“This is probably controversial to say, but what the heck, I’m in my second term so I can say it,” Obama said during a stop at the State University of New York at Binghamton. “I believe, for example, that law schools would probably be wise to think about being two years instead of three years because [….] in the first two years young people are learning in the classroom.”
In the third year, he said, “they’d be better off clerking or practicing in a firm, even if they weren’t getting paid that much. But that step alone would reduce the cost for the student.”
The Daily Dish reports on various responses to Obama's suggestion. For example, law professor Matt Bodiewonders if the change would really decrease costs:
Writing for the Wall Street Journal, Jeffrey Singer describes a patient who came in for a "simple outpatient surgical procedure" and discovered it was cheaper to just ignore his "low-cost 'indemnity' type of health insurance policy." The patient's estimated costs had he used his health insurance plan: approximately $20,000 (out of the estimated hospital charge of $23,000). After speaking to the patient, Singer realized that he wasn't bound by a "preferred provider" contractual arrangement and offered the patient a solution that saved him $17,000:
I explained that just because he had health insurance didn't mean he had to use it in every situation. After all, when people have a minor fender-bender, they often settle it privately rather than file an insurance claim. Because of the nature of this man's policy, he could do the same thing for his medical procedure. However, had I been bound by a preferred-provider contract or by Medicare, I wouldn't have been able to enlighten him....
Most people are unaware that if they don't use insurance, they can negotiate upfront cash prices with hospitals and providers substantially below the "list" price. Doctors are happy to do this. We get paid promptly, without paying office staff to wade through the insurance-payment morass.
So we canceled the surgery and started the scheduling process all over again, this time classifying my patient as a "self-pay" (or uninsured) patient. I quoted him a reasonable upfront cash price, as did the anesthesiologist. We contacted a different hospital and they quoted him a reasonable upfront cash price for the outpatient surgical/nursing services. He underwent his operation the very next day, with a total bill of just a little over $3,000, including doctor and hospital fees. He ended up saving $17,000 by not using insurance.
During recent recessions, worker productivity has actually risen -- but economists have been unsure if the result is driven by a changing workforce composition (i.e. more productive workers retaining their jobs) or an increase in effort and productivity on the part of individual workers. In a new paper (gated; working version here), called "Making Do With Less: Working Harder During Recessions," economists Edward P. Lazear, Kathryn L. Shaw, and Christopher Stanton find that it's the latter. Here's the abstract:
There are two obvious possibilities that can account for the rise in productivity during recent recessions. The first is that the decline in the workforce was not random, and that the average worker was of higher quality during the recession than in the preceding period. The second is that each worker produced more while holding worker quality constant. We call the second effect, “making do with less,” that is, getting more effort from fewer workers. Using data spanning June 2006 to May 2010 on individual worker productivity from a large firm, it is possible to measure the increase in productivity due to effort and sorting. For this firm, the second effect—that workers’ effort increases—dominates the first effect—that the composition of the workforce differs over the business cycle.
Women are not men, as we firmly established in a podcast earlier this year. A new working paper (abstract; PDF) by economists Peter J. Kuhn and Marie-Claire Villeval suggests one more difference between the sexes -- women may be more drawn to cooperation. Here's the abstract:
We conduct a real-effort experiment where participants choose between individual compensation and team-based pay. In contrast to tournaments, which are often avoided by women, we find that women choose team-based pay at least as frequently as men in all our treatments and conditions, and significantly more often than men in a well-defined subset of those cases. Key factors explaining gender patterns in attraction to co-operative incentives across experimental conditions include women’s more optimistic assessments of their prospective teammate’s ability and men’s greater responsiveness to efficiency gains associated with team production. Women also respond differently to alternative rules for team formation in a manner that is consistent with stronger inequity aversion.
Our recent podcast "Parking Is Hell" explored the high costs of free parking. Transportation scholar Donald Shoup described one study, from L.A.:
We made 240 observations. When you add it up, the average time it took to space was only three minutes, that’s two and a half times around the block, which doesn’t seem like very much. It’s about half a mile hunting for parking. But when you add up all the people who are parking in Westwood Village, if they had the same average that we had, that adds up to 3,600 vehicle miles of travel a day. That’s the distance across the U.S., and that’s just in the 15-block area of Westwood. If you add it up for a year, that’s equal to 36 trips around the Earth or four trips to the moon hunting for underpriced curb parking in a little 15-block area.
In South Korea, an oil company has started a campaign to reduce parking search time. The HERE campaign states that South Korean drivers wander 500 meters everyday for parking spots; by cleverly installing a balloon that indicates exactly where open spots are, it reduces search time for drivers.
A few years back, we did a podcast about the role of artificial insemination in the livestock industry. Writing for Modern Farmer, Jesse Hirschreports on what would happen if, for example, foot-and-mouth disease came along and wiped out American's entire population of cows, or pigs, or chickens:
Breathe easy, livestock lovers. Housed in a vast storehouse in Fort Collins, Colorado, the USDA has 700,000 straws of liquid nitrogen-preserved sperm, from 18 different species. They’re ready.
“Let’s say another foot-and-mouth disease comes along, killing off our cows,” says Dr. Harvey Blackburn, repository coordinator. “We have the ability to repopulate entire breeds.”
The National Animal Germplasm Program (NAGP) started in 1999. Its facility stores a huge mishmash of semen — rare and vintage samples, combined with the most common breeds on the market. Blackburn says the everyday strains are just as important as the heirloom semen, if not more so.
A new working paper (abstract; PDF) by Eric V. Edmonds and Maheshwor Shrestha analyzes whether schooling incentives (in the form of conditional cash transfers) effectively reduce child labor, which is a persistent problem in developing countries. Their conclusion: you get what you pay for. From the abstract:
Can efforts to promote education deter child labor? We report on the findings of a field experiment where a conditional transfer incentivized the schooling of children associated with carpet factories in Nepal. We find that schooling increases and child involvement in carpet weaving decreases when schooling is incentivized. As a simple static labor supply model would predict, we observe that treated children resort to their counterfactual level of school attendance and carpet weaving when schooling is no longer incentivized. From a child labor policy perspective, our findings imply that “You get what you pay for” when schooling incentives are used to combat hazardous child labor.
Ray Fisman and Tim Sullivan use the example of New York City's surprisingly efficient passport office to explore an interesting question: "Why do some government offices perform well and others poorly, even when they’re providing the same services and working with comparable resources?" Fisman and Sullivan think it's all about the management:
There’s an emerging body of research that chalks up these productivity gaps to the all-too-human ways that different companies (and divisions within a single organization) are managed. The fact that management matters—a lot—shouldn’t come as a shock to anyone who has ever worked under a good manager and also a bad one: Good managers coach, listen, support, and make their employees feel like they’re making progress. Bad ones don’t—often in uniquely horrible ways. And if this is true at for-profit companies, why wouldn’t it be true for branches of the government?
At the Hudson Street New York Passport Office, the management is Michael Hoffman:
At the crack of noon on Friday, ten hours after Colin Pither finished his 15th consecutive Grouse Grind and tied the record for climbs in a single day, he rose from bed and began his greasy road to recovery.
“I’m pretty destroyed. But I’ve eaten like 20 burgers, so I’m a little better now,” he said.
By Pither’s calculations, he burned about 11,000 calories yesterday as he hiked almost 50 kilometres up and down the mountain. The average daily caloric intake required for a male his age is between 2,500 and 3,000.
So it’s understandable he’s a bit hungry.
You can see in the photo what Pither's caloric intake of choice was.