Month: December 2016

Happy New Year…Sort Of

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Image result for new years eve gif

Today I’ve been thinking about a First Things piece by Orthodox philosopher David B. Hart written several years ago on the festivities of New Year’s. He notes

that my family never observed the day when I was growing up, and always made a point of going to bed well before midnight on New Year’s Eve.

In part, I think, this was simply because everyone in my family tends to be of a somewhat reclusive temperament, and so is generally averse to loud noises, close crowds, or forced jollity. In larger part, though, I think we always saw New Year’s Day—when treated as a kind of feast day of its own—as a profane intrusion on the twelve days of Christmas, which was by far our favorite time of year. From Christmas Eve to Twelfth Night, we were fairly good at keeping the festal flames alight and really had no need of any other excuse for our good spirits.

There is, of course, a feast of the Church traditionally celebrated on January 1st: to wit, the Feast of the Circumcision, considered important not merely as a commemoration of an episode from the biography of Christ, but as a remembrance of the first blood shed by Christ for the sake of the world’s redemption. But that obviously has nothing whatever to do with the arrival of the new year. In fact, throughout the Middle Ages, there was little firm agreement regarding what day really marked the inauguration of a new year, even though the Roman mensal calendar was in continual use.

The “real” 12 days of Christmas (not the song), according to Christianity Today, are as follows:

The traditional Christian celebration of Christmas is exactly the opposite [of the modern version]. The season of Advent begins on the fourth Sunday before Christmas, and for nearly a month Christians await the coming of Christ in a spirit of expectation, singing hymns of longing. Then, on December 25, Christmas Day itself ushers in 12 days of celebration, ending only on January 6 with the feast of the Epiphany.

Exhortations to follow this calendar rather than the secular one have become routine at this time of year. But often the focus falls on giving Advent its due, with the 12 days of Christmas relegated to the words of a cryptic traditional carol. Most people are simply too tired after Christmas Day to do much celebrating.

…The three traditional feasts (dating back to the late fifth century) that follow Christmas reflect different ways in which the mystery of the Incarnation works itself out in the body of Christ. December 26 is the feast of St. Stephen—a traditional day for giving leftovers to the poor (as described in the carol “Good King Wenceslas”). As one of the first deacons, Stephen was the forerunner of all those who show forth the love of Christ by their generosity to the needy. But more than this, he was the first martyr of the New Covenant, witnessing to Christ by the ultimate gift of his own life. St. John the Evangelist, commemorated on December 27, is traditionally the only one of the twelve disciples who did not die a martyr. Rather, John witnessed to the Incarnation through his words, turning Greek philosophy on its head with his affirmation, “The Word was made flesh, and dwelt among us” (John 1:14, KJV).

On December 28, we celebrate the feast of the Holy Innocents, the children murdered by Herod. These were not martyrs like Stephen, who died heroically in a vision of the glorified Christ. They were not inspired like John to speak the Word of life and understand the mysteries of God. They died unjustly before they had a chance to know or to will—but they died for Christ nonetheless. In them we see the long agony of those who suffer and die through human injustice, never knowing that they have been redeemed. If Christ did not come for them too, then surely Christ came in vain. In celebrating the Holy Innocents, we remember the victims of abortion, of war, of abuse.

…In the Middle Ages, these three feasts were each dedicated to a different part of the clergy. Stephen, fittingly, was the patron of deacons. The feast of John the Evangelist was dedicated to the priests, and the feast of the Holy Innocents was dedicated to young men training for the clergy and serving the altar. The subdeacons (one of the “minor orders” that developed in the early church) objected that they had no feast of their own. So it became their custom to celebrate the “Feast of Fools” around January 1, often in conjunction with the feast of Christ’s circumcision on that day (which was also one of the earliest feasts of the Virgin Mary, and is today celebrated as such by Roman Catholics).

Hart explains that as an adult his own family somewhat celebrates New Year’s Eve/Day. “But, on the whole,” he writes, “it is still a minor observance for us, and nothing to compare to the celebrations we like to hold on Twelfth Night, the eve of Epiphany, when the last of the Christmas presents are opened, games are played, and the decorations come down from the tree. (I know many Americans think of Christmas as a single day and like to clear away the trappings of the season well before the fifth of January, but that is sheer barbarism, if you ask me, morally only a few steps removed from human sacrifice, cannibalism, or golf.) The long and the short of it, then, is that I have really nothing much to say about New Year’s Day.” He concludes, “Whatever the case, I hope any of you who plan to spend [New Year’s Eve] chasing after strange gods will find something of interest in it. At my house, however, we will still be celebrating Christmas.”

All in all, I find this appealing. Mormonism doesn’t have much of a Christmas tradition outside the American version, but this doesn’t mean we can’t draw on the traditions of our Christian neighbors. Perhaps celebrating “the first blood shed by Christ for the sake of the world’s redemption” on January 1st isn’t such a bad idea.

The Circumcision by Luca Signorelli

Politics and Emotion

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Emma Green at the Atlantic posted a conversation with Michael Wear, a conservative evangelical Christian who worked on Obama’s staff as a faith-outreach director.  In it, Wear describes the current problems with political tribalism on hot-button issues, with focus on (non-)religiously based views.  You can read the whole thing here: Democrats Have a Religion Problem, and I’ve pulled out some gems below.

On religious illiteracy:

[Wear] once drafted a faith-outreach fact sheet describing Obama’s views on poverty, titling it “Economic Fairness and the Least of These,” a reference to a famous teaching from Jesus in the Bible. Another staffer repeatedly deleted “the least of these,” commenting, “Is this a typo? It doesn’t make any sense to me. Who/what are ‘these’?” (Green)

On divisiveness:

No matter Clinton’s slogan of “Stronger Together,” we have a politics right now that is based on making enemies, and making people afraid… It’s much easier to make people scared of evangelicals, and to make evangelicals the enemy, than trying to make an appeal to them. (Wear)

On emotion:

I’ve been speaking across the country for the year leading up to the election, and I would be doing these events, and without fail, the last questioner or second-to-last questioner would cry. I’ve been doing political events for a long time, and I’ve never seen that kind of raw emotion. And out of that, I came to the conclusion that politics was causing a deep spiritual harm in our country. We’ve allowed politics to take up emotional space in our lives that it’s not meant to take up. (Wear, emphasis added.)

Perhaps politics is taking up a space that religion used to take up.  This seems to be true on both sides of the political aisle.

GMU Interview with Joe Henrich

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Joseph Henrich (left), Tyler Cowen (right)

Anthropologist and cultural psychologist Joseph Henrich is an academic whose work I’ve been following over the last couple years. His work has been highlighted multiple times here at Difficult Run. He is a co-author of some of my favorite studies in the last decade or so. And his latest book–The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter–looks absolutely amazing (it’s waiting patiently for me on my Kindle).

He recently sat down with economist Tyler Cowen for a segment of Conversations with Tyler at GMU’s Mercatus Center. The interview is fascinating as they discuss Henrich’s work on cultural evolution and its implications for both today and the future. What perhaps excited me the most was Henrich’s discussion of his work-in-progress on marriage norms and the development of Western individualism:

In my latest project I’m really looking at the kind of spread of the Western church into Europe and how it transformed the social structure in ways that I think led to individualism, it led to a different kind of cultural psychology that would eventually pave the way for secular institutions and economic growth. The church is the first mover in that account…When the church first began to spread its marriage-and-family program where it would dissolve all these complex kinship groups, it altered marriage. So it ended polygyny, it ended cousin marriage, which…forced people to marry further away, which would build contacts between larger groups. That actually starts in 600 in Kent, Anglo-Saxon Kent. Missionaries then spread out into Holland and northern France and places like that. At least in terms of timing, the marriage-and-family program gets its start in southern England.

This project is in its early stages (according to the email Henrich sent me), but it’s something I’m greatly anticipating. The entire interview is worth watching/listening to. Cowen provides both insightful feedback and even pushback, making the discussion a productive one. Check it out.

Unintended Consequences: Redistribution and the World’s Poor

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Last summer, two consultants at the Minneapolis Fed published a paper entitled “On the Ethics of Redistribution.” They begin by framing the discussion with a global perspective:

A typical American in the lowest 5 percent of income (for America) has a higher income than 95 percent of Indians, 80 percent of Chinese and 50 percent of Brazilians. In the United States, 99 percent of households have indoor plumbing (a toilet with a sewer connection). In India, it’s 12 percent. For Americans below the poverty line, nearly three-quarters have a car (and 31 percent have two or more) and 97 percent have air conditioning. In India, only 5 percent of all households have cars and 2 percent of all households have air conditioning.

This then begs the following question: Are policies that purport to help the comparatively well-off (those at, say, the poverty line in developed countries) at the expense of the superlatively well-off (the rich in developed countries) desirable from the behind-the-veil perspective assuming that that perspective is global?

Increasing world trade is an example of the tension between policies that help those in developing countries versus those that help those lower in the income distribution in developed countries. According to a World Bank Study, in the three decades between 1981 and 2010, the rate of extreme poverty in the developing world (subsisting on less than $1.25 per day) has gone down from more than one out of every two citizens to roughly one out of every five, all while the population of the developing world increased by 59 percent. This reduction in extreme poverty represents the single greatest decrease in material human deprivation in history.

But this decrease in extreme poverty in the developing world has coincided with a marked increase in income inequality in the developed world, and the latter has received much more attention, at least from policy analysts in these richer nations.

The authors then move to the subject of skilled/unskilled labor and the effects of redistribution:

Image result for redistributionIn a world with just two countries, one developed and the other poor, output is produced in each by a combination of skilled workers and unskilled workers. When they’re young, unskilled workers have the opportunity to become skilled by working with older, skilled workers.

…A rich-country policy to tax high incomes will redistribute income (within that country) from those with high innate abilities (and, by assumption, with the ability to become highly skilled) to those with lower innate abilities. In so doing, that policy will reduce inequality within the rich country, but it will also create disincentives there to becoming highly skilled and thereby reduce the global supply of skilled workers. This reduced supply of skilled workers from the developed country then reduces opportunities for young workers in the poor country to become skilled.

Applying the Harsanyi-Rawls behind-the-veil-of-ignorance criterion but considering only people in the developed country would appear to make this a beneficial policy because it helps the poor of that rich country. But, in our example, it hurts the poorest of the poor in the world, those in the developing nation. A proper application of the behind-the-veil-of-ignorance criterion—one that takes all people in all countries into consideration—can thus lead to the implication that such a policy is extremely undesirable. At the very least, a proper application of the criterion says that redistribution within rich countries imposes costs on people in other countries which need to be taken into account.

They conclude, “A giant literature in public finance justifies such social welfare functions by appealing to the veil-of-ignorance. Our point simply is that those who use this criterion should weight the welfare of poor people in Chad, the world’s poorest nation, very heavily. To our knowledge, very little if any of the relevant research does so.”

Geography and Unemployment

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Does geography contribute to unemployment? “In a paper published in 1965,” reports The Economist,

John Kain, an economist at Harvard University, proposed what came to be known as the “spatial-mismatch hypothesis”. Kain had noticed that while the unemployment rate in America as a whole was below 5%, it was 40% in many black, inner-city communities. He suggested that high and persistent urban joblessness was due to a movement of jobs away from the inner city, coupled with the inability of those living there to move closer to the places where jobs had gone, due to racial discrimination in housing. Employers might also discriminate against those that came from “bad” neighbourhoods. As a result, finding work was tough for many inner-city types, especially if public transport was poor and they did not own a car.

Is there any data to back up this theory?

A new paper,[ref]This is a 2014 article.[/ref] published by the National Bureau of Economic Research…looks at the job searches of nearly 250,000 poor Americans living in nine cities in the Midwest. These places contain pockets of penury: unemployment in inner Chicago, for instance, is twice the average for the remainder of the city. Even more impressive than the size of the sample is the richness of the data. They are longitudinal, not cross-sectional: the authors have repeated observations over a number of years (in this case, six). That helps them to separate cause and effect. Most importantly, the paper looks only at workers who lost their jobs during “mass lay-offs”, in which at least 30% of a company’s workforce was let go. That means the sample is less likely to include people who may live in a certain area, and be looking for work, for reasons other than plain bad luck.

For each worker the authors build an index of accessibility, which measures how far a jobseeker is from the available jobs, adjusted for how many other people are likely to be competing for them. The authors use rush-hour travel times to estimate how long a jobseeker would need to get to a particular job.

If a spatial mismatch exists, then accessibility should influence how long it takes to find a job. That is indeed what the authors find: jobs are often located where poorer people cannot afford to live. Those at the 25th percentile of the authors’ index take 7% longer to find a job that replaces at least 90% of their previous earnings than those at the 75th percentile. Those who commuted a long way to their old job find a new one faster, possibly because they are used to a long trek.

Governments could seek to “help workers either to move to areas with lots of jobs, or at least to commute to them. That would involve scrapping zoning laws that discourage cheaper housing, and improving public transport. The typical American city dweller can reach just 30% of jobs in their city within 90 minutes on public transport. That is a recipe for unemployment.”[ref]AEI’s James Pethokoukis has a good piece expanding on this.[/ref]

Faith in Science and Religion

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Detail from stained glass work “Education”(Chittenden Memorial Window at Yale). Public domain. (Image links to original.)

This post is part of the General Conference Odyssey.

As usual, some of the best talks from this General Conference come from the Sunday session. In particular, I’m really developing an appreciation for President Hunter. He was only prophet for a very brief period when I was a young man (June 1994 – March 1994) and I’m sorry to say that my main takeaway at the time was a kind of disappointment. My father had often told me of how you developed a special connection to the prophet who was alive when you were developing your own testimony—often in your teens—and so I thought that President Hunter would be that man. When he died so quickly—before he could leave much of a mark of his own—I felt a tiny sense of betrayal.

I confess I haven’t thought a lot about him in the years sense, but that started to change when I taught Elder’s Quorum a couple of weeks ago using Chapter 21 of the manual based on his writings. I was shocked at how sophisticated the lesson was, and at how much time President Hunter spent dealing explicitly with one of my pet issues: the relationship between faith in science and in religion. For example:

Whether seeking for knowledge of scientific truths or to discover God, one must have faith. This becomes the starting point.

The idea that faith plays a role in both faith and in science is one that bowled me over when I first read David Hume in light of Alma 32 as an undergrad. Since then plenty of people have made similar arguments—so I’m making no claims to originality—but I was still surprised to see the topic handled so directly by a prophet.

As it turns out, that manual was drawing from his talk in this session: To Know God. In the talk, he makes the case even more clearly than the manual, writing that “scientific research is an endeavor to ascertain truth, and the same principles which are applied to that pursuit are used in the quest to establish the truth of religion as well.”

Also, continuing that first quote from him, her references Hebrews and the idea that “faith is the substance of things hoped for, the evidence of things not seen,”[ref]Hebrew 11:1[/ref] and relates that directly to science as well:

The scientist does not see molecules, atoms, or electrons, yet he knows they exist. He does not see electricity, radiation, or magnetism, but he knows these are unseen realities. In like manner, those who earnestly seek for God do not see him, but they know of his reality by faith. It is more than hope. Faith makes it a conviction—an evidence of things not seen.

I’m a little embarrassed to ride my hobby horse this far off down a tangent, but—since I know that equating faith in religion and science is bound to tick off plenty of people and confuse even more—I’ll provide a succinct overview that, I hope, falls in line with what President Hunter is saying.

The first point comes from David Hume, and it’s a simple one: we don’t observe causation directly. We infer causation. The implications might not be immediately obvious so—just to give a sense of what a huge problem this was—consider that one of the most famous philosophers of all time (Emannuel Kant) “changed[ed] his entire career after he [read] Hume.”[ref]This quote, and most of the one to follow, are from Science Wars: What Scientists Know and How They Know It by Steven L. Goldman.[/ref]. Why? Because if causality must be assumed, then no amount of observation or experimentation can jump the chasm from a collection of facts about what has happened to have taken place in the past to certain knowledge about how the universe works.

Now, why does this matter? Because, of the “inextricably realist character that is woven into the rhetoric of science.”[ref] Science Wars: What Scientists Know and How They Know It by Steven L. Goldman.[/ref] In other words: science—the way it is discussed in the media and among scientists themselves—is the business of uncovering facts (certain knowledge) that are about the world. Which, if Hume is right, is quite impossible.

And, in fact, if you press philosophically sophisticated scientists on the topic (speaking historically), they’ll concede the point for the simple reason that nobody has found an adequate rebuttal to Hume. And so there’s a “parade of absolutely first-rate scientific thinkers who have insisted that science is not about an independently existing reality,”[ref] Science Wars: What Scientists Know and How They Know It by Steven L. Goldman.[/ref] but the reality is that nobody really has that in mind. When the Higgs Boson was discovered, everyone—from the physicists to the journalists to the general public—took the realist view for granted. There’s this idea of a particle-thingy and scientists have discovered it and so now we know that the particle-thingy is really out there, a part of an independent reality that exists beyond human mental constructs.

Professor Goldman goes so far as to call the scientific establishment “schizophrenic” in this regard. They plainly talk and act as though they are learning facts about the real world (that’s the realist view) despite the awareness—now centuries’ old—that this is impossible to do with certainty.

There are basically three solutions to this conundrum.

On the one hand, you can just give up on rationality entirely. I won’t say much for this course because, once you’ve decided to just abandon making sense, there’s nothing left to talk about. But I suppose—for the sake of completeness if nothing else—I ought to mention that you can try that course if you’d like. Hume proved that deriving certain knowledge of the world through experimentation and observation is impossible, but you can just pretend that he didn’t if that suits your fancy.

Now, if you’re not willing to jettison logic and reason, you have two remaining options. On the one hand, you can retreat. You can agree that—because causality is never observable—science is basically just a game where we invent explanations for our experiences, and no explanation is ever really “true.” Scientific theories and laws are more or less coherent with each other and with our experiences and they have varying degrees of simplicity or aesthetic beauty, but in the final analysis they are socially constructed and subjective and that’s that.

On the other hand, you can stand your ground and assert that science is about something objectively real. That there are things out there—matter and energy and laws governing them—that have a kind of independent and objective experience and that—no matter how imperfectly or partially—science is in the business of learning about those things. But if you want to take this view, you have to swallow the reality that science rests on faith. Faith, for example, that although we may not be able to see or observe something (for example: causality), it’s still there, undergirding our experiments and observations and building a faith-based connection between science and reality.

We’ve gone rather far afield at this point, so let me wrap it up. If none of the philosophy appeals to you: that’s fine. Let me just say that it’s exciting—and unexpected—that in reading old talks from the 1970s I’d come to such a greater appreciation for a man who served as President for less than a year while I was a teenager. This General Conference Odyssey has already covered some unexpected new territory in just the first year, and we have more than ten more to go.

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Check out the other posts from the General Conference Odyssey this week and join our Facebook group to follow along!

“The Eucatastrophe of Man’s History”

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Tolkien

In his famous essay “On Fairy Stories,” The Lord of the Rings author and Oxford professor J.R.R. Tolkien coined the term “eucatastrophe.” The word was meant to portray the opposite of tragedy and embody the “Consolation of the Happy Ending”:

The consolation of fairy-stories, the joy of the happy ending: or more correctly of the good catastrophe, the sudden joyous “turn” (for there is no true end to any fairy-tale): this joy, which is one of the things which fairy-stories can produce supremely well, is not essentially “escapist,” nor “fugitive.” In its fairy-tale—or otherworld—setting, it is a sudden and miraculous grace: never to be counted on to recur. It does not deny the existence of dyscatastrophe, of sorrow and failure: the possibility of these is necessary to the joy of deliverance; it denies (in the face of much evidence, if you will) universal final defeat and in so far is evangelium, giving a fleeting glimpse of Joy, Joy beyond the walls of the world, poignant as grief. It is the mark of a good fairy-story, of the higher or more complete kind, that however wild its events, however fantastic or terrible the adventures, it can give to child or man that hears it, when the “turn” comes, a catch of the breath, a beat and lifting of the heart, near to (or indeed accompanied by) tears, as keen as that given by any form of literary art, and having a peculiar quality (pgs. 22-23).

Being a devout Catholic and key figure in C.S. Lewis’ conversion to Christianity, Tolkien concluded his essay by writing,

I would venture to say that approaching the Christian Story from this direction, it has long been my feeling (a joyous feeling) that God redeemed the corrupt making-creatures, men, in a way fitting to this aspect, as to others, of their strange nature. The Gospels contain a fairy-story, or a story of a larger kind which embraces all the essence of fairy-stories. They contain many marvels—peculiarly artistic, beautiful, and moving: “mythical” in their perfect, self-contained significance; and among the marvels is the greatest and most complete conceivable eucatastrophe. But this story has entered History and the primary world; the desire and aspiration of sub-creation has been raised to the fulfillment of Creation. The Birth of Christ is the eucatastrophe of Man’s history. The Resurrection is the eucatastrophe of the story of the Incarnation. This story begins and ends in joy. It has preeminently the “inner consistency of reality.” There is no tale ever told that men would rather find was true, and none which so many sceptical men have accepted as true on its own merits. For the Art of it has the supremely convincing tone of Primary Art, that is, of Creation. To reject it leads either to sadness or to wrath…But this story is supreme; and it is true. Art has been verified. God is the Lord, of angels, and of men—and of elves. Legend and History have met and fused (pgs. 23-24).

Merry Christmas everyone.

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The Benefits of Globalization: Trade & Migration

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We sharply disagree with this dismal view of globalisation.

Image result for free tradeSo write three scholars drawing on their latest research on globalization. “Our recent research,” they continue,

indicates that the gains from trade and migration are tremendous and that the world stands to benefit greatly from their further liberalisation (Desmet et al. 2016). The problem with virtually all quantitative and empirical evaluations of trade and migration is their static nature. They completely ignore the dynamic gains from globalisation. As we will later discuss, these dynamic gains quantitatively dwarf any short-run costs. 

After providing the theory of growth behind trade and migration, the researchers present their jaw-dropping conclusions:

Completely lifting all migration restrictions would increase real world output by 126% in present discounted value terms. Since such a policy may be unrealistic, consider instead a reform that liberalises migration so that 10% of the world population moves at impact. This would yield a present discounted value increase in real world output of 14%. Such a reform would cause some extra congestion in Europe and the US, implying that average welfare would increase by 9%, a smaller but still impressive figure. It is hard to think about any other policy that could readily be applied at the world level for which estimated benefits are as large. Migration is uniquely powerful in generating positive effects. In economic terms, having an open-door policy is a no brainer, not because of some abstract theoretical arguments, but because the measurement of the relevant forces tells us so.

Turning back the clock on trade would have equally dire consequences. Increasing trade costs by 40% would lower real world output by 30% in present discounted value terms. Although globalisation might create losers in the short run, allowing the free flow of goods and people across regions and countries is still one of the best ways we know to ensure our long-run wealth and well-being.

These numbers are astronomical. The potential good that can come from liberalized trade and migration makes the rising nationalism all the more disheartening.

Minimum Wage Abroad

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Over at the World Bank’s Development Impact blog, doctoral candidate Andrés Ham looks at the effects of minimum wage hikes in developing countries. “Minimum wages in developing countries tend to be set higher, are less likely to be rigorously enforced, and labor markets are often segmented into formal and informal sectors with minimum wage policy only covering formal workers,” he writes.

Given these differences and that most developing countries implement minimum wage policies, understanding their consequences on labor markets is critical for economic growth, developing effective labor policy, and poverty alleviation.
 
My job market paper studies the impact of minimum wage policy on labor market outcomes and poverty in Honduras from 2005-2012 using repeated cross-sections of household survey data. The attributes of Honduran minimum wage policy and its labor market are similar to many developing countries, so the resulting conclusions from this case study may extend beyond its borders.

His results?

I find that a 10 percent increase in minimum wages reduces employment rates by about 1 percent. Because this result lumps formal and informal sectors together, it disguises the real effect: a significant change in labor force composition. The same minimum wage hike lowers the likelihood of employment in the formal sector by about 8 percent and increases the probability of employment in the informal sector just over 5 percent. The data indicate that individuals substitute wage earning jobs for self-employment as a direct consequence of minimum wage hikes. Wages in the formal sector increase but the observed influx of workers towards the informal sector leads to a negative net effect on informal sector wages.

Since informal sector jobs tend to be lower-paid part-time positions, average earnings in this sector often lie below formal sector incomes. Hence, there may be an adverse effect on individual well-being from these observed changes in labor force composition. To approximate the welfare effect of minimum wages, I estimate whether minimum wage increases help workers escape from extreme poverty. I find that a 10 percent increase in minimum wages has a negative but statistically insignificant effect on the risk of extreme poverty for the formal labor force. The same minimum wage hike significantly raises the risk of extreme poverty for the informal workforce by around 4 percent. This result indicates that on balance, higher minimum wages increase poverty.

I also find evidence that more formal workers are being paid less than the minimum wage. This occurs despite formal employers’ legal obligation to comply with minimum wages. Some non-compliance has always been observed in developing countries, mostly in response to imperfect enforcement from regulators (Rani et al. 2013). In Honduras, about one in three formal workers earns sub-minimum wages. As minimum wages increase, so does the level of non-compliance. I estimate that about 36 percent more formal sector workers, who should be receiving minimum wages, are underpaid by their employers.[ref]As Nathaniel pointed out to me, this indicates that Ham’s findings underestimate the negative impact of the minimum wage. If minimum wage laws were strictly complied with, the negative effects would be even greater.[/ref]

Ham concludes, “My findings imply that the costs of minimum wage increases outweigh their benefits in developing countries. The policy implication is that setting high minimum wages has detrimental effects on labor markets, well-being, and compliance.”

Hans Rosling: Combating Ignorance

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Hans Rosling

I’ve mentioned Swedish statistician Hans Rosling in a couple posts here at Difficult Run. A recent article in Nature[ref]Thanks to Robert Couch for the article.[/ref] takes a look at the influence Rosling is having throughout the world as a public intellectual. His graphics-based presentations[ref]See his site Gapminder.[/ref] of world poverty and health have helped audiences visualize the major changes that have taken place over the last couple centuries. Cognitive scientist “[Steven] Pinker admires the animations that Rosling uses. One, which depicts countries as bubbles that migrate over time according to wealth, life span or family size, allows viewers to grasp multiple variables simultaneously. “It’s a stroke of genius,” Pinker says. “He gets our puny human brain to appreciate five dimensions.”” Rosling’s approach was undoubtedly influenced by his feeling that

neither his students nor his colleagues grasped extreme poverty. They pictured the poor as almost everyone in the ‘developing world’: an arbitrarily defined territory that includes nations as economically diverse as Sierra Leone, Argentina, China and Afghanistan. They thought it was all large family sizes and low life expectancies: only the poorest and most conflict-ridden countries served as their reference point. “They just make it about us and them; the West and the rest,” Rosling says. How could anyone hope to solve problems if they didn’t understand the different challenges faced, for example, by Congolese subsistence farmers far from paved roads and Brazilian street vendors in urban favelas? “Scientists want to do good, but the problem is that they don’t understand the world,” Rosling says.

The whole article is worth reading. While some of Rosling’s academic colleagues may not appreciate his work, I certainly do. Combating ignorance about the state of the world is a worthwhile endeavor.

You can test your knowledge of the world with this quiz.