Category: Economics

City rebuilding costs from the Halifax explosion

by philg

Catching up on 2017 must-reads for Bostonians, I recently enjoyed The Great Halifax Explosion: A World War I Story of Treachery, Tragedy, and Extraordinary Heroism by John U. Bacon.

The main story is familiar, but worth retelling.

All explosives require two components: a fuel and an “oxidizer,” usually oxygen. How destructive an explosive is depends largely on how quickly those two combine. With “low explosives,” like propane, gasoline, and gunpowder, it’s necessary to add oxygen to ignite them and keep them burning. If a fire runs out of oxygen, it dies. Another factor is speed. The rate of the chemical reaction, or decomposition, of low explosives is less than the speed of sound, or 767 miles per hour. In contrast, a “high explosive” combines the fuel and the oxidant in a single molecule, making each one a self-contained bomb, with everything it needs to create the explosion. To ignite, a high explosive usually requires only extreme heat or a solid bump. Once started, the dominoes fall very quickly, ripping through the explosive material faster than the speed of sound.

“She had a devil’s brew aboard,” Raddall states of the Mont-Blanc, a perfect combination of catalysts, fuel, and firepower. The ship’s manifest included 62 tons of gun cotton, 250 tons of TNT, and 2,366 tons of picric acid, the least understood of the chemicals on board, but the most dangerous.

After the shipwrights had so carefully built the magazines, hermetically sealing each compartment, and the stevedores had packed it all systematically, the French government agent operating out of Gravesend Bay received a last-minute order from his superiors in France to pack what little space remained on Mont Blanc with urgently needed benzol, an unusually volatile fuel, the latest “super gasoline.” The stevedores followed orders, swinging 494 barrels containing 246 tons of the highly combustible accelerant into a few unused spaces belowdecks, on the foredeck, and at the stern, where they stacked the fuel three and four barrels high and lashed it with canvas straps, a somewhat slapdash approach compared to the thoroughness with which the shipwrights had built the magazines. When the crew walked past the drums on deck, they could smell the unmistakable reek of the benzol. With the final addition of the benzol, Mont Blanc now carried an impressive array of the most dangerous chemicals known to man at that time. While benzol can’t match the pure power of gun cotton, TNT, or picric acid—all high explosives—what the stevedores probably didn’t know when they stacked the barrels of benzol on deck was that the airplane fuel needed only a spark to ignite, while picric acid doesn’t explode until it reaches 572 degrees Fahrenheit, and TNT does not detonate until it reaches 1,000 degrees. But by making the last-minute decision to store most of the fuel on the deck and the TNT and picric acid below, the crew had unwittingly constructed the perfect bomb, with the easy-to-light fuse on top, and the most explosive materials trapped in the hold below.

Canada had a much larger stake in the war than did the U.S.:

Halifax sent 6,000 sons to the Great War, roughly a quarter of its male population. It seemed almost every home had sent a brother, a husband, a father, or a son. The Great War drained the town of its able-bodied young men and left behind women, boys, girls, and men too old or infirm to fight.

One question worth pondering is why more people didn’t chicken out and escape to the U.S. They knew what the trenches were going to be like:

When fresh recruits got to Halifax, they frequently made a beeline for any place that sold alcohol, where they met soldiers who had been recently discharged, were on leave, or were about to head back to the trenches. They told the recruits stories so horrifying that they might have been tempted to think they were exaggerating. The experienced soldiers knew the average infantryman lasted only three months before getting wounded or killed, so they were determined to make the most of their time on the safe side of the Atlantic. Their hard-earned fatalism fostered a devil-may-care disposition and all the elements that came with it, including scores of prostitutes from across Canada and bootleggers so fearless that they set up shop in the downtown YMCA—which was probably not what the YMCA’s benefactor, Titanic victim George Wright, had had in mind when he wrote his will. During the war years, Halifax experienced a spike in venereal disease and out-of-wedlock births. Local orphanages had to expand.

The Mont-Blanc makes it from New York to Halifax without incident, but before the sailors can go to the YMCA for a drink, there is a low-speed collision with another ship. The author describes the impact that resulted in the explosion as entirely the fault of the Imo‘s captain and pilot (see Wikipedia for a quick summary, but I highly recommend this part of the book). More than 10,000 people were killed or wounded. The book covers this staggering tragedy, but this post is about the physical destruction and the estimated cost of rebuilding:

The explosion destroyed 1,630 buildings and damaged 12,000 more, leaving some 25,000, almost half the population of Halifax-Dartmouth, without adequate housing and dangerously exposed to the elements.

After the fires had been extinguished and the wounded tended to, Colonel Robert S. Low assembled an army of carpenters, masons, plumbers, and electricians to rebuild the city, which had incurred more than $35 million in damages in 1917 U.S. dollars, or $728 million today.

It cost only $728 million to rebuild a whole section of a city. Our town will soon spend $110 million to renovate/rebuild a school that can hold only about 600 students. I talked with a guy recently who is involved in a $1.5 billion project to create 2,700 “affordable” apartments here in the Charlestown section of Boston (story). That’s $555,555 per apartment (less than 1,000 square feet on average) on land provided for free (city already has a housing project on the same footprint). Presumably these will be higher quality than whatever was built in Halifax in 1918.

[Note: poor people who are selected by the housing ministry to move into one of these apartments would actually be rich almost anywhere else in the world if they could only get their hands on the $555,555 capital cost as a direct grant instead of as an in-kind service! If they could also get their hands on the monthly operating cost and combine that with interest on the $555,555 they would be able to enjoy, without working, a middle class or better lifestyle in many of the world’s beach destinations.

How about folks who work at the median wage? That’s about $23/hour in Massachusetts (BLS) or $46,000 per year. NerdWallet says that someone earning this much in MA can afford a $258,500 house if he or she has saved $60,000 for a down payment, has a top credit score, and spends $0/month on food and other non-housing expenses. Zillow says $274,416 on a nationwide basis. So a dual-income couple in which both partners earn the median wage wouldn’t be able to afford one of these units without a taxpayer subsidy, even if land were free and the unit were sold at zero-profit construction cost. The U.S. has apparently become a society in which Americans can’t afford to live like Americans!]

Maybe costs are lower up in Canada? Yes, but only a little:

Instead of drifting back into another long sleepwalk, Halifax has been accelerating, spending $11.5 million in 1955 to build its first bridge across the channel, another $31 million to build the second, right over the Narrows, and another $207 million in 2015 to raise the first bridge a few meters so container ships could get all the way to a dock in Bedford Basin. The city has spent $350 million to build a boardwalk along the bay and $57 million for a shiny new library downtown, an architectural centerpiece CNN judged to be the ninth most beautiful library in the world.

How about some other costs? A survivor of the explosion gets “$100 to enroll at the University of Michigan in 1919”. That’s $1,500 in today’s money, less than 1/30th of current tuition. He marries an American (same word “marriage” used, but really a different activity in those days before no-fault divorce):

Shortly after that invitation, Barss asked Helen to marry him. She said yes, but asked him to keep it between them until February, “so that if either of us wanted to get out of the deal, no one would be hurt.” Further, if Barss’s professors found out he was getting married, which med school students were forbidden to do, he could be expelled. “My father liked Joe & asked if he were a Republican or a Democrat,” Helen wrote. “He said he was a Canadian and voted for the man—Father said ‘If you ever live here and have anything or hope to have anything, you’ll be a Republican in self defense.’ ”

Maybe it is good that this guy died before Elizabeth Warren and Alexandria Ocasio-Cortez proposed their latest tax plans!

I found the numbers in the book sobering. If we wear down the infrastructure that we have or if perhaps it is destroyed for some reason, it doesn’t seem as though we could afford to rebuild it.

More: Read The Great Halifax Explosion: A World War I Story of Treachery, Tragedy, and Extraordinary Heroism

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Immigration is the Reverse Black Death?

by philg

Let’s consider the political goals of righteous Americans today:

  • higher wages for the average person
  • an improved environment with less human impact on the land
  • less concentration of wealth in the hands of real property owners
  • more affordable housing for the working class

While listening to An Economic History of the World since 1400 by Professor Donald J. Harreld, I learned that all of the above goals were achieved in the 14th century via the Black Death, which reduced the European population by approximately one third.

  • wages for workers, including unskilled agricultural workers, increased as much as 40-50 percent
  • food prices fell
  • land and housing prices fell
  • the least productive farmland was allowed to return to natural forest (contrast to conditions before, from the course notes: “By about 1300, Europeans had just about all arable land under cultivation, including marginal and poorly producing lands, to sustain the growing population”)

Is it fair to think of immigration as the reverse of the Black Death? We’re dramatically growing our population via immigrants and children of immigrants (see “Modern Immigration Wave Brings 59 Million to U.S., Driving Population Growth and Change Through 2065” (Pew)).

What seems surprising, then, is that the people who say that they want to see all of the economic results of the Black Death simultaneously say that they want to adjust U.S. demographics in precisely the opposite direction of the Black Death.

Is the apparent inconsistency resolved because only about 2 percent of U.S. workers are directly employed in agriculture?

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Financial Times: People turn socialist when they can’t afford an apartment

by philg

“Quantitative easing was the father of millennial socialism” by David McWilliams, an Irish professor (Financial Times), says that the bailouts following the Collapse of 2008 helped out older property owners, by reflating the prices of the stuff that they had unwisely purchased, on the backs of millennials.

He notes that “the worst of investments are often taken in the best of times.” (Maybe good to point out to anyone with money or income considering getting married and living in one of the U.S. states that provides for winner-take-all divorce litigation!)

He notes that average hourly earnings have gone up 22 percent in the past 9 years while property prices are up 55 percent in Houston, 67 percent in LA, and 96 percent in San Francisco: “The young are locked out.”

(The article says that 79 percent of the same folks who can’t afford apartments also think that “immigrants strengthen the US”. Certainly every landlord would agree that more demand is a good thing, but why are landless peasants happy to see another caravan of housing-seekers arrive?)

Why are people so obsessed with wealth inequality these days? The author says that “wealth inequality was not the unintended consequence, but the objective, of [quantitative easing] policy.”

The close:

For the purist, capitalism without default is a bit like Catholicism without hell. … what if the day of reckoning was only postponed? What if a policy designed to protect the balance sheets of the wealthy has unleashed forces that may lead to the mass appropriation of those assets in the years ahead?

Appropriation? Could it happen here? Elizabeth Warren has proposed to take wealth gradually, via a 2 percent tax on rich bastards (over $50 million in wealth). If they try to escape by renouncing their U.S. citizenship, she’ll hit them with a 40 percent exit tax. (Slate) Not too scary to the merely comfortable, right? Remember that income tax started out in 1913 between 1 and 6 percent and it was limited to those with incomes over $103,000 in today’s mini-dollars ($4,000/year for a married couple at the time). Once the structure is in place, the rates and thresholds can be tweaked as necessary.

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Google shows that James Damore and Econ 101 were right?

by philg

James Damore, the Google Heretic, was cast out for saying that intelligent people who identify as “women” did not enjoy staring at a screen and typing out pages of boring C and Java code (while simultaneously wearing headphones and rubbing elbows with other nerds?).

Damore suggested that the programming job be reconfigured so that it would be more appealing to people identifying as women. Instead of doing that, Google fired him for his thoughtcrime.

If Damore were correct, Econ 101 would predict that women at Google would be getting paid more than men for doing the same job. Otherwise, why would they be there doing something that was distasteful to them?

“Google Finds It’s Underpaying Many Men as It Addresses Wage Equity” (nytimes):

When Google conducted a study recently to determine whether the company was underpaying women and members of minority groups, it found, to the surprise of just about everyone, that men were paid less money than women for doing similar work.

Doesn’t this tend to show that both Damore and Econ 101 are correct?

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Energy and cost efficiency of different forms of transportation

by philg

“Lesson From The A380 And California HSR: Smaller Is Better In Transportation” (Forbes), by Brad Templeton, contains a lot of interesting numbers:

In the Department of Energy Transport Energy Data Book you will see some surprising numbers. For example, for transit buses you’ll see that the average American bus uses 4,102 BTUs per passenger-mile, while the average car uses 2,939. (A gallon of gasoline is around 115,000 BTUs.) Yes, US bus ridership is so poor that it would use less energy to move all bus riders in cars, at the national average of 3 people for 2 cars. You don’t even need to fill all the seats, and the cars are just average efficiency. The Toyota Prius is twice as efficient as that average car. People driving around alone in hybrid cars out-green the bus system.

You can compare what you would guess is an efficient electric train, the New York MTA subway. The DoE reports it uses 503 BTUS (of electricity, not heat) per passenger-mile. Even measuring the heat, that’s better than those cars and buses, but about the same as that Prius.

Looking at the MTA again, it spends about $16B to for 13B passenger miles, or $1.23 per passenger mile. Typical car ownership costs in the USA for late model cars is 50-60 cents per vehicle-mile, plus parking. Drivers get subsidies (though they pay gas taxes and other taxes for the roads) but the MTA isn’t paying for its tunnels either.

This is consistent with what I’ve heard from other sources: The idea of building and maintaining rails is obsolete for passenger transportation.

Separately, the article covers the demise of the Airbus A380, which saddens me because I’ve heard that it had the lowest level of cabin noise of any airliner ever produced (the A350 is a close second) and I never got to experience it (there have been some A380 flights in and out of Boston, but they are not common).

Maybe the countries that say they are morally obligated to assist refugees will snap up all of the A380s and send them out daily to pick up 1,000 refugees at a time from the world’s poorest and most troubled regions. If you are sincere about wanting to help people, why demand that they walk 1,000 miles to get that help?

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New York Times won’t divide by total population

by philg

“‘This Is Our Land’: Mineral riches should make Congo prosperous. Instead, they fuel corruption, which has kept the people poor and compromised elections.” (New York Times, Jan 26, 2019):

Between 2010 and 2012, Gécamines and other state companies sold stakes in several of Congo’s most valuable mines for at least $1.36 billion less than their market value, …

Some $750 million due to Gécamines by corporate partners between 2011 and 2014 could not reliably be traced to the company’s accounts, the Carter Center also found. The anticorruption watchdog Global Witness said that more than $750 million in mining revenues paid to Congolese state entities were lost between 2013 and 2015.

The front page lead-in to this story is “Why isn’t Cobalt Making Congo Rich?”

The journalists apparently never considered the question “What if we divide these numbers by 87 million?” (Congo estimated 2019 population, which the CIA says is growing at a rate of 2.3 percent annually)

Suppose that we accept the worst case analysis in the NYT article. A total of $2.1 billion has been stolen from the people of Congo. How “rich” would they have been if not for this theft? That works out to $24 per person.

Readers: What accounts for the reluctance of the media to admit that, even in a perfectly administered situation, a large population cannot get rich off a handful of cobalt mines?

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Michael Bloomberg exacerbates income inequality with donation to Hopkins for financial aid

by philg

“Michael Bloomberg: Why I’m Giving $1.8 Billion for College Financial Aid” (nytimes):

Let’s eliminate money problems from the admissions equation for qualified students.

America is at its best when we reward people based on the quality of their work, not the size of their pocketbook. Denying students entry to a college based on their ability to pay undermines equal opportunity. It perpetuates intergenerational poverty. And it strikes at the heart of the American dream: the idea that every person, from every community, has the chance to rise based on merit.

… I am donating an additional $1.8 billion to Hopkins that will be used for financial aid for qualified low- and middle-income students.

Here’s a simple idea I bet most Americans agree with: No qualified high school student should ever be barred entrance to a college based on his or her family’s bank account. Yet it happens all the time.

Let’s ignore the obvious solution for the Hopkins administrators: raise headline tuition prices by $1.8 billion over the next 10 years, charge families exactly what they were being charged before, but say that “financial aid” has been increased by $1.8 billion. (See “Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs”, a 2015 paper from the New York Fed; 60 percent of subsidized student loans were captured by increased tuition rates and provided no relief to the purported beneficiaries.)

Suppose that the Bloomberg program works as advertised and therefore that lower income families will actually pay $1.8 billion less over the forthcoming years.

Won’t this exacerbate the inequality that Bloomberg himself was decrying as recently as May 2018 (see “Inaction on inequality could lead to uprising”)? People born fortunate (high academic potential in an economy that rewards cognitive skills) will now go to college for free instead of taking out loans and paying them back from their high earnings. So they will pull yet farther ahead of Americans with low academic ability.

Instead of the rich-in-genetics person with an IQ of 140 paying back student loans that enabled attendance at an elite university, the rich-in-genetics person will now get to use a full 50-60 percent of income (assume 40-50 percent total tax rate in California, New York, and other typical destinations for elite Americans) on consumption and retirement savings. The smart Hopkins grad who came from a lower-income family will essentially get a gift from Michael Bloomberg of luxury clothing and automobiles that will make median-IQ, median-income Americans sick with envy.

In “Protests against Charles Murray inadvertently prove the points he made in The Bell Curve?” I asked “If you like to fret about inequality, the sidelining of less-than-brilliant workers in favor of robots, etc., why wouldn’t you love Charles Murray?”

See also “The Bell Curve revisited,” my 2004 post on the book. Excerpts:

The Bell Curve starts out by talking about how we live in an era where people get sorted by cognitive ability into socioeconomic classes. In 14th century England if you were a peasant with a high IQ or a noble with a low IQ it didn’t affect your life, reproductive potential, or income very much. In our more meritocratic and vastly more sophisticated economy a smart kid from a lower middle class might make it to the top of a big company (cf. Jack Welch, who paid himself $680 million as CEO of GE) or at least into a $300,000/year job as a radiologist. For the authors of the Bell Curve the increasing disparity in income in the U.S. is primarly due to the fact that employees with high IQs are worth a lot more than employees with low IQs. They note that we have an incredibly complex legal system and criminal justice system. So you’d expect people with poor cognitive ability to fail to figure out what is a crime, which crimes are actually likely to be punished, etc., and end up in jail. (A Google search brought up a report on juvenile justice in North Carolina; the average offender had an IQ of 79.) If they stay out of jail through dumb (literally) luck, there is no way that they are ever going to be able to start a small business; the legal and administrative hoops through which one must jump in order to employ even one other person are impenetrable obstacles to those with below-average intelligence.

… For us oldsters, one unexpected piece of cheerful news from this book is that younger Americans are getting genetically dumber every year. Even if you ignore the racial and immigrant angles of the book that created so much controversy back in 1994 it is hard to argue with the authors’ assertion that smart women tend to choose higher education and careers rather than cranking out lots of babies. …  Our population is predicted to reach 450 million or so [by 2050], i.e., the same as India had back when we were kids and our mothers told us about this starving and overpopulated country. An individual person’s labor in India has negligible economic value … It would seem that no enterprise would need an old guy’s skills in a country of 450 million; why bother when there are so many energetic young people around? And how would we be able to afford a house or apartment if there are 450 million smart young people out there earning big bucks and putting pressure on real estate prices? But if the book is right most of those young people will be dumb as bricks.

Whenever anyone talks about “financial aid,” I love to respond with “United Airlines gives more than 95 percent of customers financial aid since the official maximum ticket price is much higher than the typical price paid. Economists call charging each customer according to his or her ability to pay price discrimination, but it sounds better if you say ‘we’re giving these poor souls financial aid.'” (Note that price discrimination is possible
only in markets dominated by monopolies or oligopolies. McDonald’s can’t do this because Burger King is right across the street.)

Readers: Is it logically inconsistent for Michael Bloomberg to say that he wants to reduce income inequality and then give $1.8 billion to reduce college expenses for those Americans who are best set up to earn high incomes after graduation?

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With a cap on Ubers they will mostly hang out in the richest neighborhoods?

by philg

In “New York restrictions on Uber will increase inequality?” I wondered about how the profits from this new government regulation would be distributed.

Now I’m wondering about the cars themselves. Taxis were capped in NYC for decades (leading to the $1 million medallion price). The result was that taxis were plentiful in rich parts of Manhattan and scarce in poorer and outlying neighborhoods. I wonder if the same thing will happen with Ubers now that they’re capped. Manhattan and hipster Brooklyn will be packed with Ubers while folks who live elsewhere… can walk.

Readers: Does the above make sense?

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American’s gender wage gap and low GDP growth can be partially explained by no-fault divorce laws?

by philg

Hillary Clinton seems to be riding all the way to the White House on a platform of female victimhood, at the center of which is data showing that American women, on average, earn less than American men. (Though in our transgender age, it is unclear if this distinction is meaningful. How do we know that “men” who responded to a wage survey in 2015 continue to identify as men?)

In a previous posting I questioned whether W-2 earnings was the right way to look at the economics of gender equality. If Americans who identify as “female” can spend and/or consume more than Americans who identify as “male,” then wouldn’t we say that women were actually doing better than men economically?

Alessandra Voena, a professor at the University of Chicago, took a deeper look at this and wrote up her results in “Divorce laws and the economic behavior of married couples.” Here are some excerpts:

Household survey data from the United States shows that the introduction of unilateral divorce in states that imposed an equal division of property is associated with higher household savings and lower female employment rates among couples that are already married.

During the 1970s and 1980s, divorce laws were rewritten around the United States. Until then, mutual consent—the consent of both spouses—was often a requirement and upon divorce, property was assigned to the spouse who held the formal title to it; usually, this was the husband.

Then, profound state-level reforms brought about the so-called “unilateral divorce revolution.” Most couples now entered a legal system in which either spouse could obtain a divorce without the consent of the other and also keep a fraction of the marital assets, often close to fifty percent.

… forty percent of married couples and about one-third of all people over their lifetimes are divorced.

… a property division regime change that favors one spouse can improve her position inside the marriage, particularly if she can obtain divorce without the other partner’s consent.

… in such states [providing no-fault divorce plus 50/50 property division], women who were already married became less likely to work, by approximately 5 percentage points. By analyzing additional time use surveys between 1965 and 1993, I find that the decrease in the labor supply of women was associated with an increase in the amount of leisure time they enjoyed.

In states with equal division of property, the law favors women at the time of divorce. When the equal division of property grants them more resources in the event of divorce than they are receiving in the marriage, unilateral divorce means that they can use the threat of divorce in their favor while remaining married, thereby increasing their leisure.

As was the conclusion of the economics research behind The Redistribution Recession, it seems that Americans respond eagerly to any system that permits spending/consumption without working.

When a substantial percentage of women can spend without working, either because they use the threat of divorce to enjoy a life of leisure while married or because they use the machinery of divorce litigation to collect property, alimony, and child support, that is going to widen the gender earnings gap. Consider Jessica Kosow, whose successful litigation after a four-year marriage is described in this chapter on Massachusetts family law. She receives roughly 3.2X what her average Ivy League classmates earn. Suppose that she gets bored sitting at home and takes a $15/hour job at a non-profit organization to supplement her $250,000/year after-tax divorce and child support revenues. Now she is exacerbating the gender gap statistics due to earning far less from wages than her male University of Pennsylvania classmates. The same would be true for any woman who is collecting a share of the earnings of a current or former spouse. She can have comparatively high spending power while choosing a job that pays less but is either more convenient or more enjoyable. “Convenience” and “fun” are not well captured in statistical studies of wages. Finally, consider that most states’ family law encourages women who are successful alimony plaintiffs to withdraw from the workforce (if they earn money their “need” for alimony is reduced and their payments may be reduced). Not every state routinely provides lifetime alimony, however. If a woman returns to the workforce after decades of leisure she won’t command as high a wage as man with a multi-decade track record of work experience.

(A professor at the American Economics Association convention offered a simpler, but consistent with Professor Voena’s results, response to the gender earnings gap: “Why would you work 9-5 if you could get paid for having sex or having children?”)

Professor Voena’s CV reveals an Italian background, a country that conforms to Civil Law (see the sections on family law in Denmark, Germany, and Switzerland for how this is different from our Common Law system). It may be this background that leads her to suggest “cheap and enforceable prenuptial agreements” as a change to the family law systems in most U.S. states. According to the litigators that we interviewed for Real World Divorce, however, prenuptial agreements in the U.S. can never be either cheap or enforceable with certainty. Quite a few couples spend more than $100,000 in legal fees simply arguing over the validity or meaning of a prenuptial agreement that itself may have cost $10,000+ to draft. In a Civil Law jurisdiction the drafting cost could be $0 (check a box on a form at the time of marriage) and the litigation cost would also be $0 (since it is a state-provided agreement). [Note that a motivated plaintiff can still litigate the validity of a German prenuptial agreement by obtaining venue in a Common Law country. See Nicolas Granatino’s attempt to get extra cash out of Katrin Radmacher by challenging a German prenup in a London court. He ultimately failed (Guardian), but it ran up a spectacular legal bill for Ms. Radmacher and he still earned a lot more from having sex with a rich woman than he could have from waged labor (the lawyers also kept earning; the litigation continued in 2011, five years after the couple separated). Mr. Granatino’s behavior is also consistent with what Professor Voena found among American women. Mr. Granatino had a high-paying presumably not-very-fun job at JP Morgan. Once he had a high-income spouse and the possibility of a high-revenue divorce lawsuit, he quit to amuse himself in graduate school.]

Given that it is the public versus a $50 billion industry it seems safe to assume that the U.S. family law system won’t change substantially. Thus we can expect the “wage gap” to be an evergreen issue for politicians such as Hillary Clinton and also, when we combine family law with the other ways that Americans can get money without working, we can expect continued sluggish growth in GDP-per-capita.

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Could talking to high school students constantly about sex encourage them to have sex?

by philg

What if you put a big barrel of condoms in a high school and put a sign on it saying “You can use these while you are having sex?” Would that encourage the 14-18-year-olds to have sex? The previous folks who looked into this question, typically with small samples, said “no.” The paper “Fighting AIDS, Changing Teen Pregnancy? The Incidental Fertility Effects of School Condom Distribution Programs” (Buckles and Hungerman; presented at American Economics Association 2015) looked a little more carefully. The researchers pulled birth certificates from the counties with free condom distribution in schools. They looked at births to women aged 15-19 compared to births to women aged 20-24 (the control group that presumably wouldn’t have had access to high schools) and found that births to the 15-19-year-olds increased by about 10 percent after the condom barrels went in. (Responding to an audience question, they said that they didn’t have any data on abortions so they couldn’t say how many extra pregnancies resulted from the free distribution programs. They noted that accurate data on abortion prevalence from surveys is difficult to obtain because people lie.)

Incidentally, the researchers noted that the American Academy of Pediatrics recently came out with a recommendation that condoms be distributed in schools. Thus people who get paid to provide health care to children support a policy that results in a larger customer base.

Updated link to the article: https://www3.nd.edu/~dhungerm/BH_School_Condoms.pdf

See also https://pubmed.ncbi.nlm.nih.gov/29993228/ (final version of the paper: “We find that access to condoms in schools increases teen fertility by about 12 percent.”)

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