Death and Taxes

In politics, death is a remarkably potent card to play. But its rhetorical power needs to be matched by a bit of substance. Every year, about 130,000 Australians die. Each of these deaths are tragic (I’m not saying this lightly – having attended the funeral of a young bloke last month). But it’s also a fact that because government is about one-third of the economy, and there are hundreds of deaths every day, government policies will invariably affect mortality. In some cases, government money can reduce the death rate. But plenty of other policies potentially increase the death rate. For example:

  • A motorway improvement that induces more people to drive can increase traffic deaths (though it could reduce them, if the earlier road was particularly unsafe).
  • A birth payment that increases the birth rate will probably also increase neonatal and postnatal deaths.
  • A government-funded fun run – like the City to Surf – can lead to additional deaths.
  • An expansion in the size of our military is likely to lead to more soldiers losing their lives in training exercises.

So yes, let’s focus on mismanagement, if it exists. But can we get away from the notion that additional deaths somehow prove that a minister or government is morally culpable?

The Ideas of March

On 20-21 March, the folks at ANU’s Manning Clark House are running the closest thing that Canberra has to a Festival of Ideas: a weekend event titled ‘Fair suck of the sauce bottle: a celebration of Australian language’. Teaser on their website, which promises more updates soon.

Gender and Competition

My AFR op-ed today is on gender and competition, writing up a series of recent research papers. It would’ve been too cumbersome to mention all the authors, but you’ll find the studies hyperlinked if you’d like to read the original research. Full text over the fold. And of course, please remember that authors don’t choose their headlines.

Continue reading “Gender and Competition”

Another interesting Joyce of words

From BusinessWeek:

Greek government bonds fell after Finance Minister George Papaconstantinou said his country is in a “terrible mess” and compared fixing the nation’s deficit to changing “the course of the Titanic.”

Of primaries and preselections

My friend Daniel Mulino – who did his PhD at the same time as me – is part of a unique Australian experiment. Daniel is one of three candidates in a US-style primary for the federal state seat of Kilsyth in Victoria (if you’re a Labor supporting living in the seat, you can register here). An article in the Age discusses the primary a bit more. It follows on the successful use of primaries by the UK Conservative Party in South Devon last year, and suggests that their use might grow in Australia in the future.

For my part, I’m waiting to see whether there’s a Labor preselection for the federal seat of Fraser, where Bob McMullan is about to step down after 22 years in parliament. If a preselection is held, I’ll throw my hat in the ring.

Permanent Income Inequality

I have a paper out, looking at income mobility from year to year, and how it affects estimates of inequality. One reason for writing the paper was to address the critique “sure, the US is unequal if you just use annual incomes, but it’s an extremely mobile society from year to year”. The abstract is below (click on the title for the full paper).

Permanent Income Inequality: Australia, Britain, Germany, and the United States Compared
Andrew Leigh
A common critique of most measures of income inequality, which are based on a single year’s income, is that they fail to take account of income mobility. If income fluctuations are large, and individuals can smooth consumption, then high inequality and high mobility may be no worse than low inequality and low mobility. To test this, I use panel data from four countries – Australia, Britain, Germany and the United States – and estimate measures of permanent income inequality that are based on income averaged over multiple years. I find that: (1) using pre-government income, annual inequality and permanent inequality have grown in Germany and the US, while post-government income inequality has grown in the US; (2) comparing levels of annual post-government income inequality across countries, the ranking was the US, Australia, Britain, Germany; (3) comparing levels of permanent income inequality across countries, the ranking of triennial post-government inequality in the most recent year was the US, Australia, Germany, Britain; (4) in the most recent year, the most mobile country was Australia, while the least mobile was Germany. However, as a comparison of points (2) and (3) demonstrates, mobility had little effect on the overall rankings.

For the data wonks, the paper was drafted before the HILDA-CNEF file was released, and I’ve never gotten around to updating it since then.

We’ll always have (the wrong number in) Paris

I blogged last year on the difficulty I’ve been having in getting the OECD to correctly quote a paper that I wrote on intergenerational mobility. Apparently my friendly ‘oops, you did it again’ emails don’t seem to have any impact. The OECD’s A Family Affair report yet again gets my estimate wrong – putting Australia as one of the most mobile nations in the OECD, rather than middle of the pack (if anyone in Paris reads my blog, here’s the final version of my paper: Australia’s intergenerational elasticity is about 0.25).

Not unreasonably, this has prompted a round of media articles here and overseas. Some of the writeups are very thoughtful – just a pity they’re based on a mistake by the OECD.

(xposted @

What’s the impact of raising the drinking age to 21?

I’m distracted by other things today, but couldn’t resist the PM’s call for evidence on the costs and benefits of raising the Australian minimum drinking age from 18 to 21. Here are 3 possibly relevant economics papers.

Continue reading “What’s the impact of raising the drinking age to 21?”

A randomised trial of mentoring programs for female faculty

A new US randomised trial suggests that mentoring programs can have surprisingly large effects:

Can Mentoring Help Female Assistant Professors? Interim Results from a Randomized Trial (unstable ungated link, stable gated link)
Francine D. Blau, Janet M. Currie, Rachel T.A. Croson, Donna K. Ginther
While much has been written about the potential benefits of mentoring in academia, very little research documents its effectiveness. We present data from a randomized controlled trial of a mentoring program for female economists organized by the Committee for the Status of Women in the Economics Profession and sponsored by the National Science Foundation and the American Economics Association. To our knowledge, this is the first randomized trial of a mentoring program in academia. We evaluate the performance of three cohorts of participants and randomly-assigned controls from 2004, 2006, and 2008. This paper presents an interim assessment of the programs effects. Our results suggest that mentoring works. After five years the 2004 treatment group averaged .4 more NSF or NIH grants and 3 additional publications, and were 25 percentage points more likely to have a top-tier publication. There are significant but smaller effects at three years post-treatment for the 2004 and 2006 cohorts combined. While it is too early to assess the ultimate effects of mentoring on the academic careers of program participants, the results suggest that this type of mentoring may be one way to help women advance in the Economics profession and, by extension, in other male-dominated academic fields.

What’s striking about this is that the intervention is only a 2-day workshop. I can’t quickly locate an up-to-date reference for the salary value of an top-tier publication, but let’s conservatively guess that it’s $100,000 of lifetime income. Given that participants are foregoing only a couple of days of their own time, that suggests they ought to be willing to pay at least $25,000 out of their own pockets to attend. (Naturally, this only works in partial equilibrium, since there are fixed number of articles published in top-tier journals each year.)

Miscellaneous links

Nearly every ranking of economics journals uses citations to measure and compare journals’ research impact. Raw citation data, however, include a number of factors that generally are thought to mismeasure impact. For example, under the view that a citation in a top journal represents greater impact than a citation elsewhere, it is usual to weight citations according to their sources. The most common means by which weights are derived is the recursive procedure of Liebowitz and Palmer (1984) (henceforth LP), which handles the simultaneous determination of rank-adjusted weights and the ranks themselves.

Alas, the lists to be used by the ARC in assessing research under the ERA (including the economics list) have eschewed this approach. Instead, they’re using the pre-1984 method of ranking journals by asking senior people in the field wot they reckon.