Tuesday, September 18, 2012

Prussian Historic Data

The ifo Prussian Economic History Database (iPEHD) is a county-level database for all Prussian counties, 1816-1901. These data are an excellent source for empirical research and, above all:
"The data are provided free of charge. We have tried to document the data as good as - we think - we possibly could, including references to the original publications from which the data are drawn."

In addition, the data are well documented: Becker, Sascha O., Francesco Cinnirella, Erik Hornung and Ludger Woessmann, "iPEHD - The ifo Prussian Economic History Database", CESifo Working Paper No. 3904.

Monday, September 17, 2012

Forensic Economics

A new field is emerging in economics, Forensic Economics. Eric Zitzewitz has an article in this issue of the Journal of Economic Literature providing an exciting overview on this emerging field.

Examples include teachers cheating on exams, road builders skimping on materials, violations of U.N. sanctions, unnecessary heart surgeries, and racial biases in employment decisions, traffic stops, auto retailing, and even sports judging. In each case, part of the contribution of economic analysis is in uncovering evidence of wrongdoing.

Monday, September 10, 2012

Make babies, not war

I am currently reading John Irving's novel "Last night in Twisted River" where I came upon "Kennedy fathers": "in March 1963, President Kennedy had issued an executive order expanding paternity deferment. ... Having a kid could get you out of the war".

This, I assume, would make for a nice empirical project: analyze birth rates for different cohorts (Nixon put an end to this type of avoiding the war in 1970). I expect to see an increase in fertility, driven by young couples (men), attempting to avoid the draft.

However, Andrea Kutinova did already do this in her article "Paternity derferments..." and she found--surprise, surprise!--a huge response of the birth rate: "the calculated conservative increase in the number of first births by 15,532 in June and August 1966 represents more than 7% of the total number of first deliveries in those 2 mo[nths]."

What do we expect about the lifes of those babies, in comparison to those born before/after the paternity deferment? Now, this would make for an interesting research project...

Thursday, September 6, 2012

How trade unions increase welfare

Alejandro Donado and Klaus Wälde, in a paper that's just been published by the Economic Journal (a previous version is available here), show that trade unions might substantially improve welfare by contributing to workplace health and safety. (Spoiler: be warned, this is "mainstream" economics!)

They enrich the standard model by assuming that unions do not only care about their members' wages, but also about their health. Because workers cannot precisely judge the effects of working conditions on their health--an information asymmetry--, competitive markets cannot provide an efficient solution, leading to low standards (standards are costly), to more accidents, and to inefficent high sickeness levels. (Without information asymmetry, workers would require higher wage rates, resulting in compensating differentials.)

If unions are better informed than their members, or, alternatively, invest resources into the analysis of workplace hazards, they will bargain for better health and safety standards. This will ultimately result in healthier workers and lower absence rates. (The union "internalises" at least some of the externality arising from information asymmetry.)

So far, exciting stuff! However, as often in this type of research, there is almost no data available to test this empirically. They make an heroic effort to interpret union densities across countries in the light of their theory, but they conclude with an appeal
"It might be a good idea for unions to go and collect data on these issues." (p1008)

To which I'd like to add: I'd love to analyze these data!

Tuesday, September 4, 2012

RCTs and Policy

We need more evidence-based politics! And randomized control trials can help to provide this evidence.

Some countries have realised the need for such evidence and push ahead: the UK Cabinet Office is hiring four researchers to join their Behavioural Insights Team! ("The Behavioural Insights Team (more commonly referred to as the Nudge Unit) was set up in 2010 to help apply behavioural economics and behavioural psychology to public policy in the UK.")

While I do not want to see you running off to Old Blighty, I'd like to see more of this happening here! And, this goes without saying, I know that there are a great number of colleagues, me included, who like to be involved in such RCTs and (economic) policy.

Handelsblatt Ranking

According to the The Lumpy Economist, who comments on the Boykott of the Handelsblatt ranking by business professors, three structural differences between Germany and the US tend to increase the importance of the Handelsblatt ranking:

1) Smallness of departments, which often leads to the situation that nobody in the field to be hired is there and can competently judge the papers of the candidates – the HB ranking is an easy way out;

2) lack of a general education in a PhD program, which means that faculty with a traditional German PhD eduaction often lack the background to talk about papers in other fields (of course, I would always defer to my theory or econometrics colleagues to judge such papers, but it’s also not true that I can be completely bamboozled in these areas);

3) I think the most important one is the lack of a department structure to begin with, which has two direct consequences: a) I honestly think that many German professors do not care as much as US professors about who is going to be a colleague – as I said, in the US senior hiring is one of the most important services one can provide to the department; and, rightfully so, as they run a chair, which is ultimately an isolated unit for which they are responsible on their own. [my emphasis]

Hear, hear!

(Working at a university, where the business departments are, according to some ranking, not the most prolific when it comes to publications in peer-reviewed journals.)

(Update: hear, hear!: http://www.youtube.com/watch?v=3Nz846dDids&feature=fvwrel .)

Sunday, September 2, 2012

Eine allgemeine Wehrpflicht ist teurer als manche glauben

An verschiedenster Stelle, z.B. im Standard, wird behauptet, bei einer Volksabstimmung über die Wehrpflicht stimme die "großteils davon nicht betroffene Bevölkerung" ab.

Das ist eine seltsame Behauptung. Wer soll diese nicht betroffene Bevölkerung sein?

Es sind vermutlich weder:
1. Die Wehrpflichtigen, denn die müssen den Wehrdienst leisten.
2. Die Steuerzahlenden, denn diese finanzieren die allgemeine Wehrpflicht und alle weiteren sozialen Kosten.
3. Unternehmen, denn diese haben uU Kosten durch die Wehrpflicht, wenn Lehrlinge zum Dienst müssen, bzw profitieren uU von den Fähigkeiten, die die jungen Männer beim Heer (auf Kosten der Allgemeinheit) erwerben, z.B. Führerscheine, o.ä.
4. Die Kranken und Alten, da diese von den billigen Zivildienern profitieren, die die Kosten der Pflege und Versorgung niedrig halten.
5. Politiker und Politikerinnen, die das Thema für Selbstdarstellung verwenden (können).

Wer bleibt da noch über?

1. Aus ökonomischer Sicht ist die Wehrpflicht eine ineffiziente Form der Organisation einer Armee, da die positiven Auswirkungen einer Spezialisierung vergeudet werden, d.h., wer in der Armee produktiver als in anderen Bereichen ist, sollte dort tätig sein. Eine allgemeine Wehrpflicht ignoriert Unterschiede in den Fähigkeiten und setzt Personen daher ineffizient ein, d.h., vergeudet Ressourcen.

2. Es wird argumentiert, dass eine allgemeine Wehrpflicht billiger als eine Berufsarmee sei, da die Wehrmänner keine Bezahlung im üblichen Sinn erhalten, sondern nur den Sold. Das ist klarerweise eine falsche Betrachtung (Opportunitätskosten!), da diese Betrachtung die sozialen Kosten der vergeudeten Ressourcen ignoriert!
Kerstens und Mayermans zeigen, dass die gesamten Kosten der belgischen Wehrpflicht rund doppelt so hoch als die reinen budgetären Kosten waren.

3. Eine allgemeine Wehrpflicht kann auch zu langfristigen sozialen Kosten führen, wenn die Wehrmänner wegen der Wehrpflicht ihr Verhalten ändern, zum Beispiel, wenn sie weniger in Ausbildung investieren: Keller, Poutvaraa und Wagender zeigen, dass eine allgemeine Wehrpflicht zu weniger Studienabschlüssen führt. In manchen Fällen dürfte es allerdings zum gegenteiligen Effekt gekommen sein, Maurin und Xenogiani zeigen, dass Männer in Frankreich wegen der Wehrpflicht vermehrt studierten, vermutlich um die Wehrpflicht aufzuschieben und vermutlich in der Hoffnung, sie gänzlich zu vermeiden. Beides(!) ist ineffizient--weder sollten Männer studieren, die es nicht wollen oder anderswo produktiver sind, denn auch das hat Opportunitätskosten, noch sollten jene nicht studieren, die es wollen und könnten.

4. Es gibt widersprüchliche Evidenz über die Konsequenzen einer Wehrpflicht in Friedenszeiten für die Wehrmänner: Card und Cardoso finden, dass junge, schlecht ausgebildete Portugiesen von der Wehrpflicht in Form von höheren Löhnen profitierten. Bauer, Bender, Paloyo und Schmidt finden hingegen, dass derartige Lohnsteigerungen bei deutschen Männern von unterschiedlichen Merkmalen stammen, d.h., gesunde Männer leisten ihre Wehrpflicht ab und weniger gesunde nicht--und gesunde Männer verdienen besser als weniger gesunde.

Fazit: Wer behauptet, die Wehrpflicht ginge nur Männer etwas an, macht einen Fehler--die effiziente Verwendung von Ressourcen betrifft alle!


Bauer, Bender, Paloyo und Schmidt, 2012, "Evaluating the labor-market effects of compulsory military service", European Economic Review.
Card und Cardoso, 2011, "Can Compulsory Military Service Increase Civilian Wages? Evidence from the Peacetime Draft in Portugal", NBER working paper 17694.
Keller, Poutvaraa und Wagener, 2009, "Does Military Draft Discourage Enrollment in Higher Education? Evidence from OECD Countries", IZA discussion papers 4399.
Kerstens und Meyermans, 1993, "The draft versus an all‐volunteer force: Issues of efficiency and equity in the Belgian draft", Defence Economics.
Maurin und Xenogiani, 2007, "Demand for Education and Labor Market Outcomes", Journal of Human Resources.
Rauscher, 2012, "Energiesparlampe: Das Lobby-Licht", Standard vom 31.8.2012.