Gun policy, the achievement gap, and managing the Fed
A man inspects a sniper rifle.
The RAND Corporation has published a book-length literature review, The Science of Gun Policy: A Critical Synthesis of Research Evidence on the Effects of Gun Policies in the United States, by a team of 17 researchers led by Andrew R. Morral. Here are some main conclusions:
Conclusion 1. Available evidence supports the conclusion that child-access prevention laws, or safe storage laws, reduce self-inflicted fatal or nonfatal firearm injuries among youth. There is moderate evidence that these laws reduce firearm suicides among youth and limited evidence that the laws reduce total (i.e., firearm and nonfirearm) suicides among youth. … Conclusion 2. Available evidence supports the conclusion that child-access prevention laws, or safe storage laws, reduce unintentional firearm injuries or unintentional firearm deaths among children. In addition, there is limited evidence that these laws may reduce unintentional firearm injuries among adults. ... Conclusion 3. There is moderate evidence that background checks reduce firearm suicides and firearm homicides, as well as limited evidence that these policies can reduce overall suicide and violent crime rates.
Conclusion 4. There is moderate evidence that stand-your-ground laws may increase state homicide rates and limited evidence that the laws increase firearm homicides in particular. … Conclusion 5. There is moderate evidence that laws prohibiting the purchase or possession of guns by individuals with some forms of mental illness reduce violent crime, and there is limited evidence that such laws reduce homicides in particular. There is also limited evidence these laws may reduce total suicides and firearm suicides. ... Conclusion 7. There is limited evidence that a minimum age of 21 for purchasing firearms may reduce firearm suicides among youth. Conclusion 8. No studies meeting our inclusion criteria have examined required reporting of lost or stolen firearms, required reporting and recording of firearm sales, or gun-free zones.
Conclusion 10. Research examining the effects of gun policies on officer-involved shootings, defensive gun use, hunting and recreation, and the gun industry is virtually nonexistent. … Conclusion 11. The lack of data on gun ownership and availability and on guns in legal and illegal markets severely limits the quality of existing research. ... Conclusion 12. Crime and victimization monitoring systems are incomplete and not yet fulfilling their promise of supporting high-quality gun policy research in the areas we investigated. There’s also a nice accessible website with a summary of results and links to the more detailed studies https://www.rand.org/research/gun-policy.html.
Rand Corp. (2018)
The International Organization for Migration has issued the World Migration Report 2018.
The current global estimate is that there were around 244 million international migrants in the world in 2015, which equates to 3.3 per cent of the global population. … The great majority of people in the world do not migrate across borders; much larger numbers migrate within countries (an estimated 740 million internal migrants in 2009). ... Current data indicate that in 2016 there were 40.3 million internally displaced persons (IDPs) worldwide and 22.5 million refugees. Further, the total number of people estimated to have been displaced globally is the highest on record. ... Migration can generate very large benefits for migrants, their families and countries of origin. The wages that migrants earn abroad can be many multiples of what they could earn doing similar jobs at home. For example, a study conducted in 2009 found that the ratio of wages earned by workers in the United States to wages earned by identical workers (with the same country of birth, years of schooling, age and sex, and rural/urban residence) abroad ranges from 15.45 (for workers born in Yemen) to 1.99 (workers born in the Dominican Republic), with a median ratio of 4.11.
In addition to benefiting individual migrants and their families, there is a large research literature that evidences the wider beneficial effects that emigration can have for migrants’ countries of origin. ... Globally, remittances are now more than three times the amount of official development assistance. Migration can also result in the transfer of skills, knowledge and technology—effects that are hard to measure, but that could have considerable positive impacts on productivity and economic growth. … There is widespread agreement that migration can also generate economic and other benefits for destination countries. The precise nature and size of these benefits at a given time critically depends on the extent to which the skills of migrants are complementary to those of domestic workers, as well as on the characteristics of the host economy.
Richard Damania, Sébastien Desbureaux, Marie Hyland, Asif Islam, Scott Moore, Aude-Sophie Rodella, Jason Russ, and Esha Zaveri discuss Uncharted Waters: The New Economics of Water Scarcity and Variability.
The future will be thirsty and uncertain. … Projections suggest that by 2050, global demand for water will increase by 30–50 percent, driven by population growth, rising consumption, urbanization, and energy needs. At the same time, water supplies are limited and under stress from negligent management, growing pollution, degraded watersheds, and climate change. As many as 4 billion people already live in regions that experience severe water stress for at least part of the year. ... Water stress is emerging as a growing and at times underappreciated challenge in many countries of the developed and developing worlds. One in four cities, with a total of US$4.2 trillion in economic activity, is classified as water-stressed. Moreover, 150 million people live in cities with perennial water shortages, defined as having less than 100 liters per person per day of sustainable surface water or groundwater. In coming years, population growth and continuing urbanization will bring a 50–70 percent rise in the demand for water in cities.
Damania, et al. (2017)
Dan Andrews, Müge Adalet McGowan, and Valentine Millot confirm the worldwide zombie threat in “Confronting the Zombies: Policies for Productivity Revival.”
There is growing recognition, however, that the productivity slowdown experienced over the past two decades is partly rooted in a rise of adjustment frictions that rein in the creative destruction process. One important dimension of this phenomenon is that firms that would typically exit or be forced to restructure in a competitive market—i.e. ‘zombie’ firms—are increasingly lingering in a precarious state to the detriment of aggregate productivity. … Main findings are reported under two main headings. First, the paper provides evidence for the conjecture that weak firms are stifling productivity growth and highlights the considerable scope for raising growth by spurring the orderly exit or restructuring of such firms.
Second, it explores the potential for insolvency, financial and other reforms to revive productivity growth by addressing three inter-related sources of structural weakness in labour productivity: the survival of ‘zombie’ firms, capital misallocation and stalling technological diffusion.” OECD Economic Policy Paper #21, December 2017, http://www.oecd-ilibrary.org/economics/confronting-the-zombies_f14fd801-en. For a discussion of zombie firms in China, see “Resolving China’s Zombies: Tackling Debt and Raising Productivity” by W. Raphael Lam, Alfred Schipke, Yuyan Tan, and Zhibo Tan. “Nonviable ‘zombie’ firms have become a key concern in China. ... [T]his paper illustrates the central role of zombies and their strong linkages with state-owned enterprises (SOEs) in contributing to debt vulnerabilities and low productivity.
Andrews, et al. (2017)
Ted Gayer, Robert Litan, and Philip Wallach discuss “Evaluating the Trump Administration’s Regulatory Reform Program.”
It is fair to say that the Trump administration has launched the most ambitious regulatory budgeting program in human history—just a tremendous undertaking. Whereas Canada and the United Kingdom have managed to get their [regulatory reform] programs up and running with some success thanks to relying on relatively simple metrics of cost, in the United States the regulatory budget will attempt to get much closer to real social costs, at the expense of adding considerable complexity. That makes it potentially more meaningful and deep reaching, but also more likely to bog down and create a massive bureaucratic headache to go with those that already exist.
But if all that the Trump administration’s regulatory budget turns out to be is an elaborate moratorium on new actions, that would represent a missed opportunity for would-be deregulators. The whole purpose of instituting a forcing mechanism is to confront the problem of accumulated and outdated regulatory requirements that burden U.S. businesses, thereby freeing Americans’ energies for productive purposes and unleashing economic growth. If this administration’s initiative ends up being nothing more than a pause in further accumulation—of both good and bad prospective regulations—it would stand as a harsh judgment on the likelihood that existing regulation would ever be seriously reformed.
Gayer, et al. (2017)
Sarah Cohodes reviews the evidence on “Charter Schools and the Achievement Gap.”
The best estimates find that attending a charter school has no impact compared to attending a traditional public school. That might surprise you if you were expecting negative or positive impacts based on the political debate around charter schools. But using both lottery-based and observational estimates of charter school effectiveness in samples that include a diverse group of charter schools, the evidence shows, on average, no difference between students who attend a charter and those who attend a traditional public school. However, much of the same research also finds that a subset of charter schools has significant positive impacts on student outcomes. These are typically urban charter schools serving minority and low-income students that use a no excuses curriculum.
Attending an urban, high-quality charter school can have transformative effects on individual students’ lives. Three years attending one of these high-performing charter schools produces test-score gains about the size of the black–white test-score gap. … One charter school practice stood out: high-quality tutoring. … As a strategy to close achievement gaps, adopting intensive tutoring beyond the charter sector may be less controversial than focusing explicitly on charter schools.
Essays on a Theme
Simon Evenett has edited a collection of 15 essays in Cloth for Wine? The Relevance of Ricardo’s Comparative Advantage in the 21st Century. Evenett writes in the introduction:
Isaac Newton once wrote to a rival that ‘If I have seen a little further it is by standing on the shoulders of giants.’ Ricardo was such a giant, and it is testament to the enduring value of his insights that they remain the starting point for contemporary analysis of the world trading system. Given the overall goal of this volume is to assess the contemporary relevance of Ricardo’s writings on international trade on the 200th anniversary of the publication of his Principles, the contributions in this volume have been organised around three themes: our contemporary understanding of Ricardo’s insights and the manner in which they have been developed by researchers in recent years; the relevance of Ricardo’s analysis in a world trading system far different from one where cloth was exchanged for wine; and the contemporary relevance of Ricardo’s policy recommendations as they relate to rejecting protectionism in favour of unilateral free trade.
The Russell Sage Foundation Journal for the Social Sciences has published a double issue on the theme of “Anti-poverty Policy Initiatives for the United States,” which includes 15 papers with a wide range of concrete proposals. As one example, Luke Shaefer, Sophie Collyer, Greg Duncan, Kathryn Edin, Irwin Garfinkel, David Harris, Timothy M. Smeeding, Jane Waldfogel, Christopher Wimer, and Hirokazu Yoshikawa discuss “A Universal Child Allowance: A Plan to Reduce Poverty and Income Instability Among Children in the United States.”
Part of the reason that other nations have fewer poor children than the United States is that they provide what the OECD terms a universal child benefit—a cash grant that goes to all families with children. Austria, Canada, Denmark, Finland, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Sweden, and the UK have all implemented a version of a child benefit. Some call their measures child allowances (CA). Others implement their CA through the tax code as universal child tax credits. A notable feature of these universal child benefit plans is that they are accessible to all: families with children receive them regardless of whether parents work and whatever their income. The level of these child benefits varies by country. The benefit in U.S. dollars for two children in Belgium and Germany is about $5,600 per year; in Ireland $4,000, and in the Netherlands $2,400. Canada has a base child allowance, in U.S. dollars, of roughly $5,000 per child under six and $4,300 per child age six to seventeen.
Shaefer, et al. (2018)
Daniel McFadden and Kenneth Train have edited an 11-chapter book called Contingent Valuation of Environmental Goods. From their introduction:
Contingent valuation (CV) is a procedure that attempts to estimate the value to households of public goods. While CV can be used in many contexts, we consider its use for evaluating environmental goods. The method is implemented through a survey of households. … This book is born of our concern about the reliability of CV… There seems to be a view that supporting CV is pro-environmental and criticizing CV is anti-environmental. This is a deeply dangerous view. Importantly, results-driven science has an uncanny tendency to circumvent the instigators’ intentions. CV can indeed be used to claim large damages against responsible parties (RPs), which seems, in itself, to be a pro-environmental outcome. But CV is used for restoration programs as well as environmental injury, and it gives large benefits for restoration programs. This side of CV provides an incredible boon to RPs, by allowing them to pay off their debts to society at pennies on the dollar.
In benefit–cost analysis, CV tilts the calculations against large environmental improvements. Small measures with relatively little environmental impact (e.g., repairing 15 acres of reef) obtain higher benefit–cost ratios than larger projects with substantial impact (preventing another Gulf spill) because, by CV, the former have about the same benefit as the latter but cost far less. Recognizing CV’s unreliability—especially the form it takes—is not just scientifically responsible: it is ecologically responsible.
Talking with Prominent Economists
Anthony Barnes Atkinson and Nicholas Stern collaborated to produce “Tony Atkinson on Poverty, Inequality, and Public Policy: The Work and Life of a Great Economist.” Here are two lively snippets from Atkinson, among many. On how inequality was largely ignored for decades:
[C]learly, since about the early 1990s, I’ve been trying to get the government and other bodies to restore income distribution to being something that they actually publish data on. You have to remember, in this country—the UK—we dropped the income distribution statistics somewhere in the 1980s. After that, there were none. … The OECD, for example, after putting their toe in the water in the 1970s, didn’t return to the subject for another 20 years. So the report that I did with Tim Smeeding and Lee Rainwater in 1995 for OECD (Atkinson et al. 1995) was the first time they’d had a publication on income distribution for 20 years.” On understanding what’s behind the data: “I think the other thing is that our understanding of data on the more macro side is much inferior to what it was.
And I came across this when I wrote a review of how government output is measured, because the United States—still, as I understand it—measures government output according to the input. Some US economists say this is a general policy, but it is not; the European Union, and the UK as part of it, has been using an output-based measure for quite a long time. When we looked at this issue, we discovered that about half the difference in the recorded growth rates between the UK and the US was due to this difference in method.
Atkinson, et al. (2017)
The Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution hosted “A Fed Duet: Janet Yellen in Conversation with Ben Bernanke.” Here are some comments from Yellen:
So I guess what I do is I often compare the job of managing the [Federal Open Market] committee to the issue a designer would have to face who is trying to decide what’s the right color to paint a room. You have 19 people around the table, and you want to come up with a decision we can all live with on what color to paint the room. And we’d go around the table. Ben, what would you like? You think baby blue is just absolutely ideal. David, what do you think? Chartreuse you think is a lovely color. (Laughter) And we go around the room like that. And the question is, are we ever going to converge? I would feel my job is get everybody to see that off-white is not a bad alternative. (Laughter) As brilliant as your choice was, maybe you could live with off-white, and it’s not so bad. And we can converge on that and it’s going to function just fine and maybe we can agree. So I felt I was often trying to get the committee to coalesce and decide. We’d come up with a good option that we could all agree on.
Aaron Steelman has an “Interview” with Douglas Irwin.
Did protectionism foster U.S. economic growth and development in the late 19th century? I’m not convinced that we can attribute America’s industrial advance in the 19th century to high tariffs or protection. There are a couple points to make on this. ... A lot of the industrialization occurred prior to the Civil War, between 1840 and 1860 when we had low and declining tariffs. ... In addition, there are so many other things going on. We had open immigration, so there was a lot of growth in the labor force. We revamped our banking laws during the Civil War, finance became very important, and we got capital deepening. That’s not because of the tariff; that’s because the whole financial system of the United States was really developing. Another point to be made is that when you look at the high productivity growth sectors in the U.S. economy in the late 19th century, John Kendrick and others have shown they’re mostly in the non-traded goods, service sector. Transportation and utilities were growing very rapidly. It’s hard to see how the tariff would help the nontraded goods, service sector of the economy improve its performance. Also, Steve Broadberry has done some work showing that increasing productivity in the service sector was very important to the United States catching up with Britain in the late 19th century. That, too, doesn’t seem to be tariff related. All of this doesn’t lend itself to an easy story where the tariffs are the key factor behind U.S. growth and industrialization.
Federal Reserve Bank of Richmond (2017)
The Ellen MacArthur Foundation has published A New Textiles Economy: Redesigning Fashion’s Future.
[T]he way we design, produce, and use clothes has drawbacks that are becoming increasingly clear. The textiles system operates in an almost completely linear way: large amounts of non-renewable resources are extracted to produce clothes that are often used for only a short time, after which the materials are mostly sent to landfill or incinerated. More than USD 500 billion of value is lost every year due to clothing underutilisation and the lack of recycling. Furthermore, this take-make-dispose model has numerous negative environmental and societal impacts. For instance, total greenhouse gas emissions from textiles production, at 1.2 billion tonnes annually, are more than those of all international flights and maritime shipping combined. Hazardous substances affect the health of both textile workers and wearers of clothes, and they escape into the environment. When washed, some garments release plastic microfibres, of which around half a million tonnes every year contribute to ocean pollution—6 times more than plastic microbeads from cosmetics. Trends point to these negative impacts rising inexorably.
The Ellen MacArthur Foundation (2017)
Production of wild-caught fish in OECD countries is considerably below its peak in the late 1980s and continues to decline. … Global aquaculture production already exceeds the volume of catch from wild fisheries, if aquatic plants are included. Annual average aquaculture growth in OECD countries has accelerated and now averages 2.1% per year. Globally, it is even more rapid, at 6% per year. Moreover, average prices of aquaculture products are increasing.