Reuven Brenner of The American explores the economic benefits of shortening college to three years:
Assume that after graduation the average salary would be just $20,000 and remain there. With 4 million students finishing one year earlier, this would add $80 billion to the national income during that year. Or at an average annual income of $40,000, it would add $160 billion. Assume now that the additional $80 billion in national income would be compounding at 7 percent over the next 40 years. This would then amount to an additional $1.2 trillion of wealth – for just one generation of 4 million students joining the labor force a year earlier at a $20,000 salary. At $40,000, this would amount to $2.4 trillion by the fortieth year – again, for just one generation of 4 million people joining the labor force a year earlier. The added wealth depends on how rosy one makes the assumptions about salaries or compounding rates. Add 10, 20, or 30 generations, each starting to work a year earlier, and the numbers run into the tens of trillions of dollars.
The indirect impacts may be as significant. One or two years of additional, compounding earnings could do a lot to shore up entitlement programs, with a more positive impact than requiring people 65 and older to stay in the labor force much longer: the magic of resulting compounding would start earlier.
(HT: The Dish)
Writing for Bloomberg, Chris Christoff and Greg Giroux explore the math behind gerrymandering in Michigan with some fascinating examples and graphics. The 14th congressional district, for example, looks pretty weird from high up:
From Detroit, one of the nation’s most Democratic cities, it meanders to the west, north and east, scooping up the black-majority cities of Southfield and Pontiac while bending sharply to avoid Bloomfield Hills, the affluent suburb where 2012 Republican presidential nominee Mitt Romney was raised.
(HT: The Big Picture)
1. Do customs and postal service discriminate against “atheist” parcels?
2. Now there are wristbands to monitor whether doctors are washing their hands. (HT: R.E. Riker)
3. Dan Ariely is offering a free online course: “A Beginner’s Guide to Irrational Behavior.” Sign up here.
4. Dan Pallotta argues that non-profits should be run like real companies.
5. A new study of English literature finds that the use of mood words is steadily decreasing.
The weather — its effects on the environment, behavior, sports, and society — has long been of interest to Freakonomics. Now a new working paper from Warren Anderson, Noel D. Johnson, and Mark Koyama explores the effects of cold growing seasons on discrimination against Jewish communities between 1100 and 1800:
What factors caused the persecution of minorities in medieval and early modern Europe? We build a model that predicts that minority communities were more likely to be expropriated in the wake of negative income shocks. We then use panel data consisting of 785 city-level expulsions of Jews from 933 European cities between 1100 and 1800 to test the implications of the model. We use the variation in city-level temperature to test whether expulsions were associated with colder growing seasons. We find that a one standard deviation decrease in average growing season temperature in the fifteenth and sixteenth centuries was associated with a one to two percentage point increase in the likelihood that a Jewish community would be expelled. Drawing on our model and on additional historical evidence we argue that the rise of state capacity was one reason why this relationship between negative income shocks and expulsions weakened after 1600.
This is a transcript of the Freakonomics Radio podcast “100 Ways to Fight Obesity.” [MUSIC: Jonathan Clay; “Carousel” (from Everything She Wants)] DUBNER: Steve Levitt is my Freakonomics friend and coauthor. He stands about 5-foot-11 and weighs 160 pounds. So he does not have a weight problem. But he has been thinking about our collective […] Read More »
This is a transcript of the Freakonomics Radio podcast “How Money Is March Madness?” Kai RYSSDAL: Time now for a little Freakonomics Radio. It’s that moment in the broadcast every couple of weeks we talk to Stephen Dubner, the co-author of the books and the blog of the same name. It is, yes, yes, it is […] Read More »
Economic analysis is itself value-free, but in practice it encourages a cosmopolitan interest in natural equality. Many economic models, of course, assume that all individuals are motivated by rational self-interest or some variant thereof; even the so-called behavioral theories tweak only the fringes of a basically common, rational understanding of people. The crucial implication is this: If you treat all individuals as fundamentally the same in your theoretical constructs, it would be odd to insist that the law should suddenly start treating them differently.
Cowen concludes by exploring a modern-day application of this putatively egalitarian core:
A distressingly large portion of the debate in many countries analyzes the effects of higher immigration on domestic citizens alone and seeks to restrict immigration to protect a national culture or existing economic interests. The obvious but too-often-underemphasized reality is that immigration is a significant gain for most people who move to a new country.