Author: Joy Buchanan

Day care and new pre-K findings

Joy BuchananLeave a comment

There was a buzz over a new study showing that pre-K is not necessarily good for children. It’s amazing how experts can be completely surprised by the results of a major study on an issue like pre-K education.* Noah Smith summarized the literature and thought through some policy implications. Emily Oster also just summarized the paper and points out that it provides almost no help for parents making decisions. **

I’ll offer some “amateur astronomer” observations about preschool and childcare.

What to call the daycare I patronize, since it offers all of the pre-K functions? I’ll call it Day-K. My kid comes home from Day-K with worksheets difficult enough for a kindergartener, but it was handed to a 3-year-old and the kid just scrawled a few lines of crayon across it. Most little kids aren’t going to retain material that is beyond their developmental level. Why bother printing these nice worksheets at all instead of just letting them color a bear?

Something that surprised me was how early kids can learn the alphabet and yet how disconnected that is from anything useful such as being able to read words. If a 2-year-old can do it (e.g. recognize “A”) then a 4-year-old can probably pick it up easily anyway.

Good private daycares in desirable urban areas are expensive but have unbelievable waitlists. Donald Shoup advocates that cities should charge more for parking. He reasoned that every city block should have an open parking space. Instead of spending valuable time circling like a vulture, you should just pay a lot of convenient parking or else know you will have to go somewhere else. Would the same logic apply to the good daycares? Should they not charge so much that there is always an open slot for the next parent who can pay? One issue with this from the daycare owner’s perspective is that they don’t want new kids cycling through constantly. A brand-new kid who does not trust the staff and has not learned the routine is a temporary disaster. I believe that the waitlists work because the owners want a predictable flow of great committed customers. By keeping fees low enough to have a long waitlist, they get good families to stay and they can easily fill any holes left by departures or dismissals.

If the program was free, I suspect that would change the dynamic inside compared to high-fee Day-K. Daycare kids are on a regimented schedule. Everyone thrives on the routine. The staff are happy when the kids know the rules. If people were coming and going unpredictably, that might make it harder for kids to learn.

Even under optimal conditions, there are scuffles at daycare. Being pushed down on the playground is often the only thing a kid will remember from a full day of “instruction”. How could pre-K actually negatively affect some kids, as the new study shows? One way I can think of is that the experience a good teacher tries to provide could be ruined by one kid who is loud or violent. If half of the classes are functioning as day care and having no impact at all on future outcomes and half of the classes have a kid hitting, then the average effect for all pre-K classes could be negative. The social environment of pre-K is probably highly variable. Sometimes you could get a great social atmosphere in which kids learn to share and sing. Sometimes the chaos level could make things difficult, I imagine. This is speculative. But I think it’s ok to speculate in the brainstorming period that should follow a surprising result.

Daycare centers have a fantastic physical environment. When I think of the returns to scale, the low table and chairs that fits the 3-year-olds perfectly comes to mind. A preschool classroom has a perfect bathroom with low toilets and sturdy step stools at the sinks. There is no heirloom China or nice upholstery in the room to worry about. There are dozens of age-appropriate toys and craft supplies can be bought in bulk. This physical environment allows kids to be creative and have fun. Adults don’t have to hover over them, afraid that they’ll hurt themselves or break something at any moment. By contrast, having a 2-year-old child roam my house was terrible. I kick myself for not making more up-front investments in kid-proofing and creating safe play areas. But it’s expensive and difficult for a parent to outfit their own home perfectly for each stage of development. The great thing about a daycare classroom for 3-year-olds is that it is perfectly fitted for 3-year-olds, because 3-year-olds will be cycling through it for the next decade. The physical scale factor makes me a daycare optimist for urban areas. However, as I wrote earlier, things could be trickier for low-density population areas.

The study has given us a lot to think about. I hope the research community can be helpful in continuing to figure out the puzzle.

One thing we can conclude, as Noah says in his blog, is that a compulsory university pre-K would be bad. Forcing families to send 4-year-olds to an institutional program (the way 5-16 kids are regulated) would be an expensive “own goal” policy. I don’t know of anyone seriously considering that, which hopefully means that nobody is.

* As a lab experimentalist, I’m used to being surprised by data. Check out this podcast just recorded with John List. He talks about surprising findings from field experiments. You never know until you run the experiment. Hence, my post in September about a rant about behavioral economics.

** Yesterday, Emily Oster announced that she is leaving Twitter because it had become a toxic place for her. You can still find her at substack, instagram, and other traditional publishing outlets (e.g. her books).

Modern loneliness in Toy Story 4 and Taylor Swift

Joy Buchanan4 Comments

I just saw Toy Story 4 (2019) because I’m a parent (don’t keep up with new releases – watch Pixar movies). The depiction of utter loneliness of the Gabby Gabby doll is one of the memorable parts of the movie. She knows that other people are experiencing human interaction, but she has none. Not a single human person notices her or needs her. Can you imagine that being the main plot of a movie made in 1940?

Loneliness is not completely new for humans. In the past, a lonely person might have had extra time to focus on nature, God, or books, or just immediate survival. Today, lonely people can be inundated with images of faces while also knowing that they have no real local friends. The Toy Story toys are like modern rich people in the sense that material survival is far from their minds. The toys can sit on a shelf for decades, awake and alone. No physical needs drive them out to a grocery store or into a service sector job. They have time to obsess over their social status, and the result can be tragic. (The fate of sitting on a museum shelf for years was discussed at length in Toy Story 2.)

Gabby Gabby reminded me of a bleak 2014 song by Taylor Swift called “Wildest Dream”. Swift sings as a female protagonist who sleeps with a handsome stranger knowing that he will leave her right afterwards. Here’s what she is hoping for:

I can see the end as it begins

My one condition is

Say you’ll remember me

Taylor Swift, 2014

She’s concerned that the man won’t remember the encounter at all. That is some malaise, yes? She has no hope at all for a lasting relationship. That is an illustration of one way that loneliness looks in the modern world.

From a male perspective, also in 2014, a similar sentiment is expressed in “Stay with Me” by Sam Smith.

I don’t want you to leave, will you hold my hand?

Again, the singer is asking for someone from a one-night stand to help fill a void of human connection instead of immediately leaving. Swift and Smith wonder aloud if there is some way to at least temporarily feel like they are close to another person.

These forms of loneliness in pop culture resonate with the public. Toy Story 4 yielded over $1B at the box office globally. “Wildest Dreams” was on music charts around the world. These forms are somewhat new, due to new technology and changing social customs. I’m not trying to write the next Bowling Alone (2000) in this blog post, but merely noting some current illustrations, inspired by Toy Story.

I bet a proper classicist could find us some illustrations of old-style loneliness. When I think of ancient loneliness, I think of to-be-King David hiding in desert caves trying to avoid being stabbed by a Bronze Age(?) sword. He chronicled some of those feelings as follows

Turn to me and be gracious to me, for I am lonely and afflicted. Relieve the troubles of my heart and free me from my anguish. … See how numerous are my enemies and how fiercely they hate me!

Psalm 25

David is lonely, but he’s also hiding from numerous nearby fierce enemies. So, it’s not exactly like Gabby Gabby who is sad that no one notices her at all. (In fact, maybe it puts our problems into some perspective.)

There is a recent 2020 New Yorker article, inspired by Covid lockdowns, on the history of loneliness. They consider the idea that this really is new. Maybe there would not have been a Gabby Gabby doll in ancient poems. As usual, economics is part of the story.

In “A Biography of Loneliness: The History of an Emotion” (Oxford), the British historian Fay Bound Alberti defines loneliness as “a conscious, cognitive feeling of estrangement or social separation from meaningful others,” and she objects to the idea that it’s universal, transhistorical, and the source of all that ails us. She argues that the condition really didn’t exist before the nineteenth century, at least not in a chronic form. It’s not that people—widows and widowers, in particular, and the very poor, the sick, and the outcast—weren’t lonely; it’s that, since it wasn’t possible to survive without living among other people, and without being bonded to other people, by ties of affection and loyalty and obligation, loneliness was a passing experience. …  to be chronically or desperately lonely was to be dying. The word “loneliness” very seldom appears in English before about 1800. 

The New Yorker, 2020

Lastly, Mike wrote a great piece on loneliness in art last year. He even introduced a formal economic model!

Pledging for effective altruism

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I attended an administrative board meeting for a large local nonprofit organization this week. The report from the finance committee included a comment that our “giving” is up while “pledging” is trending down. People are giving money when they feel like it or when they have extra money.*

However, the finance committee wishes that more people would pledge their giving at the beginning of the year, so that the organization can plan ahead. They are trying to make an operating budget and want to make promises to the staff. It’s nerve-wracking to plunge into the year with no idea how the whims of thousands of people will affect the final revenue a year from now.

I don’t have any sources for this, outside of the representative’s report this week. They said that nonprofits all over the country are seeing a decline in pledges and an increase in (impulse) giving.

I am looped into niche online chatter about Effective Altruism. “You should give money for malaria instead of re-painting a lobby in America.” Fair enough. Most Americans don’t subscribe, and I’m not trying to make a case for the malaria pills right now.

What about giving to the same causes you already give to, in a new way? Make a pledge. If you lose your job or cannot pay, then there is no consequence. It’s not a legal contract. It’s just an indication of your intentions that helps leaders plan.

Millennials just recently outnumbered Boomers as the nation’s largest living adult generation. Trends in anything adults do are likely to be “generational shifts” for the next few years. I suggest to my fellow Millennials that your money can be spent more effectively by the nonprofit sector if you commit proactively instead of reacting to crises. See if the groups you give to allow for pledging.

Lastly, I’d like to brag about my group for pivoting this January to provide for new Afghan refugees in Birmingham. Having extra money on hand from record 2021 revenue helped make that possible.

… and finally, pledging could be a good topic for economists to look at.

*New papers on giving after windfall income bumps are here (published) and here (working).

What we pay for the thing that some workers do that most people do not

Joy Buchanan2 Comments

In middle school, I broke my leg in a soccer tournament game. I needed to go to the hospital and get extra support for the next month. Some of the workers who helped me were not highly paid, but my value of their services was very high.

Why bring this up? There has been conversation about the label “low skill” work this week. Brian Albrecht summarized the debate. Brian tangentially mentioned the “diamond-water paradox,” but I think it is worth talking more about that. Economists have a few models and stories that change the way you think about the world.

When I teach Labor Economics, we read an excerpt from Average is Over and then I explain the diamond-water paradox in class. I ask the students why diamonds cost more than water, even though water is more important. The answer can help us understand how wages get set for human workers (I say “human” because by that time we are deep in the topic of robot workers as substitutes).

I tell my students that some of the low-pay work performed by humans is extremely important. I’m still looking for the perfect illustration here. The one I use goes something like this, which is related to my broken leg anecdote… imagine if you tripped on train tracks and couldn’t get yourself out of the way of an oncoming train. How much would you pay a human to haul you to safety? Almost any human could perform the task. That service would be as valuable as a glass of water if you are about to die from thirst, which is to say that your value for it is almost infinite.

The key to understanding the market price of cleaners as opposed to the high wages for repairing Facebook code is marginal thinking. There is a lot of water, so the next glass is going to be cheap.

In writing Average is Over, Tyler Cowen is trying to understand why wages for the-less-highly-paid-skills have stagnated recently, while wages for the-highly-paid-skills are increasing along with GDP. He brings computers and technology into the conversation, as one culprit for recent changes. There is a limited supply of humans who can show up to a tech job and contribute reliably. “Programmers” are not the only highly paid class of workers, but it’s easy to see that the supply of people who are proficient with Python is limited.

I see two opposing forces in the tech world, which I have been following for a few years. First, we have boot camps, code clubs and all kinds of resources to both equip and encourage people to go into tech. I volunteer to advise a club that provides resources for female college students taking a technical route. On the other hand, lots of people who do get a foot into the door of a tech company become upset and quit.

Here is a quitter (a twitter quitter?):

https://twitter.com/krotondo/status/1427434279408062467

You can read about this specific situation at this woman’s website. It seems like she made the right choice for herself. She is actually on a mission to change tech for women. I’ll reproduce the text here, in case someone can’t see the tweet: “first day at my new job! i am now a ceramicist because it lets me have no commute, make my own hours, decide the value of my work, and bring people joy. make no mistake, i wanted to code, but tech fulfilled none of that. so i hand off the baton. please fix tech while i make pots!”

The point is that she is one of many people who have dropped out of the tech workforce. Those employees who remain are pushed up toward the “diamond market price” and away from the “water market price”. Here is a blog about “burnout” survey data from 2018.

Populations in rich countries are not growing and labor force participation is down. Could the market wage for lower-skill-requirement jobs in the US rise dramatically in the next century, or at least keep pace with the wage increases that were recently enjoyed by those-with-the-capabilities-that-are-highly-valued? Marginal utility still apply, but prices will change if supply shifts.

See my old blog about Andrew Weaver who is researching skills that are in demand.

Remittances Eye-tracking Experiment: Meet the authors and paper

Joy Buchanan1 Comment

I am pleased to have been asked to discuss a paper in an ASHE (American Society of Hispanic Economists) session at the 2022 AEA meeting. Our session is “Hispanics and Finance” on Sunday January 9 at 12:15pm Eastern Time.

The paper is “Neuroeconomics for Development: Eye-Tracking to Understand Migrant Remittances”. Here is a bit about each author. Meeting in person is a benefit that I miss this time, since the meeting is virtual.

Eduardo Nakasone of Michigan State University has several papers on information and communication technologies and agricultural markets. I pondered this sentence from one of his abstracts, “Under certain situations, ICTs can improve rural households’ agricultural production, farm profitability, job opportunities, adoption of healthier practices, and risk management. All these effects have the potential to increase wellbeing and food security in rural areas of developing countries. Several challenges to effectively scaling up the use of ICTs for development remain, however.” His prior work on ICTs is relevant to the paper at hand, which is about how migrants utilize information about remittance tools.

Máximo Torero is the Chief Economist of the Food and Agriculture Organization (FAO). He has worked on development and poverty in many capacities including at the World Bank.

Angelino Viceisza, an associate professor at Spelman College, is doing interesting work at the intersection of Development and Experimental Economics. Here is his 2022 paper (Happy New Year!) published in the Journal of Development Economics.  

I am discussing their paper on how migrants choose financial services. The pre-analysis plan is public. Remittance sending is important for migrants and for the entire world economy. The authors remind us that a significant chunk of what migrants earn is “lost” to service fees. The authors are examining how migrants incorporate new information about competitive alternative services.

Some neat aspects of their work:

  • Their subject pool is migrants who send remittances, recruited in the DC area.
  • Like most experiments I am used to, the stakes are real and significant.
  • Not only can they observe which service is selected, but by using eye-tracking they can get a sense of what information was salient or persuasive.

It is potentially a big deal for migrants to compare services more rigorously and switch providers more readily. The internet, as least in theory, makes it easy to find information on transaction fees. Policy makers have even proposed subsidizing websites that compare the fees of money transfer operators (MTOs). The authors are trying to understand how such a website might impact behavior. A basic question is: does information in this format affect behavior? A small change in behavior could have a huge impact on the world economy and recipient countries. Imagine if a country currently receiving a billion dollars in remittances had 1% more next year because migrants switched to a more efficient service. Might it be cheaper to nudge people toward low-fee services than to send foreign aid?

Their experiment will reveal whether people make switches based on new information, and it also helps us start to understand which attributes of MTOs migrants consider. Their design includes a treatment manipulation that sometimes emphasizes either transfer speed or user reviews.

If you have read this far hoping for a summary of their results, I will disappoint. Their paper is not public yet and data is still being analyzed. I can say that migrant subjects do sometimes switch their choice of MTO, based on information, in some circumstances. They are more likely to make a switch when the induced stakes are higher. If you tune into the session tomorrow, you will get to hear a summary of preliminary results by the author (not free to public, requires conference registration).

Fiction for Christmas

Joy Buchanan1 Comment

I hacked Christmas this year to get two books I had been hearing about from reviewers and friends: Project Hail Mary and My Struggle by Knausgård. I wrapped the sci-fi one for my husband, because he will like it. I handed the weird one to him and asked him to wrap it for me. I killed many birds with one stone. The people who read econ blogs will appreciate my accomplishment.

Right after Christmas I had a plane trip that provided some reading time for My Struggle. I like it. As a warning to others, I wonder if the reason “everyone” thinks it is so relatable is that the types of people who review books share the author’s burning desire to be a writer.

Continue reading →

Will we repeat the Christmas Covid wave?

Joy Buchanan2 Comments

EDIT at 7pm, same day as posting: You know you have good friends when someone quietly emails you and tells you that the news about Omicron just got much worse and you should probably edit your post. I’ve been trying to rationalized why this January will be better than last January. Of course if it were not for Omicron, I would expect very little from holiday gatherings among mostly-vaccinated Americans. However, having known Omicron was looming, I probably shouldn’t have even tried to speculate. Get your booster and be prepared to hunker down in January if the 2-3 week data indicates that infections are turning extra-lethal. </edit>

In keeping with the “dismal science” brand, let’s dwell on the horrible death toll of the January 2021 Covid wave in the US that followed the Christmas holiday. Here comes Christmas (and other winter holidays) again, a major public health event.

https://www.cnbc.com/2021/01/27/us-reports-record-number-of-covid-deaths-in-january.html

This graph I borrowed from CNBC shows how fast deaths spiked up after the winter holidays of 2020. See also https://data.cdc.gov/.

According to Google search auto-complete, the public is more interested in whether there will be another Christmas Prince movie than whether there will be another Christmas Covid death wave.

I think it’s unlikely that we will see a repeat of exactly what happened last year. I’ve been looking online for predictions and mostly I have found articles warning that Omicron will cause a some kind of wave. No one wants to commit to predicting how many people will die, because anyone who tries is sure to be wrong. The consensus is that breakthrough infections are likely but that vaccines protect against extreme illness.

Nearly a million Americans have died from Covid already (Jeremy argues for a million). Some of those deaths, in retrospect, can almost certainly be tied to family travel during the holidays in 2020. The January Covid wave has only happened once, so it’s impossible to predict what will happen this time. Unfortunately we may get an interaction from increased holiday travel plus a novel highly infectious variant.

The Omicron variant is spreading fast, but no one knows if it will be worse than we we are currently dealing with from Delta. It seems like triple-vaxxed people are not at high risk, from preliminary data. That is reassuring to me personally. Thank you South Africa for being fast and sharing data with the world. For communities with low vaccination rates, it seems certain that more deaths will result from fast-traveling Omicron. Yet, from my reading this week, it is hard to know if it’s really much worse than what they are currently experiencing from Delta.

I’m keeping a Twitter thread going of what other people are saying. Caleb Watney points out that we have two things going for us. Widely available vaccines keep people safer from infection and reduces the chance of needing medical treatment. Secondly, we have gotten better at treating the disease. Together, that should mean less deaths in January 2022, as long as people seek treatment quickly and hospital capacity does not become a limiting factor. Omicron could multiply cases so quickly that we can’t apply all our best treatments to everyone. That is the biggest reason to worry.

Even though people will be less cautious about winter holiday travel this year than they were last year, the country has been open for many months now, including the recent Thanksgiving holiday. The vulnerable population this time should be smaller, in terms of the people likely to die from Omicron.

To say that we won’t blindly exactly repeat the biggest mortality event of my lifetime is not “optimism”. It seems like this January will not be as bad as last January for the reason Watney states: better medical tech on hand, most importantly vaccines for prevention.

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Watching Get Back

Joy Buchanan5 Comments

I enjoyed watching Get Back, the new documentary about making a Beatles album. Sometimes I skipped over rehearsal scenes. The streaming format allows you to treat Get Back like a coffee table book, if you choose, as opposed to a feature film that you watch all the way through in one sitting.

I know very little about The Beatles, aside from recognizing their hit songs. Here are my impressions after watching most of Get Back.

Paul McCartney is a rock star. His hair could have its own line in the closing credits. When Paul goofs off, he appears to be entertaining his bandmates because he loves playing for any audience. Conversely, John Lennon seems to joke around because he does not take their music seriously. Paul is motivated to make the Beatles excellent. Ringo’s ability to show up and be quiet is almost as important as Paul’s ability to lead.

I’ll put up my tribute. Then I’ll add more casual observations.

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Getting hired by a bot is unsettling

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Samford student Savanah Needham identified an interesting recent WSJ article about the use of AI in hiring. Savanah writes:

In The WSJ, we learn that AI is being used for hiring employees rather than a traditional hiring manager, thus job applicants fear that they must impress a robot instead of relying on human interaction to get their dream job. The writer argues that job applicants deserve to know ahead of time how the algorithm will judge them and ought to receive feedback if they are rejected. Her proposal highlights the uncertainty that job candidates face in the newly AI-augmented hiring world.

We desperately need such a system. AI’s widespread use in hiring far outpaces our collective ability to keep it in check—to understand, verify and oversee it. Is a résumé screener identifying promising candidates, or is it picking up irrelevant, or even discriminatory, patterns from historical data? Is a job seeker participating in a fair competition if he or she is unable to pass an online personality test, despite having other qualifications needed for the job?

Julia Stoyanovich, WSJ

Robots can look at social media postings, linguistic analysis of candidates’ writing samples, and video-based interviews that utilize algorithms to analyze speech content, tone of voice, emotional states, nonverbal behaviors, and temperamental clues (HBR 2019). In just a few quick seconds, AI uses all the data it has on you to jump to conclusions. AI uses tools that claim to measure tone of voice, expressions, and other aspects of a candidate’s personality to help “measure how culturally ‘normal’ a person is.”

You spend a large amount of time proving to employers that you are not like the others, you’re different/better than other candidates…but now we need to try and convince a robot that we are “normal.”  

Researchers predict that face-reading AI can soon discern candidates’ sexual and political orientation as well as “internal states” like mood or emotion with a high degree of accuracy. This can be worrisome if the face reader claims that one is “too emotional” or assigns someone to a certain political party.