Author: James Bailey

Benefit Cliff Data

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I said years ago on my Ideas Page that we need data and research on Benefit Cliffs:

Benefits Cliffs: Implicit marginal tax rates sometimes go over 100% when you consider lost subsidies as well as higher taxes. This could be trapping many people in poverty, but we don’t have a good idea of how many, because so many of the relevant subsidies operate at the state and local level. Descriptive work cataloging where all these “benefits cliffs” are and how many people they effect would be hugely valuable. You could also study how people react to benefits cliffs using the data we do have.

But it turns out* that the Atlanta Fed has now done the big project I’d hoped some big institution would take on and put together the data on benefits cliffs. They even share it with an easy-to-use tool that lets you see how this applies to your own family. Based on your family’s location, size, ages, assets, and expenses, you can see how the amount of public assistance you are eligible for varies with your income:

Then see how your labor income plus public assistance changes how well off you are in terms of real resources as your labor income rises:

For a family like mine with 3 kids and 2 married adults in Providence, Rhode Island, it shows a benefit cliff at $67,000 per year. The family suddenly loses access to SNAP benefits as their labor income goes over $67k, making them worse off than before their raise unless their labor income goes up to at least $83,000 per year.

I’ve long been concerned that cliffs like this in poorly designed welfare programs will trap people in (or near) poverty, where they avoid taking a job, or working more hours, or going for a promotion, or getting married, in order to protect their benefits. This makes economic sense for them over a 1-year horizon but could keep them from climbing to independence and the middle-class in the longer run. You can certainly find anecdotes to this effect, but it has been hard to measure how important the problem is overall given the complex interconnections between federal, state, and local programs and family circumstances.

I look forward to seeing the research that will be enabled by the full database that the Atlanta Fed has put together, and I’m updating my ideas page to reflect this.

*I found out about this database from Jeremy’s post yesterday. Mentioning it again today might seem redundant, but I didn’t want this amazing tool to get overlooked for being shared toward the bottom of a long post that is mainly about why another blogger is wrong. I do love Jeremy’s original post, it takes me back to the 2010-era glory days of the blogosphere that often featured long back-and-forth debates. Jeremy is obviously right on the numbers, but if there is value in Green’s post, it is highlighting the importance of what he calls the “Valley of Death” and what we call benefit cliffs. The valley may not be as wide as Green says it is and it may be old news to professional tax economists, but I still think it is a major problem, and one that could be fixed with smarter benefit designs if it became recognized as such.

Thanks to the Readers

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Bryan Caplan explains why blogging is his favorite way to write, even as someone who has published many articles and books. It’s because of the readers:

The blog posts, finally, are the most fun. Why? Because I can quickly make an original point. When I blog, I assume that readers already understand the basics of economics, philosophy, political science, and history. Or to be more precise, I assume either that (a) readers already understand the basics, or (b) are motivated enough to self-remediate any critical gaps in their knowledge. I also assume that readers already know the basics of my outlook, so I don’t have to constantly repeat repeat repeat myself. Finally, I assume that readers already appreciate me, at least to the extent of, “You’re often wrong, but reliably interesting.” So rather than spend precious time convincing readers that I’m worth reading, I can immediately try to convince them that the thesis of my latest post is important and correct….

In the spirit of Thanksgiving, I’d like to say that I owe almost all of this to you, my dear readers. You’re the people I wake up thinking about. You’re the people I hope to excite on a daily basis. You’re my sounding board, and my confidants. I owe you, big time.

I couldn’t say it better myself, so I’ll just leave it to Bryan.

Thanks to you all and happy Thanksgiving.

What Tariffs Mean For Your Finances

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That’s the title of a talk I’ll be giving Saturday at the Financial Capability Conference at Rhode Island College. Registration for the conference, which also features personal finance speakers and top Rhode Island politicians, is free here.

A preview: after many changes, the average tariff on the goods Americans import has settled in the 15-20% range:

If the tariffs stay in place, which is far from certain, this will represent roughly a 2% increase in overall costs for Americans (a ~17% tax on imports which are ~14% of the economy predicts a 2.4% increase, but a bit of that will be paid by foreign producers lowering prices).

This is bad for US consumers, but not as bad as the Covid-era inflation, and likely not as bad as our upcoming problems with debt and plans to weaken the dollar. It is more valuable for most people to make sure they are getting the personal finance basics right than to think about how to avoid tariffs, though they may want to consider investments that hold their value with a weakening dollar.

Do Required Personal Finance Classes Work?

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41 states now require students to take a course in economics or personal finance in order to graduate high school:

Source: Council for Economic Education

12 states representing 21% of US high schoolers passed mandates for personal finance classes just since 2022. This sounds like a good idea that will enable students to navigate the modern economy. But does it work in practice?

A 2023 working paper “Does State-mandated Financial Education Affect Financial Well-being?” by Jeremy Burke, J. Michael Collins, and Carly Urban argues that it does, at least for men:

We find that the overall effects of high school financial education graduation requirements on subjective financial well-being are positive, between 0.75 and 0.80 points, or roughly 1.5 percent of mean levels. These overall effects are driven almost entirely by males, for whom financial education increases financial well-being by 1.86 points, or 3.8 percent of mean financial well-being.

The paper has nice figures on financial wellbeing beyond the mandate question:

As soon as I heard about the rapid growth in these mandates from Meb Faber and Tim Ranzetta, I knew there was a paper to be written here. I was glad to see at least one has already tackled this, but there are more papers to be written: use post-2018 data to evaluate the new wave of mandates, evaluate the economics mandates in addition to the personal finance ones, and use a more detailed objective measure like the Survey of Consumer Finances.

There’s also more to be done in practice, hiring and training the teachers to offer these new classes:

our estimates are likely attenuated due to poor compliance by schools subject to new financial education curriculum mandates. Urban (2020) finds evidence that less than half of affected schools may have complied. As a result, our estimated overall and differential effects may be less than half the true effects

Economic Freedom Updates

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In September we covered the release of the Fraser Institute’s 2025 Economic Freedom of the World report. I said then:

The authors are doing great work and releasing it for free, so no complaints, but two additional things I’d like to see from them are a graphic showing which countries had the biggest changes in economic freedom since last year, and links to the underlying program used to create the above graphs so that readers could hover over each dot to identify the country

Well, now Matthew Mitchell of the Fraser Institute has done that:

I can only post a screenshot of a scatterplot here, but if you click through to the Fraser report you can hover over any dot to see which country it represents:

The Art of Spending Money

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The author of The Psychology of Money, Morgan Housel, has a new book “The Art of Spending Money” out this month. Its main point is that people tend to be happier spending money on things they value for their own sake- rather than things they buy to impress others, or piling up money as a yardstick to measure themselves against others (this is repeated with many variations).

Overall it is well-written at the level of sentences and paragraphs with well-chosen stories and quotes, but I’m not sure what it all adds up to. The main points seem obvious to me, though maybe that’s my fault for reading a book titled this when I’m already fairly happy with how I spend money. I think I err a bit on the frugal side, but I just don’t see many opportunities to turn money into happiness by spending it- I was maybe hoping for ideas on that front but I got none from the book. After reading it I don’t plan to do anything differently and don’t find myself thinking about spending differently.

Still, some highlights. The book is full of well-chosen quotes from others:

Continue reading →

LinkedIn is OK, Actually

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LinkedIn has its problems, but so does every other social network.

I joined LinkedIn out of college because it seemed like something you were supposed to do if you want a job someday, but I never checked it because the academic job market makes little use of LinkedIn. In 2013 LinkedIn added social media features like a newsfeed, but I still never spent time there. Facebook and Twitter seemed more interesting, and like many people I’ve always been allergic to “networking” or other social settings where one person is just trying to get something from another. It seemed like a recipe for posts that are cringe, soulless, or desperate.

But over the past couple years, I’ve found myself spending more time there- and not because I’m looking for a job or looking to hire. Some of the posts are genuinely interesting, and it is a nice way to keep up with what people I know are up to. Either LinkedIn got better or I got worse.

I find that LinkedIn is particularly good for staying in touch with my old students. I always told my students they could still e-mail me or stop by my office after the semester is over, but they almost never do; that takes a lot of thought and energy. Social networks are the ideal way to keep in touch with “weak ties“, but you have to find the right one. Facebook was the best for this when it was ubiquitous, but now it is becoming more common for Americans not to have or not to check Facebook, especially young ones (plus it was always a bit too personal for former students). Twitter has never been something that most people have, and the more popular networks are either too personal (Instragram, Snap et c) or too impersonal where almost all content users see comes from people they don’t know (TikTok, Youtube, et c).

LinkedIn by contrast is ubiquitous and just the right amount of personal. It also seems to be increasingly a good place to share interesting writing. I like much of what I read there, and my writing gets a good reception; I tend to get more engagement for EWED posts on LinkedIn than on X and Facebook despite having fewer connections there than Facebook friends or Twitter followers. Yes, you’ll still see some cringe posts there, but it beats the angry political posts that are ubiquitous on Facebook and especially X.

You can find me on LinkedIn here, if you dare.

A Better Man / A Better Woman

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There are 62 songs called “Better Man” just on Ultimate Guitar (which doesn’t claim to be comprehensive), plus many more slight variations like “A Better Man” or “Better Man Blues”. Some of these are obscure, but many are from well-known artists including Taylor Swift, Oasis, Ellie Goulding, Justin Bieber, and Pearl Jam; one by Robbie Williams inspired a major motion picture also called Better Man.

Meanwhile there is only one song on Ultimate Guitar called “Better Woman”, plus one variation (“A Better Woman”), both from artists I hadn’t heard of (Sera Cahoone and Beccy Cole). Why such an extreme difference?

Is it that men are the ones who are terrible and need improvement? Or are men the ones who see hope for improvement, while women can’t change or don’t want to? Let’s consider what the lyrics have to say about this. Reading though them all I saw a few recurring categories of “Better Man”:

Wish I Were Better: I count 33 of the 62 songs in this category. A man singing about how he wishes he were better, usually because of a woman, the classic “You Make Me Want to Be a Better Man“. Sometimes this is hopeful that he will be, sometimes regretful that he hasn’t been or despairing that he won’t be. Occasionally the inspiration to be better comes from someone other than a woman he’s in love with, such as Jesus, his dad, or his kids.

You Make Me Better: 13/62. Same idea as the last category, except the man has already become better. Again usually because of a woman, but sometimes because of someone else like God or his kids or his friends. Another 3 are a variation of this, I Got Better, where the man changed without anyone’s help or for a woman who isn’t convinced he really changed.

Wish You Were a Better Man: 4/62, but includes the hit by Taylor Swift. A woman wishes a man she loved were better. Another 2 songs including the Pearl Jam hit are a variant of this, Can’t Find A Better Man, where a woman stays with a bad man because she doesn’t see a better choice. Steven Seagal (yes, that Steven Seagal) reverses things and sings that a woman should leave him because she can do better. Then there’s 1 example of the genre where Hellyeah wishes his father were a better man.

One-offs: There are a few 1-off “Better Man” songs that seem to be in a category of their own: Beth Hart’s celebration of finding a better man, Ellie Goulding‘s odd insistence that “I’m the better man” (even though she’s a woman), and Ryan Innes’ entry which is the closest anyone comes to saying they wish they were a worse man. By the way, there appear to be zero songs out there called “Worse Man”- perhaps some day I’ll write one, but its a free idea and I’d be happy to see one of you beat me to it.

What about our 2 “Better Women”? Sera Cahoone’s song (the only one with the exact title “Better Woman”) is a standard “Wish I Were Better” entry, just as a woman (though the person she wants to be better for might still be a woman as usual):

So I step on up and be a better woman in your eyes
From now on I’m gonna love everything about you

Beccy Cole’s “A Better Woman” concludes that she doesn’t actually want or need to become a better woman:

I ain’t changin’ nothin’
Just to have your lovin’
Yeah, I’m alright with who I am
I don’t need to be a better woman – I just need a better man

The boring explanation for the gender discrepancy is that “Better Man” just scans better rhythmically. But I don’t think can explain a 60-2 (or 60-1 if we’re being strict) difference, and there seems the be a big underlying difference in the prevalence of these themes for men and women, not just titles. This matches up with the classic sayings from Camille Paglia:

A woman simply is, but a man must become

Or this one often attributed (probably incorrectly) to Einstein:

Women marry hoping that the man will change. Men marry hoping the woman will stay the same. Both are usually disappointed.

Whatever the cause, you can find the playlist I made of all 60 “Better Man” songs I could find on Youtube Music here:

I liked most of them (surprisingly given the range of genres and the fact that I hadn’t heard of most of the artists), but my favorite in this vein is to forget being a Better Man or Better Woman, and instead be “A Better Son/Daughter” like Rilo Kiley says:

Triumph of the Data Hoarders 2: The Institutions

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Datasets can be pulled offline for all sorts of reasons. As I wrote in February, this shows the value of being a data hoarder– just downloading now any data you think you might want later:

Several major datasets produced by the federal government went offline this week…. This serves as a reminder of the value of redundancy- keeping datasets on multiple sites as well as in local storage. Because you never really know when one site will go down- whether due to ideological changes, mistakes, natural disasters, or key personnel moving on.

The US Federal government shutdown this month provides another reminder of this. So far most datasets are still up, but I’ve seen some availability issues:

The good news is that a number of institutions have stepped up in 2025 to host at-risk datasets (joining those like IPUMS, NBER, and Archive.org that have been hosting datasets for many years, but are scaling up to meet the moment):

  • Restore CDC hosts all CDC data as it was in January 2025.
  • The Data Rescue Project provides tools and suggestions for how other institutions can save data at scale, plus links to other projects.

Everything Except Book Reviews

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For the last few years the blog Astral Codex Ten has run contests for the best reader-submitted book reviews. This year Scott mixed things up and asked people to review anything except books.

You can review a movie, song, or video game. You can review a product, restaurant, or tourist attraction. But don’t let the usual categories limit you. Review comic books or blog posts. Review political parties – no, whole societies! Review animals or trees! Review an oddly-shaped pebble, or a passing cloud! Review abstract concepts! Mathematical proofs! Review love, death, or God Himself!

The 13 finalists have a couple of entries on the sorts of things that are typically reviewed: a play, a food, a specific school. But most are pretty abstract or unusual as reviews go: like the general idea of school, dating men in the Bay Area, and fighting in the Russo-Ukranian War.

“This is not like Iraq” the Ukrainian recruiting officer soberly told me with a thick accent. “You have 50% chance of dying.” That wasn’t actually true, but it was a lot closer to being true than almost anything you can voluntarily sign up for in an organized way. I decided it was worth it.

Recommended, I thought several of the essays were excellent, voting goes through October 13th.