of found objects and more. Just last week, we had dinner and my friend asked whether I thought gaming companies employed economists to create in-game economies. Some, he contended, were incredibly realistic and well designed, others suffered from gluts of goods and all other sorts of problems. We got an answer fairly quickly. This month’s JOE (Job Openings for Economists) came out today and while flipping through it, I saw this notice, for a job at fiveoneninegames, looking rather conspicuous among the ads for financial analysts and visiting assistant professors.

The funniest part of all this, of course, is that I’ve never played one of these role-playing games. Bejeweled? Zuma’s Revenge? Sure, but I’m much more of a crossword and sudoku kind of girl. All the same, I’m really tempted to apply. Is that weird? The idea of having total control over an economy (even with a non random, selected set of participants in the game) sounds so appealing.

Okay, weird, I know. Back to running regressions.

A weak (or at least relatively weaker) recovery for women

As the job numbers for 2012 keep coming out, economists and pundits are heralding a recovery. Employment is increasing, the unemployment rate is falling, and monthly revisions to those numbers give even greater cause for optimism.

Economist Betsey Stevenson was quick to note about last month’s numbers that job leavers were overtaking layoffs. Even regular people (who don’t watch these numbers like a hawk and compete to be the first to tweet them) are becoming more optimistic. It takes guts to leave a job you don’t like; it’s a lot easier to do if you think there is another one down the line.

But just like the recession hit groups unevenly, so too is the recovery having differential effects. Notably, women aren’t going back to work as quickly as men. The Pew Research Center came out with a report today on minority groups. The whole thing is worth a read, but notably:

Men experienced greater setbacks in the recession, losing twice as many jobs as women from the fourth quarter of 2007 to the fourth quarter of 2009. In the recovery, however, men have gained four times as many jobs as women. The weakness of the recovery for women is underscored by the fact that they represent the only group among those examined in this report for whom employment growth lagged behind population growth from 2009 to 2011.

So, naturally, the question becomes why? Are women slower to return to work because there are fewer jobs available to them? Are they choosing to stay unemployed to remain at home with their families? Are they more picky about what jobs they should take having achieved some modicum of success before the recession?

I think it would be interesting to compare numbers for women in general and numbers for men with only a high school education–the group which is generally cited as having fared worst in the recession.

Update: Casey Mulligan of UChicago goes into the marriage aspect of the recession part of this phenomenon a bit more deeply over on the NYT Economix blog.

Why we educate women

The World Bank’s Development Impact Blog has recently been hosting guest posts from job market candidates in economics and a few days ago, Berk Ozler, a regular contributor, decided to synthesize some of the lessons from their papers and one by Rob Jensen (forthcoming in the QJE). With a brief mention of the fact that some are working papers, and certainly subject to change, Ozler concludes that we’ve been going about increasing women’s educational attainment in the developing world in the wrong way. Backward, he calls it. Instead of making it easier for women to go to school by providing school uniforms or scholarships or meals, we should be concentrating on changing women’s opportunities to work. If women see the possibility of work or higher wages or more openings, then they will likely demand more education for themselves or for their female children.

From a purely incentive-based approach, it makes perfect sense. If female children are likely to bring in earnings, particularly if they might be comparable to or even higher than their brothers, then parents have an incentive to educate female children. Higher earnings perhaps mean better marriage matches, but most certainly mean better insurance for parents as they age. Women with their own incomes can choose to take care of their parents.

From a feminist perspective, however, it’s a bit problematic. Such analysis implicitly values waged work over non-waged work, a problem inherent in many economics questions, most apparent in how we measure GDP. We know that increasing women’s education levels is valuable in and of itself, regardless of whether those women go on to work. More education for women means later marriage, lower fertility, reduced HIV/AIDS transmission, reduced FGM, and more.

It’s reasonable to think that regardless of how we set up the incentives–either by showcasing opportunity or reducing the immediate costs of schooling–all of these things will happen. And certainly job creation and the encouragement of seeking new opportunities to work is desirable. But if we choose to focus all of our resources on showcasing opportunity (particularly when it may set up unrealistic or very difficult to achieve expectations. note I haven’t read the Jensen paper yet), then we reinforce the idea that “women’s work”, or work in the home, is worth less than waged work.

In a world where a woman becomes educated in hopes of finding work, but doesn’t, how does that affect her ability to make household decisions? To leave an abusive spouse? To educate her own children, male and female, equally? Jensen’s paper seems to imply the very promise of women’s wages is enough to change bargaining power, but I wonder if that will stick. Does failure to find work, for whatever reason when it is understood to be the sole goal of attaining more schooling, affect women’s status?