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Saturday, December 27, 2014

Personal space

When contact changes minds: An experiment on transmission of support for gay equality

Michael LaCour & Donald Green, Science, 12 December 2014, Pages 1366-1369

Abstract:
Can a single conversation change minds on divisive social issues, such as same-sex marriage? A randomized placebo-controlled trial assessed whether gay (n = 22) or straight (n = 19) messengers were effective at encouraging voters (n = 972) to support same-sex marriage and whether attitude change persisted and spread to others in voters' social networks. The results, measured by an unrelated panel survey, show that both gay and straight canvassers produced large effects initially, but only gay canvassers' effects persisted in 3-week, 6-week, and 9-month follow-ups. We also find strong evidence of within-household transmission of opinion change, but only in the wake of conversations with gay canvassers. Contact with gay canvassers further caused substantial change in the ratings of gay men and lesbians more generally. These large, persistent, and contagious effects were confirmed by a follow-up experiment. Contact with minorities coupled with discussion of issues pertinent to them is capable of producing a cascade of opinion change.

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Fluidity in Sexual Identity, Unmeasured Heterogeneity, and the Earnings Effects of Sexual Orientation

Joseph Sabia, Industrial Relations, January 2015, Pages 33-58

Abstract:
Using data drawn from the National Longitudinal Study of Adolescent Health, this study (1) examines the sensitivity of the estimated earnings penalty of sexual minority status to family-level unobserved heterogeneity, and (2) explores whether the earnings effects of sexual orientation differ by the degree of fluidity in individuals' self-reported sexual identity over time. Evidence from sibling pairs suggests that unobserved family heterogeneity is not an important source of bias in the estimated relationship between sexual orientation and young adult earnings. I find that gay males and bisexuals earn lower wages than their heterosexual counterparts, while lesbians earn wages that are not significantly different from heterosexual females. Finally, I examine the role of fluidity in sexual orientation over time and find that males who are longer-term gay identifiers earn wages that are 26.4 percent lower than their consistently heterosexual-identifying counterparts.

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Aversive discrimination in employment interviews: Reducing effects of sexual orientation bias with accountability

Joel Nadler et al., Psychology of Sexual Orientation and Gender Diversity, December 2014, Pages 480-488

Abstract:
The effects of egalitarian hiring norms and accountability on ratings of gay and nongay job applicants were explored using theories of aversive discrimination. Participants (n = 311) from a Midwestern university rated a video interview of a moderately performing department head job applicant (gay man or nongay man) after receiving information about the position. Participants were randomly assigned to be given additional information about job-relatedness and affirmative action procedures or not (egalitarian norms), and were then told they would or would not have to explain their ratings (accountability). Consistent with aversive discrimination theory, participants rated the gay applicant less positively than the nongay applicant irrespective of self-reported and implicit heterosexist attitudes. Bias favoring the heterosexual applicant was found in the no accountability condition but no differences were seen between the gay and nongay applicant in the accountability condition. Our study did not find support of the effect of training focusing on egalitarian norms on bias in ratings. Organizations should recognize the potential bias that targets gay applicants and consider methods to incorporate accountability in order to mitigate discriminatory hiring practices.

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Fetal exposure to androgens, as indicated by digit ratios (2D:4D), increases men's agreeableness with women

D.S. Moskowitz et al., Personality and Individual Differences, March 2015, Pages 97-101

Abstract:
The ratio of the length of the second finger, or digit, to the fourth finger (2D:4D) is influenced by fetal exposure to androgens; a smaller ratio indicates greater androgen exposure. We used event contingent recording to investigate the relation between the 2D:4D ratio and social behavior. Participants completed multiple records of their behavior in events in naturalistic settings; records included information about situational features such as the gender of the person with whom the person was interacting. Men were more agreeable towards women than men; this effect was significantly greater in those with smaller 2D:4D ratios. Men with smaller 2D:4D ratios were also less quarrelsome towards women than towards men. The 2D:4D ratio did not influence social behavior in women. The hormonal environment in which the male fetal brain develops may influence adult social behavior in specific contexts.

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Testing for Discrimination against Lesbians of Different Marital Status: A Field Experiment

Doris Weichselbaumer, Industrial Relations, January 2015, Pages 131-161

Abstract:
In this paper, I conduct a correspondence testing experiment to examine sexual orientation discrimination against lesbians in Germany. I sent applications from four fictional female characters in response to job advertisements in Munich and Berlin: a heterosexual single, a married heterosexual, a single lesbian, and a lesbian who is in a "same-sex registered partnership." While single lesbians and lesbians in a registered partnership are equally discriminated in comparison to the heterosexual women in the city of Munich, I found no discrimination based on sexual orientation in Berlin. Furthermore, for a subset of the data we can compare the effects of a randomized versus a paired testing approach, which suggests that under certain conditions, due to increased conspicuity, the paired testing approach may lead to biased results.

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A Minority Stress-Emotion Regulation Model of Sexual Compulsivity Among Highly Sexually Active Gay and Bisexual Men

John Pachankis et al., Health Psychology, forthcoming

Objective: Sexual compulsivity represents a significant public health concern among gay and bisexual men, given its co-occurrence with other mental health problems and HIV infection. The purpose of this study was to examine a model of sexual compulsivity based on minority stress theory and emotion regulation models of mental health among gay and bisexual men.

Method: Gay and bisexual men in New York City reporting at least nine past-90-day sexual partners (n = 374) completed measures of distal minority stressors (i.e., boyhood gender nonconformity and peer rejection, adulthood perceived discrimination), hypothesized proximal minority stress mediators (i.e., rejection sensitivity, internalized homonegativity), hypothesized universal mediators (i.e., emotion dysregulation, depression, and anxiety), and sexual compulsivity.

Results: The hypothesized model fit the data well (RMSEA = 0.05, CFI = 0.98, TLI = 0.95, SRMR = 0.03). Distal minority stress processes (e.g., adulthood discrimination) were generally found to confer risk for both proximal minority stressors (e.g., internalized homonegativity) and emotion dysregulation. Proximal minority stressors and emotion dysregulation, in turn, generally predicted sexual compulsivity both directly and indirectly through anxiety and depression.

Conclusions: The final model suggests that gay-specific (e.g., internalized homonegativity) and universal (e.g., emotion dysregulation) processes represent potential treatment targets to attenuate the impact of minority stress on gay and bisexual men's sexual health. Tests of interventions that address these targets to treat sexual compulsivity among gay and bisexual men represent a promising future research endeavor.

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Testing the Affiliation Hypothesis of Homoerotic Motivation in Humans: The Effects of Progesterone and Priming

Diana Fleischman, Daniel Fessler & Argine Evelyn Cholakians, Archives of Sexual Behavior, forthcoming

Abstract:
The frequency of homoerotic behavior among individuals who do not identify as having an exclusively homosexual sexual orientation suggests that such behavior potentially has adaptive value. Here, we define homoerotic behavior as intimate erotic contact between members of the same sex and affiliation as the motivation to make and maintain social bonds. Among both male and female nonhuman primates, affiliation is one of the main drivers of homoerotic behavior. Correspondingly, in humans, both across cultures and across historical periods, homoerotic behavior appears to play a role in promoting social bonds. However, to date, the affiliation explanation of human homoerotic behavior has not been adequately tested experimentally. We developed a measure of homoerotic motivation with a sample of 244 men and women. Next, we found that, in women (n = 92), homoerotic motivation was positively associated with progesterone, a hormone that has been shown to promote affiliative bonding. Lastly, we explored the effects of affiliative contexts on homoerotic motivation in men (n = 59), finding that men in an affiliative priming condition were more likely to endorse engaging in homoerotic behavior compared to those primed with neutral or sexual concepts, and this effect was more pronounced in men with high progesterone. These findings constitute the first experimental support for the affiliation account of the evolution of homoerotic motivation in humans.

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Labor-Market Specialization within Same-Sex and Difference-Sex Couples

Christopher Jepsen & Lisa Jepsen, Industrial Relations, January 2015, Pages 109-130

Abstract:
We use data from the 2000 decennial U.S. Census to compare differences in earnings, hours worked, and labor-force participation between members of different household types, including same-sex couples, different-sex couples, and roommates. Both same-sex and different-sex couples exhibit some degree of household specialization, whereas roommates show little or no degree of specialization. Of all household types, married couples exhibit by far the highest degree of specialization with respect to labor-market outcomes. With respect to differences in earnings and hours, gay male couples are more similar to married couples than lesbian or unmarried heterosexual couples are to married couples.

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Racial and Sexual Identities as Potential Buffers to Risky Sexual Behavior for Black Gay and Bisexual Emerging Adult Men

Ja'Nina Walker, Buffie Longmire-Avital & Sarit Golub, Health Psychology, forthcoming

Objective: Emerging adult Black gay and bisexual men represent intersections of social groups that are greatly impacted by the HIV epidemic (i.e., young, Black, gay/bisexual). Given their vulnerability to HIV, it is imperative to understand how these social identities may also promote resilience, and point to protective factors that may aid in our development of population-specific HIV prevention interventions.

Method: An online survey of the experiences of Black lesbian, gay, and bisexual young adults was administered. The current study assessed the intersection of identities and sexual risk behavior for a subsample of this population; 120 Black gay and bisexual young men (Mage = 21.79, SD = 3.08).

Results: Using hierarchical linear regression, higher levels of racial centrality (degree to which being Black is central to ones identity) and racial public regard (perceptions of societal views toward Black Americans) predicted decreases in risky sexual behavior (total anal sex acts and unprotected anal sex acts).

Conclusion: Researchers and interventionist should consider the ways in which racial centrality may be a critical tool in our efforts to decrease the HIV epidemic among young Black gay and bisexual men in America.

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Unprotected Anal Intercourse With Casual Male Partners in Urban Gay, Bisexual, and Other Men Who Have Sex With Men

David Pantalone et al., American Journal of Public Health, January 2015, Pages 103-110

Objectives: We investigated trends in, and predictors of, unprotected anal intercourse (UAI) with casual male partners of gay, bisexual, and other men who have sex with men (GBMSM).

Methods: We analyzed data from cross-sectional intercept surveys conducted annually (2003-2008) at 2 large lesbian, gay, and bisexual community events in New York City. Survey data covered GBMSM's highest-risk behaviors for HIV acquisition (HIV-negative or unknown status GBMSM, any UAI) and transmission (HIV-positive GBMSM, any serodiscordant unprotected UAI).

Results: Across years, 32.3% to 51.5% of the HIV-negative or unknown status men endorsed any UAI, and 36.9% to 52.9% of the HIV-positive men endorsed serodiscordant UAI. We observed a few statistically significant fluctuations in engagement in high-risk behavior. However, these do not appear to constitute meaningful trends. Similarly, in some years, one or another demographic predictor of UAI was significant. Across years, however, no reliable pattern emerged.

Conclusions: A significant proportion of urban GBMSM engage in high-risk sex, regardless of serostatus. No consistent demographic predictors emerged, implying a need for broad-based interventions that target all GBMSM.

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The Sexual Orientation Wage Gap for Racial Minorities

Jamie Douglas & Michael Steinberger, Industrial Relations, January 2015, Pages 59-108

Abstract:
We explore the sexual orientation wage gap across four race and ethnic groups in the 2000 U.S. Census: Asian, black, Hispanic, and white. Using decomposition analysis, we explore if racial minority groups experience the same pattern of sexual orientation wage differences as their white counterparts, and how racial and sexual orientation wage differences interact over the distribution of wages. For men, we show a combined unexplained penalty greater than the sum of their individual unexplained race and sexual-orientation differentials. Racial minority lesbians, however, earn higher wages than what the sum of their racial and sexual-orientation analyses would suggest.

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2D:4D and Life Outcomes: Evidence from the Russian RLMS Survey

John Nye, Maxim Bryukhanov & Sergiy Polyachenko, George Mason University Working Paper, November 2014

Abstract:
Using a large sample drawn from families in the Moscow and Moscow region which are part of the Russian RMLS longitudinal survey we observe clear links between measured 2D:4D digit ratios and a variety of life outcome measures, even with the inclusion of multiple controls. Contributing to existing empirical findings, we found statistically significant empirical associations of 2D:4D with higher educational attainment, occupational outcomes, knowledge of foreign language, smoking, engaging in sport activities and with some aspects of respondent's self-esteem. In general, the character of detected empirical associations are different for women and men, as it was documented in our previous studies.

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Balance Without Equality: Just World Beliefs, the Gay Affluence Myth, and Support for Gay Rights

Vanessa Hettinger & Joseph Vandello, Social Justice Research, December 2014, Pages 444-463

Abstract:
The harmfulness of negative stereotypes toward gay and lesbian people has been established, but the effect of positive stereotypes has not been thoroughly examined. Gay and lesbian Americans continue to struggle against interpersonal and institutionalized discrimination, yet many people do not see them as a politically disadvantaged group, and voter support for gay rights has been inconsistent and somewhat unpredictable. Drawing on previous research regarding reactions to disadvantaged and advantaged targets, we examined the social cognitive underpinnings of support for gay rights. After accounting for general anti-gay attitudes and degree of religious affiliation, we found that global endorsement of just world beliefs negatively predicted support for gay rights, and that this effect was mediated by an inclination to perceive discrimination against gay and lesbian people as less of an issue in American society. Additionally, we found that endorsement of the 'gay affluence' stereotype also negatively predicted support of gay rights, particularly among non-student adults, and that this effect was moderated by character beliefs about gay and lesbian people pertaining to wealth-deservingness.

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How the Right Usurped the Queer Agenda: Frame Co-optation in Political Discourse

Mary Burke & Mary Bernstein, Sociological Forum, December 2014, Pages 830-850

Abstract:
This article draws on a case study of lesbian, gay, bisexual, and transgender (LGBT) and queer politics in Vermont to explain the conditions under which radical discourse gains and loses a public voice. In contrast to claims that the marginalization of queer discourse is due to silencing by LGBT rights activists or to litigation strategies, we argue that variation in queer discourse over time is the result of the co-optation of queer discourse and goals by opponents. Extending the social movement literature on frame variation, we argue that opponents co-opt discourse when they adopt aspects of the content of a movement's discourse, while subverting its intent. We show that conservative LGBT rights opponents co-opted queer discourse. As a result, queer positions lost their viability as the discursive field in which those arguments were made was fundamentally altered. Because queer positions became less tenable, we see the withdrawal of queer discourse from the mainstream and alternative LGBT media. Our work both supports and builds on research on frame variation by demonstrating how discourse can change over time in response to the interplay between changing aspects of the political and cultural landscape and the discourse of opponents.

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Social Networks and Sexual Orientation Disparities in Tobacco and Alcohol Use

Mark Hatzenbuehler, Katie McLaughlin & Ziming Xuan, Journal of Studies on Alcohol and Drugs, January 2015, Pages, 117-126

Objective: The purpose of this study was to examine whether the composition of social networks contributes to sexual orientation disparities in substance use and misuse.

Method: Data were obtained from the National Longitudinal Study of Adolescent Health (Add Health), a nationally representative cohort study of adolescents (N = 20,745). Wave 1 collected extensive information about the social networks of participants through peer nomination inventories.

Results: Same- and both-sex-attracted youths had higher frequency/quantity of tobacco use in their peer networks than did opposite-sex-attracted youths, and both-sex-attracted youths had higher frequency/quantity of alcohol use and misuse in their peer networks than opposite-sex-attracted youths. Among same- and both-sex-attracted youths, greater frequency/quantity of tobacco use in one's social network predicted greater use of cigarettes. In addition, greater frequency/quantity of peers' drinking and drinking to intoxication predicted more alcohol use and alcohol misuse in the both-sex-attracted group. These social network factors mediated sexual orientation-related disparities in tobacco use for both- and same-sex-attracted youths. Moreover, sexual orientation disparities in alcohol misuse were mediated by social network characteristics for the same-sex and both-sex-attracted youths. Importantly, sexual minority adolescents were no more likely to have other sexual minorities in their social networks than were sexual majority youths, ruling out an alternative explanation for our results.

Conclusions: These findings highlight the importance of social networks as correlates of substance use behaviors among sexual minority youths and as potential pathways explaining sexual orientation disparities in substance use outcomes.

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Assisted Gestation and Transgender Women

Timothy Murphy, Bioethics, forthcoming

Abstract:
Developments in uterus transplant put assisted gestation within meaningful range of clinical success for women with uterine infertility who want to gestate children. Should this kind of transplantation prove routine and effective for those women, would there be any morally significant reason why men or transgender women should not be eligible for the same opportunity for gestation? Getting to the point of safe and effective uterus transplantation for those parties would require a focused line of research, over and above the study of uterus transplantation for non-transgender women. Some commentators object to the idea that the state has any duty to sponsor research of this kind. They would limit all publicly-funded fertility research to sex-typical ways of having children, which they construe as the basis of reproductive rights. This objection has no force against privately-funded research, of course, and in any case not all social expenditures are responses to 'rights' properly speaking. Another possible objection raised against gestation by transgender women is that it could alter the social meaning of sexed bodies. This line of argument fails, however, to substantiate a meaningful objection to gestation by transgender women because social meanings of sexed bodies do not remain constant and because the change in this case would not elicit social effects significant enough to justify closing off gestation to transgender women as a class.

By KEVIN LEWIS | 09:00:00 AM

Friday, December 26, 2014

Fiscal year

"The Federal Emergency Management Agency is spending an increasing portion of its disaster relief budget on administrative costs such as salaries for government workers and could save hundreds of millions of dollars by better controlling such expenses, federal auditors have found." [WP]

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"Texas toll roads face mounting opposition, including within the state's Republican Party, which amended its platform this year to add language hostile to toll roads. 'A large segment of our party believes in having free access to transportation,' said Steve Munisteri, chairman of the Republican Party of Texas." [WSJ]

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"Some companies have been called economic traitors for seeking to lower their tax bills by moving overseas. But life insurers are accomplishing the same goal without leaving the country, saving as much as $100 billion in federal taxes, much of it in the last several years. The insurers are taking advantage of fierce competition for their business among states, which have passed special laws that allow the companies to pull cash away from reserves they are required to keep to pay claims. The insurers use the money to pay for bonuses, shareholder dividends, acquisitions and other projects, and because of complicated accounting maneuvers, the money escapes federal taxation." [NYT]

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"Officials from more than 50 countries signed an agreement...under the auspices of the Organization for Economic Cooperation and Development...to collect and exchange information on taxpayers' assets and income outside their home country, including bank accounts, interest payments, bank balances, and beneficial ownership...While states supporting the initiative include Switzerland, Liechtenstein, the British Virgin Islands and the Cayman Islands, the U.S. isn't a signatory [though the] U.S. Foreign Account Tax Compliance Act, or Fatca, had added momentum to the debate about automatic exchange of information in Europe" [WSJ]

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Taxing across Borders: Tracking Personal Wealth and Corporate Profits

Gabriel Zucman, Journal of Economic Perspectives, Fall 2014, Pages 121-148

Abstract:
This article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. US corporations book 20 percent of their profits in tax havens, a tenfold increase since 1980; their effective tax rate has declined from 30 to 20 percent over the last 15 years, and about two-thirds of this decline can be attributed to increased international tax avoidance. Globally, 8 percent of the world's personal financial wealth is held offshore, costing more than $200 billion to governments every year. Despite ambitious policy initiatives, profit shifting to tax havens and offshore wealth are rising. I discuss the recent proposals made to address these issues, and I argue that the main objective should be to create a world financial registry.

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Changes in Corporate Effective Tax Rates Over the Past Twenty-Five Years

Scott Dyreng, Duke University Working Paper, November 2014

Abstract:
This paper investigates systematic changes in corporate effective tax rates over the past twenty-five years. We find that effective tax rates have decreased significantly. Contrary to conventional wisdom, we find that the decline in effective tax rates is not concentrated in multinational firms; effective tax rates have declined at approximately the same rate for both multinational and domestic firms. Moreover, we find that within multinational firms, both foreign and domestic effective rates have decreased. Finally, we find that changes in firm characteristics and declining foreign statutory tax rates explain little of the overall decrease in effective rates. The findings have broad implications for tax research, as well as for current policy debates about reforming the corporate income tax.

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How Does Tax Progressivity and Household Heterogeneity Affect Laffer Curves?

Hans Holter, Dirk Krueger & Serhiy Stepanchuk, NBER Working Paper, November 2014

Abstract:
How much additional tax revenue can the government generate by increasing labor income taxes? In this paper we provide a quantitative answer to this question, and study the importance of the progressivity of the tax schedule for the ability of the government to generate tax revenues. We develop a rich overlapping generations model featuring an explicit family structure, extensive and intensive margins of labor supply, endogenous accumulation of labor market experience as well as standard intertemporal consumption-savings choices in the presence of uninsurable idiosyncratic labor productivity risk. We calibrate the model to US macro, micro and tax data and characterize the labor income tax Laffer curve under the current choice of the progressivity of the labor income tax code as well as when varying progressivity. We find that more progressive labor income taxes significantly reduce tax revenues. For the US, converting to a flat tax code raises the peak of the Laffer curve by 6%, whereas converting to a tax system with progressivity similar to Denmark would lower the peak by 7%. We also show that, relative to a representative agent economy tax revenues are less sensitive to the progressivity of the tax code in our economy. This finding is due to the fact that labor supply of two earner households is less elastic (along the intensive margin) and the endogenous accumulation of labor market experience makes labor supply of females less elastic (around the extensive margin) to changes in tax progressivity.

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Economic Freedom and State Bond Ratings

Ariel Belasen, Rik Hafer & Shrikant Jategaonkar, Contemporary Economic Policy, forthcoming

Abstract:
Are state bond ratings, ceteris paribus, related to economic freedom? We test for the relationship between economic freedom and an aggregate index comprised of ratings by Standard & Poor, Moody's, and Fitch. We also test for a relationship between economic freedom and the ratings by these three agencies individually. With a sample covering all 50 states for the period 1995–2008, the evidence strongly indicates that state bond ratings are positively and significantly related to overall economic freedom as well as three sub-categories of economic freedom. Our results show that the quantitative impact of economic freedom on bond ratings is comparable to the effect of state real income and the unemployment rate.

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What happened to and in Detroit?

John McDonald, Urban Studies, December 2014, Pages 3309-3329

Abstract:
The paper describes the fiscal status of the city of Detroit leading up to its filing for bankruptcy on 18 July 2013. Then the economic history of metropolitan Detroit and the city of Detroit from 1950 to the present is examined in an effort to answer these questions: Why did Detroit file for bankruptcy – not some other major city? And why now and not earlier? The paper concludes that, while Detroit and several other cities in the northeastern region suffered major population and employment losses and went through a long period of urban crisis between roughly 1970 and 1990, the severity of Detroit's problems compared with other cities did not emerge fully until the most recent decade.

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Is Fiscal Stimulus a Good Idea?

Ray Fair, Business Economics, October 2014, Pages 244–252

Abstract:
The results in this paper, using a structural multicountry macroeconometric model, suggest that there is at most a small gain from fiscal stimulus in the form of increased transfer payments or increased tax deductions if the increased debt generated must eventually be paid back. The gain in output and employment on the way up is roughly offset by the loss in output and employment on the way down as the debt from the initial stimulus is paid off. This conclusion is robust to different assumptions about monetary policy. To the extent that there is a gain, the longer one waits to begin paying the debt back the better. Possible caveats regarding the model used are that (1) monetary policy is not powerful enough to keep the economy at full employment, (2) potential output is taken to be exogenous, (3) possible permanent effects on asset prices and animal spirits from a stimulus are not taken into account, and (4) the model does not have the feature that in really bad times the economy might collapse without a stimulus.

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Why Market Returns Favor Democrats in the White House

Sang Hyun (Hugh) Kim & Michael Long, Rutgers Working Paper, November 2014

Abstract:
This study explains why the equity market earns greater returns for bearing risk when a Democrat is President in the USA versus a Republican. We look at data from 1929 through 2012. The data show that the value weighted return minus the corresponding period's risk free rate is 10.83% when a Democrat is President, versus a corresponding return of -1.20% under Republican Presidents. In considering the more recent post-Kennedy time period, the excess returns are still large with 9.23% versus 0.16%. Starting with a basic valuation of a firm, we see the two basic macroeconomic arguments that affect market value between the two parties: differences in risk free interest rates and differences in economic growth. On average the Democrats follow a policy of low interest rates. The rate of return on short term T-bills averages 4.55% under the GOP and a 2.48% under Democrats. Further, the Democrats overall economic policies create a higher average real growth rate with a 4.8% average versus only 1.8% under Republican administrations. This results in higher dividend growth rates under Democrats of 2.46% versus 1.96% under the GOP administrations. These together explain the differences in equity market returns. What we cannot determine is what specific policies cause the lower risk free interest rates or the higher economic growth rates under Democrats as opposed to the Republicans.

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To Cut or Not to Cut? On the Impact of Corporate Taxes on Employment and Income

Alexander Ljungqvist & Michael Smolyansky, NBER Working Paper, December 2014

Abstract:
Do corporate tax increases destroy jobs? And do corporate tax cuts boost employment? Answering these questions has proved empirically challenging. We propose an identification strategy that exploits variation in corporate income tax rates across U.S. states. Comparing contiguous counties straddling state borders over the period 1970 to 2010, we find that increases in corporate tax rates lead to significant reductions in employment and income. We find little evidence that corporate tax cuts boost economic activity, unless implemented during recessions when they lead to significant increases in employment and income. Our spatial-discontinuity approach permits a causal interpretation of these findings by both establishing a plausible counterfactual and overcoming biases resulting from the fact that tax changes are often prompted by changes in economic conditions.

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Are State Tax Amnesty Programs Associated with Financial Reporting Irregularities?

Neal Buckwalter et al., Public Finance Review, November 2014, Pages 774-799

Abstract:
This article investigates the relation between state tax amnesties and financial reporting irregularities. State tax amnesty programs, which potentially signal a lax regulatory enforcement environment, provide a unique setting in which to examine the effects of state tax authorities on non-tax financial reporting behavior. The results suggest that firms headquartered in states offering a tax amnesty program are more likely to begin engaging in a financial reporting irregularity during the amnesty period. Furthermore, the results show that the observed increase in financial reporting irregularities occurs only during periods of repeat, not initial, amnesty programs. These findings suggest state tax amnesties have previously unexplored adverse effects on managers' behavior.

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The economic effects of financial derivatives on corporate tax avoidance

Michael Donohoe, Journal of Accounting and Economics, February 2015, Pages 1–24

Abstract:
This study estimates the corporate tax savings from financial derivatives. I document a 3.6 and 4.4 percentage point reduction in three-year current and cash effective tax rates (ETRs), respectively, after a firm initiates a derivatives program. The decline in cash ETR equates to $10.69 million in tax savings for the average firm and $4.0 billion for the entire sample of 375 new derivatives users. Of these amounts, $8.75 million and $3.3 billion, respectively, are incremental to tax savings that theory suggests are a byproduct of risk management. Collectively, these findings provide economic insight into the prevalence of derivatives-based tax avoidance.

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Say it with Candy: The Power of Framing Tax Increases as Items

Geneviève Risner & Daniel Bergan, Journal of Political Marketing, forthcoming

Abstract:
Framing tax increases as frequent purchases appears to be a popular message strategy to generate donations and elicit support for policies. We test whether this strategy is effective at obtaining support for tax increases through two survey experiments. Results demonstrate that this message strategy - framing tax increases in terms of items - is more effective than stating the increase in terms of a yearly or weekly amount. This strategy appears to be effective when the amount of a tax increase is framed as hedonic item and appears to be particularly effective as the tax amount requested increases and among those uninvolved with the issue under consideration.

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Simulating the Effects of the Tax Credit Program of the Michigan Economic Growth Authority on Job Creation and Fiscal Benefits

Timothy Bartik & George Erickcek, Economic Development Quarterly, November 2014, Pages 314-327

Abstract:
This article simulates job and fiscal impacts of the Michigan Economic Growth Authority's tax credit program for job creation, commonly called "MEGA." Under plausible assumptions about how such credits affect business location decisions, the net costs per job created of the MEGA program are simulated to be of modest size. The job creation impacts of MEGA are simulated to be considerably larger than devoting similar dollar resources to general business tax cuts. The simulation methodology developed here is applicable to incentives in other states.

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Economic Stimulus and the Tax Code: The Impact of the Gulf Opportunity Zone

James Williamson & John Pender, Public Finance Review, forthcoming

Abstract:
This article investigates the impact of geographically targeted Federal tax relief enacted after Hurricane Katrina in 2005. The relief included provisions to replace lost income, mitigate uninsured losses, and stimulate business activity. Using propensity score and Mahalanobis metric (MM) matching methods, we develop difference-in-differences (DD) estimates of the impacts of these tax incentives on income and employment growth in the Gulf Opportunity Zone. Results show that per capita personal income, including earnings, increased more rapidly in counties treated with the tax provisions than in similar untreated counties, though the results only apply to counties with minimal damage. We do not find strong evidence of impacts on employment or population growth.

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Retiree health insurance for public school employees: Does it affect retirement?

Maria Fitzpatrick, Journal of Health Economics, December 2014, Pages 88–98

Abstract:
Despite the widespread provision of retiree health insurance for public sector workers, little attention has been paid to its effects on employee retirement. This is in contrast to the large literature on health-insurance-induced "job-lock" in the private sector. I use the introduction of retiree health insurance for public school employees in combination with administrative data on their retirement to identify the effects of retiree health insurance. As expected, the availability of retiree health insurance for older workers allows employees to retire earlier. These behavioral changes have budgetary implications, likely making the programs self-financing rather than costly to taxpayers.

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Buying Their Votes? A Study of Local Tax-Price Discrimination

Randall Reback, Economic Inquiry, forthcoming

Abstract:
A population's demographic composition may affect political support for various public services. This article examines whether the aging-in-place of local residents decreases financial support for public schools in the United States. I expand on previous empirical work by examining whether tax-price reductions offered to elderly homeowners moderate their effect on local school revenues. The results reveal that an aging population structure substantially decreases school revenues, unless elderly homeowners receive state-financed reductions in their local tax-prices. Sizable differences hold even when comparing school districts located near each other but on opposite sides of state borders. Given the imminent aging of the population structure in the United States and many other developed countries, governments' targeted tax reduction policies could have important effects on equilibrium school revenues.

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Perceptions of Tax Expenditures and Direct Spending: A Survey Experiment

Conor Clarke & Edward Fox, Yale Law Journal, forthcoming

Abstract:
This paper presents the results of an original survey experiment on whether the public prefers "tax expenditures" to "direct outlays" — that is, whether members of the public are more likely to support government spending that takes the form of a tax credit rather than a check or cash. Using a survey that spans a wide variety of policy areas — and with important variations in wording and information — we show that the public strongly prefers tax expenditures even when the "economic substance" of the proposed policies is identical. We also show that the public views tax expenditures as less costly than equivalent direct outlays. These results support a longstanding but largely unstudied hypothesis that tax expenditures "hide" the costs of government spending, and have implications for why tax expenditures have continued to grow in size and complexity.

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Does Credit-Card Information Reporting Improve Small-Business Tax Compliance?

Joel Slemrod et al., University of Michigan Working Paper, October 2014

Abstract:
Third-party information has greatly decreased tax underreporting, but substantial underreporting persists where third-party information is not present. We investigate the preliminary response of businesses filing a Schedule C to the introduction in 2011 of Form 1099-K, which provides the Internal Revenue Service (IRS) and taxpayers with information about small businesses' sales done by payment card and other electronic means. We find evidence that taxpayers with high prior noncompliance and/or sufficient use of electronic payment methods did adjust their behavior in response to the new information returns. Theory and distributional analysis isolate a subset of taxpayers who respond to information reporting by reporting receipts equal to or slightly exceeding the amount of receipts reported on 1099-K. Information reporting made these taxpayers much more likely to file Schedule C and, conditional on filing a Schedule C, increased their reported receipts by up to 24 percent. However, firms largely offset this change with increased reported expenses (an area not subject to information reporting), so that the overall effect on reported net taxable income was significantly smaller than would otherwise be expected without the increase in expenses.

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The Effect of Supermajority Vote Requirements for Tax Increase in California: A Synthetic Control Method Approach

Soomi Lee, State Politics & Policy Quarterly, December 2014, Pages 414-436

Abstract:
My article examines whether supermajority vote requirements (SMVR) to raise taxes in California's constitution suppresses state tax burdens. SMVR is a politically popular but contentious measure that 16 states have adopted and many other states have attempted to adopt. The rationale behind the rule is to contain the growth of government by making it costly to form a winning coalition to raise taxes. Nonetheless, the current empirical literature is mixed at best and suffers from causal inference. I take a different approach from extant literature and estimate the causal effect of SMVR on tax burdens in California by using synthetic control methods. The results show that, from 1979 to 2008, SMVR reduced the state nonproperty tax burden by an average of $1.44 per $100 of personal income, which is equivalent to 21% of the total tax burden for each year. The effect of SMVR was immediate after its adoption, but has abated over time.

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Lobbying Behavior of Governmental Entities: Evidence from Public Pension Accounting Rules

Abigail Allen, Harvard Working Paper, October 2014

Abstract:
In an effort to reform public pension reporting, the Governmental Accounting Standards Board (GASB) recently issued Statements 67 and 68. We examine the lobbying behavior of state governments in the development of these standards. Consistent with opportunistic motivations, we find that states' opposition to the liability increasing provisions contained in these standards is increasing in the severity of pension plan underfunding, state budget deficits, and the use of aggressive pension assumptions. We also find that opposing states face greater pressure from unions and stricter balanced budget constraints. We contrast these findings to the lobbying behavior of the states' financial statement users: public employees, credit analysts, and the broader citizenry. We find evidence user support for liability increasing provisions is amplified in states with poorly funded plans and large budget deficits. We also find that support varies by user type: public employees overwhelmingly oppose the standards, relative to credit analysts and citizens but the difference is moderated in states with constitutionally guaranteed benefits. This finding is consistent with the expectation that pension accounting reform will motivate cuts in pension benefits as opposed to increased levels of funding from the governments.

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Optimal Fiscal Limits

Stephen Coate, NBER Working Paper, October 2014

Abstract:
This paper studies the optimal design of fiscal limits in the context of a simple political economy model. The model features a single politician and a representative voter. The politician is responsible for choosing the level of public spending for the voter but may be biased in favor of spending. The voter sets a spending limit and requires that the politician have voter approval to exceed it. This limit must be set before the voter's preferences for public spending are fully known. The paper first solves for the optimal limit and explains how it depends upon the degree of politician bias and the nature of the uncertainty concerning the voter's preferred spending level. A dynamic version of the model is then analyzed and policies which limit the rate of growth of spending are shown to dominate those that cap spending to be below some fixed fraction of community income.

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Privatization, Business Attraction, and Social Services across the United States: Local Governments' Use of Market-Oriented, Neoliberal Policies in the Post-2000 Period

Linda Lobao, Lazarus Adua & Gregory Hooks, Social Problems, November 2014, Pages 644-672

Abstract:
Privatization, business attraction incentives, and limited social service provision are market-oriented policies that broadly concern social scientists. These policies are conventionally assumed to be widely implemented across the United States, a world model of neoliberal development. This study takes a new look at these policies, providing a first view of how they unfold across the nation at a geographic scale that drills down to the local state. We document the extent to which localities privatized their public services, used business attraction, and limited social service delivery in the last decade. Extending national-level theories of the welfare state, we focus on two sets of factors to explain where these policies are most likely to be utilized. The first, derived from the class-politics approach, emphasizes class interests such as business and unions and political-ideological context, and anticipates that these policies are utilized most in Republican leaning, pro-business, and distressed contexts. The second, derived from the political-institutional approach, emphasizes state capacity and path dependency as determinants. The analyses are based on over 1,700 localities, the majority of county governments, using unique policy data. Class-politics variables have modest relationship to neoliberal policies and show that business sector influence and public sector unions matter. The findings strongly support the importance of state capacity and path dependency. Overall our study challenges assumptions that acquiescence to neoliberal policies is widespread. Rather, we find evidence of resilience to these policies among communities across the United States.

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IRS Attention

Zahn Bozanic et al., Ohio State University Working Paper, November 2014

Abstract:
In its enforcement role, the IRS has access to substantial private information, but some have argued that it also accesses complementary public information from firms' financial statements. We employ a novel dataset that records the IRS's access to 10-Ks hosted on EDGAR, which we term IRS attention. We use the data to examine how the IRS monitors corporations, which we predict will be related to firm characteristics, tax avoidance characteristics, and tax-related disclosures in the 10-K, all of which plausibly complement its substantial private information. We find evidence that IRS attention is primarily a firm-level construct, as firm fixed effects and firm characteristics drive most of the variation in IRS attention. IRS attention is also associated with various measures of tax avoidance, such as the CASH ETR, UTB, and the number of disclosed subsidiaries in tax havens. Moreover, IRS attention has surged since the FASB required increased disclosure of tax contingencies under FIN 48, consistent with them serving as a "roadmap to tax avoidance," as pundits have conjectured. We next examine firms' responses to anticipated IRS examination of financial accounting disclosures. We find that after the implementation of Schedule UTP and Schedule M-3, which both increased the level of private tax reporting to the IRS, the amount of public disclosure in the tax footnote also increased, consistent with the perception of reduced proprietary costs of disclosure in the tax footnote among public firms. Overall, this study shows evidence of substantial IRS attention to financial statements and of an important interplay between IRS-required private disclosures and firms' public disclosure patterns.

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Do Powerful Politicians Really Cause Corporate Downsizing?

Jason Snyder & Ivo Welch, University of California Working Paper, September 2014

Abstract:
Cohen, Coval and Malloy (2011) suggested that increased government spending crowded out private corporate investment by publicly-traded corporations, as identified by changes in Congressional chairmanships. Our paper shows that this was incorrect. The magnitude of their reported crowding-out is implausibly large. Instead, their inference was due to an omitted variable. The Chairmanship of Texas Senator Lloyd Bentsen from 1987 to 1992 followed a large decline in oil prices from 1980 to 1986. Similar investment reductions also occurred contemporaneously in oil firms and oil states beyond Texas. Our paper also discusses other issues, such as standard-error clustering, Senate coding choices, and temporal alignment diagnostics, which carry even more importance in their other regressions. The answer to the question in the title is that there is no evidence that powerful politicians caused corporate downsizing.

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Reevaluating the Pursuit of Defense Investment

Marc Doussard, Economic Development Quarterly, November 2014, Pages 339-350

Abstract:
In 2015, the Pentagon will likely announce a round of military base closures and expansions with the power to remake regional economies throughout the United States. Current estimates of the impact of base realignments implicitly assume that military bases have similar economic impacts. But the military is a diverse institution engaged in thousands of distinct activities, each with their own benefits to local economies. Using detailed soldier, civilian, and contracting data from two army bases, this article compares the economic impact of the main activities in which military bases engage. Because military bases source their inputs from national defense procurement networks, the economic benefits of soldier-based activities are smaller than most economic development alternatives. This finding suggests that regions facing defense contracting cuts are significantly more economically vulnerable than regions facing base closures.

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Nudges and Learning: Evidence from Informational Interventions for Low-Income Taxpayers

Dayanand Manoli & Nicholas Turner, NBER Working Paper, November 2014

Abstract:
Do informational interventions create one-time nudges or permanent changes in behavior? We study how taxpayers respond to informational interventions that alert them of their eligibility for the Earned Income Tax Credit using population-level administrative tax data. The empirical analysis is based on a natural experiment in 2005, a randomized experiment in 2009, and quasi-random audits between 2006 and 2009. The evidence from each of these settings indicates that the informational interventions cause economically significant increases in EITC take-up in the short-term, but there are little to no long-term increases in EITC take-up.

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Reference-Dependent Preferences, Team Relocations, and Major League Expansion

Brad Humphreys & Li Zhou, Journal of Economic Behavior & Organization, January 2015, Pages 10–25

Abstract:
Professional sports teams receive large subsidies, some in excess of $500 million, from local governments for the construction of new facilities. These subsidies cannot be explained by tangible economic benefits, and estimates of the value of intangible benefits also fall short of typical subsidies. In this paper, we incorporate fans' reference-dependent preferences into a model of the bargaining between local governments and teams. The model predicts that teams use relocation threats to exploit fans' utility loss from team departures, a negative deviation from the status quo, to extract large subsidies from local governments. Fans' loss aversion provides an explanation of the current team distribution, and observed team relocation and league expansion decisions in North America. The model also highlights the importance of anti-trust exemptions of the leagues in creating credible relocation threats for existing teams.

By KEVIN LEWIS | 09:00:00 AM

Thursday, December 25, 2014

Born out

"Many demographers have forecast a recovery in births as the economy improves and more young people start having families. But while America’s 'baby bust' at least seems to be leveling off, the now-five-year-old economic recovery has yet to translate into an upturn in births...Meanwhile, the nation’s 'total fertility rate' — a statistical measure of how many children each woman is likely to have over her lifetime — also has dropped, to 1.86 from 1.88. That is below the 2.1 children needed to keep the population stable...While the nation’s overall fertility rate fell 1% last year, the rate rose slightly for non-Hispanic white women. Women in their 30s, who tend to be more financially stable, also saw their fertility rates rise." [WSJ]

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"Not as many married couples as expected are taking advantage of a loosening in China’s one-child policy that allows them to have two children if one spouse is an only child." [WSJ]

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Surgical Sterilization, Regret, and Race: Contemporary Patterns

Karina Shreffler et al., Social Science Research, March 2015, Pages 31–45

Abstract:
Surgical sterilization is a relatively permanent form of contraception that has been disproportionately used by Black, Hispanic, and Native American women in the United States in the past. We use a nationally representative sample of 4,609 women ages 25 to 45 to determine whether sterilization continues to be more common and consequential by race for reproductive-age women. Results indicate that Native American and Black women are more likely to be sterilized than non-Hispanic White women, and Hispanic and Native American women are more likely than non-Hispanic White women to report that their sterilization surgeries prevent them from conceiving children they want. Reasons for sterilization differ significantly by race. These findings suggest that stratified reproduction has not ended in the United States and that the patterns and consequences of sterilization continue to vary by race.

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Association Between the New Hampshire Parental Notification Law and Minors Undergoing Abortions in Northern New England

Lauren MacAfee, Jennifer Castle & Regan Theiler, Obstetrics & Gynecology, January 2015, Pages 170–174

Objective: To assess the association of the 2012 New Hampshire parental notification law with patterns of abortion in northern New England minors.

Methods: This was a retrospective cohort study examining all minors undergoing abortions at Planned Parenthood clinics in Vermont, New Hampshire, and Maine from 2011 to 2012.

Results: The number of abortions among minors in New Hampshire decreased from 95 to 50 (47%, 95% confidence interval [CI] 37.03–57.88; P=.015) from 2011 to 2012. Minors residing in Massachusetts, which has a parental consent law, accounted for 62% of this change. Abortions among New Hampshire minors decreased by 19% (from 57 to 46, 95% CI 10.05–31.91; P=.707), and minors did not seek more abortions at Planned Parenthood clinics in Vermont or Maine. The average age, gestational age, and number of second-trimester cases did not change. Parental awareness of the abortion increased from 2011 to 2012 in New Hampshire (54%, 95% CI 44.21–63.96 to 92%, 95% CI 80.65–97.36; P<.001); however, there was no difference in the overall rate of adult involvement during the study period. Four (8%) minors in New Hampshire used the judicial bypass option.

Conclusion: Implementation of the New Hampshire parental notification law correlated with a decrease in minors undergoing abortions at Planned Parenthood clinics in the state, largely as a result of a decrease in the number of minors coming from Massachusetts. There was an increase in parental involvement but no change in overall adult involvement, and use of the judicial bypass option or minors crossing state lines was uncommon.

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Disgust in pregnancy and fetus sex — Longitudinal study

Agnieszka Zelazniewicz & Boguslaw Pawlowski, Physiology & Behavior, February 2015, Pages 177–181

Abstract:
Disgust, an emotion triggering behavioral avoidance of pathogens, serves as a first line of defense against infections. Since behavior related to disgust involves some cost, the aversive reaction should be adjusted to the level of an individual's immunocompetence, and raise only when immunological function is lower (e.g. during pregnancy). We studied changes in disgust sensitivity in pregnant women, and tested if disgust sensitivity is related to a fetus's sex. 92 women participated in a three-stage research, answering the Disgust Scale-Revised questionnaire at each trimester of pregnancy. The result showed that total disgust and disgust sensitivity in the Core Domain were the highest in the first trimester (when maternal immunosuppression is also the highest), and decreased during pregnancy in women bearing daughters. Women bearing sons had relatively high disgust sensitivity persisting in the first and in the second trimester. The elevation in disgust sensitivity during the second trimester for mothers bearing male fetus can be explained by the necessity to protect for a longer time, a more ecologically sensitive fetus, and also herself when bearing a more energetically costly sex. The proximate mechanism may involve the differences in maternal testosterone and cortisol concentrations in the second trimester of pregnancy.

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Personality Traits Increasingly Important for Male Fertility: Evidence from Norway

Vegard Skirbekk & Morten Blekesaune, European Journal of Personality, November/December 2014, Pages 521–529

Abstract:
We study the relationship between personality traits and fertility using a survey of Norwegian men and women born from 1927 to 1968 (N = 7017 individuals). We found that personality relates to men's and women's fertility differently; conscientiousness decreases female fertility, openness decreases male fertility and extraversion raises the fertility of both sexes. Neuroticism depresses fertility for men, but only for those born after 1956. The lower male fertility in younger cohorts high in neuroticism cannot be explained by partnership status, income or education. The proportion of childless men (at age 40 years) has increased rapidly for Norwegian male cohorts from 1940 to 1970 (from about 15 to 25 per cent). For women, it has only increased marginally (from 10 to 13 per cent). Our findings suggest that this could be partly explained by the increasing importance of personality characteristics for men's probability of becoming fathers. Men that have certain personality traits may increasingly be avoiding the long-term commitment of having children, or their female partners are shunning entering this type of commitment with them. Childbearing in contemporary richer countries may be less likely to be influenced by economic necessities and more by individual partner characteristics, such as personality.

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Culled males, infant mortality and reproductive success in a pre-industrial Finnish population

Tim Bruckner et al., Proceedings of the Royal Society: Biological Sciences, 22 January 2015

Abstract:
Theoretical and empirical literature asserts that the sex ratio (i.e. M/F) at birth gauges the strength of selection in utero and cohort quality of males that survive to birth. We report the first individual-level test in humans, using detailed life-history data, of the ‘culled cohort’ hypothesis that males born to low annual sex ratio cohorts show lower than expected infant mortality and greater than expected lifetime reproductive success. We applied time-series and structural equation methods to a unique multigenerational dataset of a natural fertility population in nineteenth century Finland. We find that, consistent with culled cohorts, a 1 s.d. decline in the annual cohort sex ratio precedes an 8% decrease in the risk of male infant mortality. Males born to lower cohort sex ratios also successfully raised 4% more offspring to reproductive age than did males born to higher cohort sex ratios. The offspring result, however, falls just outside conventional levels of statistical significance. In historical Finland, the cohort sex ratio gauges selection against males in utero and predicts male infant mortality. The reproductive success findings, however, provide weak support for an evolutionarily adaptive explanation of male culling in utero.

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Easterlin Revisited: Relative Income and the Baby Boom

Matthew Hill, Explorations in Economic History, forthcoming

Abstract:
This paper reexamines the first viable and a still leading explanation for mid-twentieth century baby booms: Richard Easterlin's relative income hypothesis. He suggested that when incomes are higher than material aspirations (formed in childhood), birth rates would rise. This paper uses microeconomic data to formulate a measure of an individual's relative income. The use of microeconomic data allows the researcher to control for both state fixed effects and cohort fixed effects, both have been absent in previous examinations of Easterlin's hypothesis. The results of the empirical analysis are consistent with Easterlin's assertion that relative income influenced fertility decisions, although the effect operates only through childhood income. When the estimated effects are contextualized, they explain 12 percent of the U.S. baby boom.

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Terrorism and fertility: Evidence for a causal influence of terrorism on fertility

Claude Berrebi & Jordan Ostwald, Oxford Economic Papers, January 2015, Pages 63-82

Abstract:
Using a panel data set of 170 countries and terrorism data from 1970 to 2007, we find that terrorist attacks decrease fertility as measured by both total fertility rates and crude birth rates. Furthermore, by using a novel instrumental variable approach, we identify a causal link and address endogeneity concerns related to the possibility of stress, caused by rising birth rates or transitioning demographics, affecting terrorism. We find that on average, terrorist attacks decrease fertility, reducing both the expected number of children a woman has over her lifetime and the number of live births occurring during each year. The results are statistically significant and robust across a multitude of model specifications, varying measures of fertility, and differing measures of terrorism.

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Fertility and the Price of Children: Evidence from Slavery and Slave Emancipation

Marianne Wanamaker, Journal of Economic History, December 2014, Pages 1045-1071

Abstract:
Theories of the demographic transition often center on the rising price of children. A model of fertility derived from household production in the antebellum United States contains both own children and slaves as inputs. Changes in slaveholdings beget changes in the marginal product of the slaveowners’ own children and, hence, their price. I use panel data on slaveowning households between 1850 and 1870 to measure the slaveowners’ own fertility responses to exogenous changes in slaveholdings. Results indicate a strong, negative correlation between own child prices and fertility.

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Foetus or child? Abortion discourse and attributions of humanness

Małgorzata Mikołajczak & Michał Bilewicz, British Journal of Social Psychology, forthcoming

Abstract:
Due to moral, religious, and cultural sensibilities, the topic of abortion still gives rise to controversy. The ongoing public debate has become visibly polarized with the usage of the pro-life versus pro-choice rhetoric. The aim of the current research was to investigate whether the language used in abortion discourse can affect people's attitudes by changing their attributions of humanity to unborn. Across three experimental studies we showed that participants who read about a ‘foetus’, compared to a ‘child’ declared higher support for elective abortion (Study 1; N = 108), this effect can be explained by greater humanness, as reflected in human nature traits, attributed to the child (vs. the foetus; Study 2; N = 121). The effect is mediated uniquely by attribution of human nature, but not by human uniqueness traits (Study 3; N = 120). These findings serve as a starting point for discussion of the role of language in shaping attitudes on abortion and other morally ambiguous issues.

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Incidence of Emergency Department Visits and Complications After Abortion

Ushma Upadhyay et al.
Obstetrics & Gynecology, January 2015, Pages 175–183

Objective: To conduct a retrospective observational cohort study to estimate the abortion complication rate, including those diagnosed or treated at emergency departments (EDs).

Methods: Using 2009-2010 abortion data among women covered by the fee-for-service California Medicaid program and all subsequent health care for 6 weeks after having an abortion, we analyzed reasons for ED visits and estimated the abortion-related complication rate and the adjusted relative risk. Complications were defined as receiving an abortion-related diagnosis or treatment at any source of care within 6 weeks after an abortion. Major complications were defined as requiring hospital admission, surgery, or blood transfusion.

Results: A total of 54,911 abortions among 50,273 fee-for-service Medi-Cal beneficiaries were identified. Among all abortions, 1 of 16 (6.4%, n=3,531) was followed by an ED visit within 6 weeks but only 1 of 115 (0.87%, n=478) resulted in an ED visit for an abortion-related complication. Approximately 1 of 5,491 (0.03%, n=15) involved ambulance transfers to EDs on the day of the abortion. The major complication rate was 0.23% (n=126, 1/436): 0.31% (n=35) for medication abortion, 0.16% (n=57) for first-trimester aspiration abortion, and 0.41% (n=34) for second-trimester or later procedures. The total abortion-related complication rate including all sources of care including EDs and the original abortion facility was 2.1% (n=1,156): 5.2% (n=588) for medication abortion, 1.3% (n=438) for first-trimester aspiration abortion, and 1.5% (n=130) for second-trimester or later procedures.

Conclusion: Abortion complication rates are comparable to previously published rates even when ED visits are included and there is no loss to follow-up.

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Public Opinion About Stem Cell Research, 2002 to 2010

Matthew Nisbet & Amy Becker, Public Opinion Quarterly, Winter 2014, Pages 1003-1022

Abstract:
Analyzing available polling questions administered between 2002 and 2010, we review trends in public opinion about stem cell research. We specifically assess questions measuring public attention, knowledge, trust, and policy preferences. Across years, despite their consistently low levels of scientific knowledge and understanding, an increasing proportion of Americans supported government funding for embryonic stem cell research and viewed such research as morally acceptable. Variations related to question-wording effects, however, indicate that Americans remain relatively ambivalent about the moral trade-offs involved in research, suggesting that public opinion could change in relation to focusing events and political conditions.

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Valuing Stillbirths

John Phillips & Joseph Millum, Bioethics, forthcoming

Abstract:
Estimates of the burden of disease assess the mortality and morbidity that affect a population by producing summary measures of health such as quality-adjusted life years (QALYs) and disability-adjusted life years (DALYs). These measures typically do not include stillbirths (fetal deaths occurring during the later stages of pregnancy or during labor) among the negative health outcomes they count. Priority-setting decisions that rely on these measures are therefore likely to place little value on preventing the more than three million stillbirths that occur annually worldwide. In contrast, neonatal deaths, which occur in comparable numbers, have a substantial impact on burden of disease estimates and are commonly seen as a pressing health concern. In this article we argue in favor of incorporating unintended fetal deaths that occur late in pregnancy into estimates of the burden of disease. Our argument is based on the similarity between late-term fetuses and newborn infants and the assumption that protecting newborns is important. We respond to four objections to counting stillbirths: (1) that fetuses are not yet part of the population and so their deaths should not be included in measures of population health; (2) that valuing the prevention of stillbirths will undermine women's reproductive rights; (3) that including stillbirths implies that miscarriages (fetal deaths early in pregnancy) should also be included; and (4) that birth itself is in fact ethically significant. We conclude that our proposal is ethically preferable to current practice and, if adopted, is likely to lead to improved decisions about health spending.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, December 24, 2014

Those less fortunate

How Effective Is the Minimum Wage at Supporting the Poor?

Thomas MaCurdy, Journal of Political Economy, forthcoming

Abstract:
The efficacy of minimum wage policies as an antipoverty initiative depends on which families benefit from the increased earnings attributable to minimum wages and which families pay for these higher earnings. Proponents of these policies contend that employment impacts experienced by low-wage workers are negligible and, therefore, these workers do not pay. Instead proponents typically suggest that consumers pay for the higher labor costs through imperceptible increases in the prices of goods and services produced by low-wage labor. Adopting this "best-case" scenario from minimum-wage advocates, this study projects the consequences of the increase in the national minimum wage instituted in 1996 on the redistribution of resources among rich and poor families. Under this scenario, the minimum wage increase acts like a value-added or sales tax in its effect on consumer prices, a tax that is even more regressive than a typical state sales tax. With the proceeds of this national value-added tax collected to fund benefits, the 1996 increase in the minimum wage distributed the bulk of these benefits to one in four families nearly evenly across the income distribution. Far more poor families suffered reductions in resources than those who gained. As many rich families gained as poor families. These income transfer properties of the minimum wage document its considerable inefficiency as an antipoverty policy.

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Poverty and Aspirations Failure

Patricio Dalton, Sayantan Ghosal & Anandi Mani, Economic Journal, forthcoming

Abstract:
We develop a theoretical framework to study the psychology of poverty and 'aspirations failure', defined as the failure to aspire to one's own potential. In our framework, rich and the poor persons share the same preferences and same behavioural bias in setting aspirations. We show that poverty can exacerbate the effects of this behavioural bias leading to aspirations failure and hence, a behavioural poverty trap. Aspirations failure is a consequence of poverty, rather than a cause. We specify the conditions under which raising aspirations alone is sufficient to help escape from a poverty trap, even without relaxing material constraints.

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The Receipt of Subsidized Housing across Generations

Yana Kucheva, Population Research and Policy Review, December 2014, Pages 841-871

Abstract:
In this paper, I ask whether children who grow up in subsidized housing return to the program as adults. I use the Panel Study of Income Dynamics (PSID) and Inverse Probability of Treatment Weighting (IPTW) to compare children who grew up in subsidized housing to those who did not but lived in households eligible to receive the subsidy. I find that children who grew up in subsidized housing have small albeit statistically significant probabilities of returning to subsidized housing as adults.

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Critical Periods during Childhood and Adolescence

Gerard van den Berg et al., Journal of the European Economic Association, December 2014, Pages 1521-1557

Abstract:
We identify the ages that constitute sensitive (or critical) periods in children's development towards their adult health status, skills, and human capital. For this, we use data on families migrating into Sweden from countries that are poorer, with less healthy conditions. Late-life health is proxied by adult height and other adult outcomes. The relation between siblings' ages at migration and their adult outcomes allows us to estimate the causal effect of conditions at specific childhood ages. We effectively exploit that, for siblings, the migration occurs simultaneously in calendar time but at different developmental stages (ages). We find evidence that the period just before the puberty growth spurt constitutes a critical period for adult height and we find related critical periods for adult cognition, mental health, and education.

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Unemployment insurance effects on child academic outcomes: Results from the National Longitudinal Survey of Youth

Sharon Kukla-Acevedo & Colleen Heflin, Children and Youth Services Review, December 2014, Pages 246-252

Abstract:
Despite evidence linking parental unemployment spells and negative child outcomes, there is very little research that explores how participation in the Unemployment Insurance (UI) Program could buffer these effects. Using the National Longitudinal Survey of Youth 79 (NLSY79) and Children of the NLSY79 data, we estimate a series of fixed effects and instrumental variables models to estimate the relationship between UI participation and the Peabody Individual Achievement Test (math and reading comprehension). Once we control for the non-random selection process into UI participation, our results suggest a positive relationship between UI participation and PIAT math scores. None of the models suggests a negative influence of UI participation on child outcomes.

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Early Childhood WIC Participation, Cognitive Development and Academic Achievement

Margot Jackson, Social Science & Medicine, forthcoming

Abstract:
For the 22% of American children who live below the federal poverty line, and the additional 23% who live below twice that level, nutritional policy is part of the safety net against hunger and its negative effects on children's development. The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides steadily available food from the food groups essential for physical and cognitive development. The effects of WIC on dietary quality among participating women and children are strong and positive. Furthermore, there is a strong influence of nutrition on cognitive development and socioeconomic inequality. Yet, research on the non-health effects of U.S. child nutritional policy is scarce, despite the ultimate goal of health policies directed at children - to enable productive functioning across multiple social institutions over the life course. Using two nationally representative, longitudinal surveys of children - the Early Childhood Longitudinal Study, Birth Cohort (ECLS-B) and the Child Development Supplement (CDS) of the Panel Study of Income Dynamics - I examine how prenatal and early childhood exposure to WIC is associated in the short-term with cognitive development, and in the longer-term with reading and math learning. Results show that early WIC participation is associated with both cognitive and academic benefits. These findings suggest that WIC meaningfully contributes to children's educational prospects.

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The Prevalence and Economic Value of Doubling Up

Natasha Pilkauskas, Irwin Garfinkel & Sara McLanahan, Demography, October 2014, Pages 1667-1676

Abstract:
"Doubling up" (living with relatives or nonkin) is a common source of support for low-income families, yet no study to date has estimated its economic value relative to other types of public and private support. Using longitudinal data from the Fragile Families and Child Wellbeing Study, we examine the prevalence and economic value of doubling up among families with young children living in large American cities. We find that doubling up is a very important part of the private safety net in the first few years of a child's life, with nearly 50 % of mothers reporting at least one instance of doubling up by the time their child is 9 years old. The estimated rental savings from doubling up is significant and comparable in magnitude to other public and private transfers.

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Neighborhood Poverty and Allostatic Load in African American Youth

Gene Brody et al., Pediatrics, November 2014, Pages e1362-e1368

Objective: This study was designed to determine whether living in a neighborhood in which poverty levels increase across adolescence is associated with heightened levels of allostatic load (AL), a biological composite reflecting cardiometabolic risk. The researchers also sought to determine whether receipt of emotional support could ameliorate the effects of increases in neighborhood poverty on AL.

Methods: Neighborhood concentrations of poverty were obtained from the Census Bureau for 420 African American youth living in rural Georgia when they were 11 and 19 years of age. AL was measured at age 19 by using established protocols for children and adolescents. When youth were 18, caregivers reported parental emotional support and youth assessed receipt of peer and mentor emotional support. Covariates included family poverty status at ages 11 and 19, family financial stress, parental employment status, youth stress, and youths' unhealthful behaviors.

Results: Youth who lived in neighborhoods in which poverty levels increased from ages 11 to 19 evinced the highest levels of AL even after accounting for the individual-level covariates. The association of increasing neighborhood poverty across adolescence with AL was not significant for youth who received high emotional support.

Conclusions: This study is the first to show an association between AL and residence in a neighborhood that increases in poverty. It also highlights the benefits of supportive relationships in ameliorating this association.

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The Economic Impact of Hurricane Katrina on its Victims: Evidence from Individual Tax Returns

Tatyana Deryugina, Laura Kawano & Steven Levitt, NBER Working Paper, November 2014

Abstract:
Hurricane Katrina destroyed more than 200,000 homes and led to massive economic and physical dislocation. Using a panel of tax return data, we provide one of the first comprehensive analyses of the hurricane's long-term economic impact on its victims. Katrina had large and persistent impacts on where people live; small and mostly transitory impacts on wage income, employment, total income, and marriage; and no impact on divorce or fertility. Within just a few years, Katrina victims' incomes fully recover and even surpass that of controls from similar cities that were unaffected by the storm. The strong economic performance of Katrina victims is particularly remarkable given that the hurricane struck with essentially no warning. Our results suggest that, at least in this particular disaster, aid to cover destroyed assets and short-run income declines was sufficient to make victims financially whole. Our results provide some optimism regarding the costs of climate-change driven dislocation, especially when adverse events can be anticipated well in advance.

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Expenditure Response to Increases in In-Kind Transfers: Evidence from the Supplemental Nutrition Assistance Program

Timothy Beatty & Charlotte Tuttle, American Journal of Agricultural Economics, forthcoming

Abstract:
Economic theory predicts that households who receive less in Supplemental Nutrition Assistance Program benefits than they spend on food will treat SNAP benefits as if they were cash. However, empirical tests of these predictions draw different conclusions. In this study, we reexamine this question using recent increases in Supplemental Nutrition Assistance Program benefits, the largest of which was due to the American Recovery and Reinvestment Act of 2009. We find that increases in benefits cause households to increase their food budget share by more than would be predicted by theory. Results are robust to a host of specification tests.

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Financial strain, inflammatory factors, and haemoglobin A1c levels in African American women

Carolyn Cutrona et al., British Journal of Health Psychology, forthcoming

Objective: Type 2 diabetes disproportionately affects African American women, a population exposed to high levels of stress, including financial strain (Centers for Disease Control & Prevention, 2011, http://www.cdc.gov/diabetes/pubs/pdf/ndfs_2011.pdf). We tested a mediational model in which chronic financial strain among African American women contributes to elevated serum inflammation markers, which, in turn, lead to increased haemoglobin A1C (HbA1c) levels and risk for type 2 diabetes.

Methods: We assessed level of financial strain four times over a 10-year period and tested its effect on two serum inflammation markers, C-reactive protein (CRP) and soluble interleukin-6 receptor (sIL-6R) in year 11 of the study. We tested the inflammation markers as mediators in the association between chronic financial strain and HbA1c, an index of average blood glucose level over several months.

Design: Data were from 312 non-diabetic African American women from the Family and Community Health Study (FACHS; Cutrona et al., 2000, J. Pers. Soc. Psychol., 79, 1088).

Results: Chronic financial strain predicted circulating sIL-6R after controlling for age, BMI, health behaviours, and physical health measures. In turn, sIL-6R significantly predicted HbA1c levels. The path between chronic financial strain and HbA1c was significantly mediated by sIL-6R. Contrary to prediction, CRP was not predicted by chronic financial strain.

Conclusions: Results support the role of inflammatory factors in mediating the effects of psychosocial stressors on risk for type 2 diabetes. Findings have implications for interventions that boost economic security and foster effective coping as well as medical interventions that reduce serum inflammation to prevent the onset of type 2 diabetes.

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Role of health in predicting moves to poor neighborhoods among Hurricane Katrina survivors

Mariana Arcaya et al., Proceedings of the National Academy of Sciences, 18 November 2014, Pages 16246-16253

Abstract:
In contrast to a large literature investigating neighborhood effects on health, few studies have examined health as a determinant of neighborhood attainment. However, the sorting of individuals into neighborhoods by health status is a substantively important process for multiple policy sectors. We use prospectively collected data on 569 poor, predominantly African American Hurricane Katrina survivors to examine the extent to which health problems predicted subsequent neighborhood poverty. Our outcome of interest was participants' 2009-2010 census tract poverty rate. Participants were coded as having a health problem at baseline (2003-2004) if they self-reported a diagnosis of asthma, high blood pressure, diabetes, high cholesterol, heart problems, or any other physical health problems not listed, or complained of back pain, migraines, or digestive problems at baseline. Although health problems were not associated with neighborhood poverty at baseline, those with baseline health problems ended up living in higher poverty areas by 2009-2010. Differences persisted after adjustment for personal characteristics, baseline neighborhood poverty, hurricane exposure, and residence in the New Orleans metropolitan area, with baseline health problems predicting a 3.4 percentage point higher neighborhood poverty rate (95% confidence interval: 1.41, 5.47). Results suggest that better health was protective against later neighborhood deprivation in a highly mobile, socially vulnerable population. Researchers should consider reciprocal associations between health and neighborhoods when estimating and interpreting neighborhood effects on health. Understanding whether and how poor health impedes poverty deconcentration efforts may help inform programs and policies designed to help low-income families move to - and stay in - higher opportunity neighborhoods.

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The Home and the 'Hood: Associations Between Housing and Neighborhood Contexts and Adolescent Functioning

Margaret Elliott et al., Journal of Research on Adolescence, forthcoming

Abstract:
Adolescents from low-income families face various opportunities and constraints as they develop, with possible ramifications for their well-being. Two contexts of particular importance are the home and the neighborhood. Using adolescent data from the first two waves of the Three-City Study (N = 1,169), this study explored associations among housing problems and neighborhood disorder with adolescents' socioemotional problems, and how these associations varied by parental monitoring and gender. Results of hierarchical linear models suggest that poor-quality housing was most predictive of the functioning of girls and of adolescents with restrictive curfews, whereas neighborhood disorder was a stronger predictor for boys. Implications for future research on associations between housing and neighborhood contexts and adolescent development are discussed.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, December 23, 2014

To your health

"The Centers for Disease Control and Prevention estimated last year that two million people are sickened by resistant bacteria every year in the United States and 23,000 die as a result. But efforts to crack down on inappropriate antibiotic use in the United States and much of Europe have been successful, with prescriptions dropping from 2000 to 2010. That drop was more than offset, however, by growing use in the developing world. Global sales of antibiotics for human consumption rose 36 percent from 2000 to 2010, with Brazil, Russia, India, China and South Africa accounting for 76 percent of that increase." [NYT]

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The impact of early occupational choice on health behaviors

Inas Kelly et al., Review of Economics of the Household, December 2014, Pages 737-770

Abstract:
Occupational choice is a significant input into workers’ health investments, operating in a manner that can be either health-promoting or health-depreciating. Recent studies have highlighted the potential importance of initial occupational choice on subsequent outcomes pertaining to morbidity. This study is the first to assess the existence and strength of a causal relationship between initial occupational choice at labor entry and subsequent health behaviors and habits. We utilize the Panel Study of Income Dynamics to analyze the effect of first occupation, as identified by industry category and blue collar work, on subsequent health outcomes relating to obesity, alcohol misuse, smoking, and physical activity in 2005. Our findings suggest blue collar work early in life is associated with increased probabilities of obesity, at-risk alcohol consumption, and smoking, and increased physical activity later in life, although effects may be masked by unobserved heterogeneity. The weight of the evidence bearing from various methodologies, which account for non-random unobserved selection, indicates that at least part of this effect is consistent with a causal interpretation. These estimates also underscore the potential durable impact of early labor market experiences on later health.

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Does Women's Education Affect Breast Cancer Risk and Survival? Evidence from a Population Based Social Experiment in Education

Mårten Palme & Emilia Simeonova, Journal of Health Economics, forthcoming

Abstract:
Breast cancer is a notable exception to the well documented positive education gradient in health. A number of studies have found that highly educated women are more likely to be diagnosed with the disease. Breast cancer is therefore often labeled as a “welfare disease”. However, it has not been established whether the strong positive correlation holds up when education is exogenously determined. We estimate the causal effect of education on the probability of being diagnosed with breast cancer by exploiting an education reform that extended compulsory schooling and was implemented as a social experiment. We find that the incidence of breast cancer increased for those exposed to the reform.

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Why Lifespans Are More Variable Among Blacks Than Among Whites in the United States

Glenn Firebaugh et al., Demography, December 2014, Pages 2025-2045

Abstract:
Lifespans are both shorter and more variable for blacks than for whites in the United States. Because their lifespans are more variable, there is greater inequality in length of life — and thus greater uncertainty about the future — among blacks. This study is the first to decompose the black-white difference in lifespan variability in America. Are lifespans more variable for blacks because they are more likely to die of causes that disproportionately strike the young and middle-aged, or because age at death varies more for blacks than for whites among those who succumb to the same cause? We find that it is primarily the latter. For almost all causes of death, age at death is more variable for blacks than it is for whites, especially among women. Although some youthful causes of death, such as homicide and HIV/AIDS, contribute to the black-white disparity in variance, those contributions are largely offset by the higher rates of suicide and drug poisoning deaths for whites. As a result, differences in the causes of death for blacks and whites account, on net, for only about one-eighth of the difference in lifespan variance.

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Socioeconomic Status, Race, and Mortality: A Prospective Cohort Study

Lisa Signorello et al., American Journal of Public Health, December 2014, Pages e98-e107

Objectives: We evaluated the independent and joint effects of race, individual socioeconomic status (SES), and neighborhood SES on mortality risk.

Methods: We conducted a prospective analysis involving 52 965 non-Hispanic Black and 23 592 non-Hispanic White adults taking part in the Southern Community Cohort Study. Cox proportional hazards modeling was used to determine associations of race and SES with all-cause and cause-specific mortality.

Results: In our cohort, wherein Blacks and Whites had similar individual SES, Blacks were less likely than Whites to die during the follow-up period (hazard ratio [HR] = 0.78; 95% confidence interval [CI] = 0.73, 0.84). Low household income was a strong predictor of all-cause mortality among both Blacks and Whites (HR = 1.76; 95% CI = 1.45, 2.12). Being in the lowest (vs highest) category with respect to both individual and neighborhood SES was associated with a nearly 3-fold increase in all-cause mortality risk (HR = 2.76; 95% CI = 1.99, 3.84). There was no significant mortality-related interaction between individual SES and neighborhood SES among either Blacks or Whites.

Conclusions: SES is a strong predictor of premature mortality, and the independent associations of individual SES and neighborhood SES with mortality risk are similar for Blacks and Whites.

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Global rise in human infectious disease outbreaks

Katherine Smith et al., Journal of the Royal Society: Interface, December 2014

Abstract:
To characterize the change in frequency of infectious disease outbreaks over time worldwide, we encoded and analysed a novel 33-year dataset (1980–2013) of 12 102 outbreaks of 215 human infectious diseases, comprising more than 44 million cases occuring in 219 nations. We merged these records with ecological characteristics of the causal pathogens to examine global temporal trends in the total number of outbreaks, disease richness (number of unique diseases), disease diversity (richness and outbreak evenness) and per capita cases. Bacteria, viruses, zoonotic diseases (originating in animals) and those caused by pathogens transmitted by vector hosts were responsible for the majority of outbreaks in our dataset. After controlling for disease surveillance, communications, geography and host availability, we find the total number and diversity of outbreaks, and richness of causal diseases increased significantly since 1980 (p < 0.0001). When we incorporate Internet usage into the model to control for biased reporting of outbreaks (starting 1990), the overall number of outbreaks and disease richness still increase significantly with time (p < 0.0001), but per capita cases decrease significantly (p = 0.005). Temporal trends in outbreaks differ based on the causal pathogen's taxonomy, host requirements and transmission mode. We discuss our preliminary findings in the context of global disease emergence and surveillance.

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Does correcting myths about the flu vaccine work? An experimental evaluation of the effects of corrective information

Brendan Nyhan & Jason Reifler, Vaccine, 9 January 2015, Pages 459–464

Abstract:
Seasonal influenza is responsible for thousands of deaths and billions of dollars of medical costs per year in the United States, but influenza vaccination coverage remains substantially below public health targets. One possible obstacle to greater immunization rates is the false belief that it is possible to contract the flu from the flu vaccine. A nationally representative survey experiment was conducted to assess the extent of this flu vaccine misperception. We find that a substantial portion of the public (43%) believes that the flu vaccine can give you the flu. We also evaluate how an intervention designed to address this concern affects belief in the myth, concerns about flu vaccine safety, and future intent to vaccinate. Corrective information adapted from the Centers for Disease Control and Prevention (CDC) website significantly reduced belief in the myth that the flu vaccine can give you the flu as well as concerns about its safety. However, the correction also significantly reduced intent to vaccinate among respondents with high levels of concern about vaccine side effects – a response that was not observed among those with low levels of concern. This result, which is consistent with previous research on misperceptions about the MMR vaccine, suggests that correcting myths about vaccines may not be an effective approach to promoting immunization.

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Rapid Reduction in Breast Cancer Mortality with Inorganic Arsenic in Drinking Water

Allan Smith et al., EBioMedicine, November 2014, Pages 58–63

Background: Arsenic trioxide is effective in treating promyelocytic leukemia, and laboratory studies demonstrate that arsenic trioxide causes apoptosis of human breast cancer cells. Region II in northern Chile experienced very high concentrations of inorganic arsenic in drinking water, especially in the main city Antofagasta from 1958 until an arsenic removal plant was installed in 1970.

Methods: We investigated breast cancer mortality from 1950 to 2010 among women in Region II compared to Region V, which had low arsenic water concentrations. We conducted studies on human breast cancer cell lines and compared arsenic exposure in Antofagasta with concentrations inducing apoptosis in laboratory studies.

Findings: Before 1958, breast cancer mortality rates were similar, but in 1958-1970 the rates in Region II were half those in Region V (rate ratio RR = 0 • 51, 95% CI 0 • 40-0 • 66; p < 0 • 0001). Women under the age of 60 experienced a 70% reduction in breast cancer mortality during 1965-1970 (RR = 0 • 30, 0 • 17-0 • 54; p < 0 • 0001). Breast cancer cell culture studies showed apoptosis at arsenic concentrations close to those estimated to have occurred in people in Region II.

Interpretation: We found biologically plausible major reductions in breast cancer mortality during high exposure to inorganic arsenic in drinking water which could not be attributed to bias or confounding. We recommend clinical trial assessment of inorganic arsenic in the treatment of advanced breast cancer.

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The Contribution of Behavior Change and Public Health to Improved U.S. Population Health

Susan Stewart & David Cutler, NBER Working Paper, October 2014

Abstract:
Adverse behavioral risk factors contribute to a large share of deaths. We examine the effects on life expectancy (LE) and quality-adjusted life expectancy (QALE) of changes in six major behavioral risk factors over the 1960-2010 period: smoking, obesity, heavy alcohol use, and unsafe use of motor vehicles, firearms, and poisonous substances. These risk factors have moved in opposite directions. Reduced smoking, safer driving and cars, and reduced heavy alcohol use have led to health improvements, which we estimate at 1.82 years of quality-adjusted life. However, these were roughly offset by increased obesity, greater firearm deaths, and increased deaths from poisonous substances, which together reduced quality-adjusted life expectancy by 1.77 years. We model the hypothetical effects of a 50% decline in morbid obesity and in poisoning deaths, and a 10% decline in firearm fatalities, roughly matching favorable trends in smoking and increased seat belt use. These changes would lead to a 0.92 year improvement in LE and a 1.09 year improvement in QALE. Thus, substantial improvements in health by way of behavioral improvements and public health are possible.

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Race and health profiles in the United States: An examination of the social gradient through the 2009 CHIS adult survey

A.B. Nguyen, R. Moser & W.-Y. Chou, Public Health, December 2014, Pages 1076–1086

Objective: To examine the role of the social gradient on multiple health outcomes and behaviors. It was predicted that higher levels of SES, measured by educational attainment and family income, would be associated with positive health behaviors (i.e., smoking, drinking, physical activity, and diet) and health status (i.e., limited physical activity due to chronic condition, blood pressure, obesity, diabetes, BMI, and perceived health condition). The study also examined the differential effects of the social gradient in health among different racial/ethnic groups (i.e., non-Hispanic Whites, Blacks, Asian, Hispanics, and American Indians).

Methods: The data were from the adult 2009 California Health Interview Survey (CHIS). Weighted multivariable linear and logistic regression models were conducted to examine trends found between SES and health conditions and health behaviors. Polynomial trends were examined for all linear and logistic models to test for the possible effects (linear, quadratic, and cubic) of the social gradient on health behaviors and outcomes stratified by race/ethnicity.

Results: Findings indicated that, in general, Whites had more favorable health profiles in comparison to other racial/ethnic groups with the exception of Asians who were likely to be as healthy as or healthier than Whites. Predicted marginals indicated that Asians in the upper two strata of social class display the healthiest outcomes of health status among all other racial/ethnic groups. Also, the social gradient was differentially associated with health outcomes across race/ethnicity groups. While the social gradient was most consistently observed for Whites, education did not have the same protective effect on health among Blacks and American Indians. Also, compared to other minority groups, Hispanics and Asians were more likely to display curvilinear trends of the social gradient: an initial increase from low SES to mid-level SES was associated with worse health outcomes and behaviors; however, continued increase from mid-SES to high SES saw returns to healthy outcomes and behaviors.

Conclusion: The study contributes to the literature by illustrating unique patterns and trends of the social gradient across various racial/ethnic populations in a nationally representative sample. Future studies should further explore temporal trends to track the impact of the social gradient for different racial and ethnic populations in tandem with indices of national income inequalities.

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Work-Family Context and the Longevity Disadvantage of US Women

Jennifer Montez et al., Social Forces, forthcoming

Abstract:
Female life expectancy is currently shorter in the United States than in most high-income countries. This study examines work-family context as a potential explanation. While work-family context changed similarly across high-income countries during the past half century, the United States has not implemented institutional supports, such as universally available childcare and family leave, to help Americans contend with these changes. We compare the United States to Finland — a country with similar trends in work-family life but generous institutional supports — and test two hypotheses to explain US women's longevity disadvantage: (1) US women may be less likely than Finnish women to combine employment with childrearing; and (2) US women's longevity may benefit less than Finnish women's longevity from combining employment with childrearing. We used data from women aged 30–60 years during 1988–2006 in the US National Health Interview Survey Linked Mortality File and harmonized it with data from Finnish national registers. We found stronger support for hypothesis 1, especially among low-educated women. Contrary to hypothesis 2, combining employment and childrearing was not less beneficial for US women's longevity. In a simulation exercise, more than 75 percent of US women's longevity disadvantage was eliminated by raising their employment levels to Finnish levels and reducing mortality rates of non-married/non-employed US women to Finnish rates.

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Could the human papillomavirus vaccines drive virulence evolution?

Carmen Lía Murall, Chris Bauch & Troy Day, Proceedings of the Royal Society: Biological Sciences, 7 January 2015

Abstract:
The human papillomavirus (HPV) vaccines hold great promise for preventing several cancers caused by HPV infections. Yet little attention has been given to whether HPV could respond evolutionarily to the new selection pressures imposed on it by the novel immunity response created by the vaccine. Here, we present and theoretically validate a mechanism by which the vaccine alters the transmission–recovery trade-off that constrains HPV's virulence such that higher oncogene expression is favoured. With a high oncogene expression strategy, the virus is able to increase its viral load and infected cell population before clearance by the vaccine, thus improving its chances of transmission. This new rapid cell-proliferation strategy is able to circulate between hosts with medium to high turnover rates of sexual partners. We also discuss the importance of better quantifying the duration of challenge infections and the degree to which a vaccinated host can shed virus. The generality of the models presented here suggests a wider applicability of this mechanism, and thus highlights the need to investigate viral oncogenicity from an evolutionary perspective.

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Using Pay-For-Success To Increase Investment In The Nonmedical Determinants Of Health

Ian Galloway, Health Affairs, November 2014, Pages 1897-1904

Abstract:
The combination of fee-for-service payments and the US health care system’s standing commitment to treating existing illness discourages spending on the behavioral, social, and environmental (that is, the nonmedical) conditions that contribute most to long-term health. Pay-for-success, alternatively known as social impact bonds, or SIBs, offers a possible solution. The pay-for-success model relies on an investor that is willing to fund a nonmedical intervention up front while bearing the risk that the intervention may fail to prevent disease in the future. Should the intervention succeed, however, the investor is repaid in full by a predetermined payer (such as a public health agency) and receives an additional return on its investment as a reward for taking on the risk. Pay-for-success pilots are being developed to reduce asthma-related emergencies among children, poor birth outcomes, and the progression of prediabetes to diabetes, among other applications. These efforts, supported by key policy reforms such as public agency data sharing and coordinated care, promise to increase the number of evidence-based nonmedical service providers and seed a new market that values health, not just health care.

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Explaining the Increase in the Prevalence of Autism Spectrum Disorders: The Proportion Attributable to Changes in Reporting Practices

Stefan Hansen, Diana Schendel & Erik Parner, JAMA Pediatrics, forthcoming

Objective: To quantify the effect of changes in reporting practices in Denmark on reported ASD prevalence.

Design, Setting, and Participants: We used a population-based birth cohort approach that includes information on all individuals with permanent residence in Denmark. We assessed all children born alive from January 1, 1980, through December 31, 1991, in Denmark (n = 677 915). The children were followed up from birth until ASD diagnosis, death, emigration, or the end of follow-up on December 31, 2011, whichever occurred first. The analysis uses a stratified Cox proportional hazards regression model with the changes in reporting practices modeled as time-dependent covariates.

Results: For Danish children born during the study period, 33% (95% CI, 0%-70%) of the increase in reported ASD prevalence could be explained by the change in diagnostic criteria alone; 42% (95% CI, 14%-69%), by the inclusion of outpatient contacts alone; and 60% (95% CI, 33%-87%), by the change in diagnostic criteria and the inclusion of outpatient contacts.

Conclusions and Relevance: Changes in reporting practices can account for most (60%) of the increase in the observed prevalence of ASDs in children born from 1980 through 1991 in Denmark. Hence, the study supports the argument that the apparent increase in ASDs in recent years is in large part attributable to changes in reporting practices.

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Reactive vaccination in the presence of disease hotspots

Andrew Azman & Justin Lessler, Proceedings of the Royal Society: Biological Sciences, 7 January 2015

Abstract:
Reactive vaccination has recently been adopted as an outbreak response tool for cholera and other infectious diseases. Owing to the global shortage of oral cholera vaccine, health officials must quickly decide who and where to distribute limited vaccine. Targeted vaccination in transmission hotspots (i.e. areas with high transmission efficiency) may be a potential approach to efficiently allocate vaccine, however its effectiveness will likely be context-dependent. We compared strategies for allocating vaccine across multiple areas with heterogeneous transmission efficiency. We constructed metapopulation models of a cholera-like disease and compared simulated epidemics where: vaccine is targeted at areas of high or low transmission efficiency, where vaccine is distributed across the population, and where no vaccine is used. We find that connectivity between populations, transmission efficiency, vaccination timing and the amount of vaccine available all shape the performance of different allocation strategies. In highly connected settings (e.g. cities) when vaccinating early in the epidemic, targeting limited vaccine at transmission hotspots is often optimal. Once vaccination is delayed, targeting the hotspot is rarely optimal, and strategies that either spread vaccine between areas or those targeted at non-hotspots will avert more cases. Although hotspots may be an intuitive outbreak control target, we show that, in many situations, the hotspot-epidemic proceeds so fast that hotspot-targeted reactive vaccination will prevent relatively few cases, and vaccination shared across areas where transmission can be sustained is often best.

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The relationship between gasoline price and patterns of motorcycle fatalities and injuries

He Zhu, Fernando Wilson & Jim Stimpson, Injury Prevention, forthcoming

Objective: Economic factors such as rising gasoline prices may contribute to the crash trends by shaping individuals’ choices of transportation modalities. This study examines the relationship of gasoline prices with fatal and non-fatal motorcycle injuries.

Methods: Data on fatal and non-fatal motorcycle injuries come from California's Statewide Integrated Traffic Records System for 2002–2011. Autoregressive integrated moving average (ARIMA) regressions were used to estimate the impact of inflation-adjusted gasoline price per gallon on trends of motorcycle injuries.

Results: Motorcycle fatalities and severe and minor injuries in California were highly correlated with increasing gasoline prices from 2002 to 2011 (r=0.76, 0.88 and 0.85, respectively). In 2008, the number of fatalities and injuries reached 13 457—a 34% increase since 2002, a time period in which inflation-adjusted gasoline prices increased about $0.30 per gallon every year. The majority of motorcycle riders involved in crashes were male (92.5%), middle-aged (46.2%) and non-Hispanic white (67.9%). Using ARIMA modelling, we estimated that rising gasoline prices resulted in an additional 800 fatalities and 10 290 injuries from 2002 to 2011 in California.

Conclusions: Our findings suggest that increasing gasoline prices led to more motorcycle riders on the roads and, consequently, more injuries. Aside from mandatory helmet laws and their enforcement, other strategies may include raising risk awareness of motorcyclists and investment in public transportation as an alternative transportation modality to motorcycling. In addition, universally mandated training courses and strict licensing tests of riding skills should be emphasised to help reduce the motorcycle fatal and non-fatal injuries.

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Prevalence and Costs of Skin Cancer Treatment in the U.S., 2002−2006 and 2007−2011

Gery Guy et al., American Journal of Preventive Medicine, forthcoming

Purpose: To examine trends in the treated prevalence and treatment costs of nonmelanoma and melanoma skin cancers.

Methods: This study used data on adults from the 2002−2011 Medical Expenditure Panel Survey full-year consolidated files and information from corresponding medical conditions and medical event files to estimate the treated prevalence and treatment cost of nonmelanoma skin cancer, melanoma skin cancer, and all other cancer sites. Analyses were conducted in January 2014.

Results: The average annual number of adults treated for skin cancer increased from 3.4 million in 2002−2006 to 4.9 million in 2007−2011 (p<0.001). During this period, the average annual total cost for skin cancer increased from $3.6 billion to $8.1 billion (p=0.001), representing an increase of 126.2%, while the average annual total cost for all other cancers increased by 25.1%. During 2007−2011, nearly 5 million adults were treated for skin cancer annually, with average treatment costs of $8.1 billion each year.

Conclusions: These findings demonstrate that the health and economic burden of skin cancer treatment is substantial and increasing. Such findings highlight the importance of skin cancer prevention efforts, which may result in future savings to the healthcare system.

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The Very High Premature Mortality Rate among Active Professional Wrestlers Is Primarily Due to Cardiovascular Disease

Christopher Herman et al., PLoS ONE, November 2014

Purpose: Recently, much media attention has been given to the premature deaths in professional wrestlers. Since no formal studies exist that have statistically examined the probability of premature mortality in professional wrestlers, we determined survival estimates for active wresters over the past quarter century to establish the factors contributing to the premature mortality of these individuals.

Methods: Data including cause of death was obtained from public records and wrestling publications in wrestlers who were active between January 1, 1985 and December 31, 2011. 557 males were considered consistently active wrestlers during this time period. 2007 published mortality rates from the Center for Disease Control were used to compare the general population to the wrestlers by age, BMI, time period, and cause of death. Survival estimates and Cox hazard regression models were fit to determine incident premature deaths and factors associated with lower survival. Cumulative incidence function (CIF) estimates given years wrestled was obtained using a competing risks model for cause of death.

Results: The mortality for all wrestlers over the 26-year study period was.007 deaths/total person-years or 708 per 100,000 per year, and 16% of deaths occurred below age 50 years. Among wrestlers, the leading cause of deaths based on CIF was cardiovascular-related (38%). For cardiovascular-related deaths, drug overdose-related deaths and cancer deaths, wrestler mortality rates were respectively 15.1, 122.7 and 6.4 times greater than those of males in the general population. Survival estimates from hazard models indicated that BMI is significantly associated with the hazard of death from total time wrestling (p<0.0001).

Conclusion: Professional wrestlers are more likely to die prematurely from cardiovascular disease compared to the general population and morbidly obese wrestlers are especially at risk. Results from this study may be useful for professional wrestlers, as well as wellness policy and medical care implementation.

By KEVIN LEWIS | 09:00:00 AM

Monday, December 22, 2014

Rules of the game

"It’s ironic that many blast Washington politicians by saying they’re 'anti-business.' Many are very pro-business — but anti-competition." [Arthur Brooks]

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https://www.aei.org/publication/zenefits-utah-classic-case-regulatory-capture-protecting-incumbent-producers-expense-public-interest

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"[There are] numerous financial ties the FDA hasn’t disclosed between medical-device makers and the doctors and other experts who review devices for it, a Wall Street Journal analysis of corporate, state and federal data shows. In panels evaluating devices involved in cardiology, orthopedics and gynecology from 2012 through 2014, a third of 122 members had received compensation — such as money, research grants or travel and food — from medical-device companies, an examination of databases shows. Nearly 10% of the FDA advisers received something of value from the specific company whose product they were evaluating. The FDA disclosed roughly 1% of these corporate connections." [WSJ]

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A Long Constitution is a (Positively) Bad Constitution: Evidence from OECD Countries

George Tsebelis & Dominic Nardi, British Journal of Political Science, forthcoming

Abstract:
This article starts with two empirical observations from Organisation for Economic Co-operation and Development countries about longer constitutions: (1) they are more rigid (that is, more difficult to amend) and (2) they are in practice more frequently amended. The study presents models of the frequently adopted rules for constitutional revision (for example, qualified majorities in one or two chambers, referendums) and demonstrates that, if longer constitutions are more frequently revised, it is because they must impose actual harm on overwhelming majorities. In trying to explain this finding, the article demonstrates that longer constitutions tend to contain more substantive restrictions. Countries with longer constitutions also tend to have lower levels of GDP per capita and higher corruption. Finally, the negative effect of constitutional length on GDP per capita is shown to persist even if corruption is controlled for.

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To Hive or to Hold? Producing Professional Authority through Scut Work

Ruthanne Huising, Administrative Science Quarterly, forthcoming

Abstract:
This paper examines how professionals working in bureaucratic organizations, despite having formal authority, struggle to enact authority over the clients they advise, transforming their right to command into deference to commands. Drawing on a comparative ethnographic study of two professional groups overseeing compliance in university laboratories, I identify how choices about their task jurisdiction influence each profession’s ability to enact authority over and gain voluntary compliance from the same group of clients. One group constructs its work domain to include not only high-skilled tasks that emphasize members’ expertise but also scut work — menial work with contaminated materials — through which they gain regular entry into clients’ workspaces, developing knowledge about and relationships with clients. Using these resources to accommodate, discipline, and understand clients, they produce relational authority — the capacity to elicit voluntary compliance with commands. The other group outsources everyday scut work and interacts with lab researchers mostly during annual inspections and training, which leads to complaints by researchers to management and eventual loss of jurisdiction. The findings show the importance of producing relational authority in contemporary professional–client interactions in bureaucratic settings and challenge the relevance of expertise and professional identity in generating relational authority. I show how holding on to, not hiving off, scut work allows professionals to enact authority over clients.

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Inspection technology, detection, and compliance: Evidence from Florida restaurant inspections

Ginger Zhe Jin & Jungmin Lee, RAND Journal of Economics, Winter 2014, Pages 885–917

Abstract:
In this article, we show that a small innovation in inspection technology can make substantial differences in inspection outcomes. For restaurant hygiene inspections, the state of Florida has introduced a handheld electronic device, the portable digital assistant (PDA), which reminds inspectors of about 1,000 potential violations that may be checked for. Using inspection records from July 2003 to June 2009, we find that the adoption of PDA led to 11% more detected violations and subsequently, restaurants may have gradually increased their compliance efforts. We also find that PDA use is significantly correlated with a reduction in restaurant-related foodborne disease outbreaks.

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A Tale of Repetition: Lessons from Florida Restaurant Inspections

Ginger Zhe Jin & Jungmin Lee, NBER Working Paper, October 2014

Abstract:
We examine the role of repetition in government regulation. Using Florida restaurant inspection data from 2003 to 2010, we find that inspectors new to the inspected restaurant report 12.7-17.5% more violations than the second visit of a repeat inspector. This effect is even more pronounced if the previous inspector had inspected the restaurant more times. The difference between new and repeat inspectors is driven partly by inspector heterogeneity in inherent taste and stringency, and partly by new inspectors having fresher eyes in the first visit of a restaurant. These findings highlight the importance of inspector assignment in regulatory outcomes.

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Libertarian Paternalism, Path Dependence, and Temporary Law

Tom Ginsburg, Jonathan Masur & Richard McAdams, University of Chicago Law Review, Winter 2014, Pages 291-359

"The recent wave of behavioral economics has led some theorists to advocate the possibility of 'libertarian paternalism,' in which regulators designing institutions permit significant individual choice but nonetheless use default rules to 'nudge' cognitively biased individuals toward particular salutary choices. In this Article, we add the possibility of a different kind of nudge: temporary law. The case for temporary law arises from a particular regulatory rationale. In some cases, the best normative defense of regulation against the libertarian critique — the best response to the claim that free market competition produces efficiency — is path dependence, the idea that market institutions can become trapped or locked in to a suboptimal equilibrium, even when some better equilibrium exists."

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Valuable Lies

Ariel Porat & Omri Yadlin, University of Chicago Working Paper, October 2014

Abstract:
Should a Muslim employee who falsely stated in his job interview that he is Christian in order to avoid discrimination be fired for his dishonesty? Should a buyer of a tract of land who conducted an expensive investigation before contracting that revealed a high likelihood of mineral deposits be subject to liability for fraud because he told the seller he knew nothing about the land's mineral potential before purchase? Is a doctor violating her legal duties toward her patient if she convinces him to get vaccinated on the pretext that it is in his best interest when it is instead in the public interest? In all of these cases, and many others, parties are allowed not to disclose material information to an interested party but not to lie about the same information. This article makes the argument that in many contexts, where non-disclosure is permitted lies should also be tolerated, for otherwise the social goals sought by allowing non-disclosure are frustrated. With this as its starting point, the article develops a theory of valuable lies, discussing the conditions under which lies should be permitted. It analyzes the main impediments to allowing lies, the most important of which being the risk that permitting lies would impair truth-tellers' ability to reliably convey truthful information. The article applies the theory to various fields, including contract law, tort law, medical malpractice, criminal law and procedure, and constitutional law. It concludes by proposing changes to the law that will allow telling valuable lies in well-defined categories of cases.

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Do regulators overestimate the costs of regulation?

David Simpson, Journal of Benefit-Cost Analysis, November 2014, Pages 315–332

Abstract:
It has occasionally been asserted that regulators typically overestimate the costs of the regulations they impose. A number of arguments have been proposed for why this might be the case. The most widely credited is that regulators fail sufficiently to appreciate the effects of innovation in reducing regulatory compliance costs. Most existing studies have found that regulators are more likely to over- than to underestimate costs. While it is difficult to develop summary statistics to aggregate the results of different studies of disparate industries, one such measure is the average of the ratio of ex ante estimates of compliance costs to ex post estimates of the same costs. This ratio is generally greater than one. In this paper I argue that neither the greater frequency of overestimates nor the fact that the average ratio of ex ante to ex post cost estimates is greater than one necessarily demonstrates that ex ante estimates are biased. There are several reasons to suppose that the distribution of compliance costs could be skewed, so that the median of the distribution would lie below the mean. It is not surprising, then, that most estimates would prove to be too high. Moreover, Jensen’s inequality implies that the expected ratio of ex ante to ex post compliance costs would be greater than one. I propose a regression-based test of the bias of ex ante compliance cost estimates, and cannot reject the hypothesis that estimates are unbiased. Failure to reject a hypothesis with limited and noisy data should not, of course, be interpreted as a strong argument to accept the hypothesis. Rather, this paper argues for the generation of more and better information. Despite the existence of a number of papers reporting ex ante and ex post compliance cost estimates, it is surprisingly difficult to get a large sample with which to make such comparisons.

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Won’t we scare them? The impact of communicating uncontrollable risks on the public’s perception

Melanie De Vocht et al., Journal of Risk Research, forthcoming

Abstract:
Authorities often refrain from communicating risks out of fear to arouse negative feelings amongst the public and to create negative reactions in terms of the public’s behavior. This study examines the impact of communicating risks on the public’s feelings and behavioral intentions regarding an uncontrollable risk related to fresh produce. In addition, the impact of risk communication is compared between a situation in which the risk either does or does not develop into a crisis, by means of a 2 (risk communication vs. no risk communication) × 2 (crisis communication vs. no crisis communication) between-subjects factorial design. The results show that communicating risks has a positive impact on the behavioral intention to keep on eating fresh produce compared to when no risk communication was provided, as it reduces negative feelings amongst the public. In addition, the findings illustrate that when a risk develops into an actual crisis, prior risk communication can result in greater trust in the government and reduce perceived government responsibility for the crisis when the crisis hits. Based on these findings, it can be suggested that risk communication is an effective tool for authorities in preparing the public for potential crises. The findings indicate that communicating risks does not raise negative reactions amongst the public, on the contrary, and that it results in more positive perceptions of the authorities.

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Very Long-Run Discount Rates

Stefano Giglio, Matteo Maggiori & Johannes Stroebel, Quarterly Journal of Economics, forthcoming

Abstract:
We estimate how households trade off immediate costs and uncertain future benefits that occur in the very long run, 100 or more years away. We exploit a unique feature of housing markets in the U.K. and Singapore, where residential property ownership takes the form of either leaseholds or freeholds. Leaseholds are temporary, pre-paid, and tradable ownership contracts with maturities between 99 and 999 years, while freeholds are perpetual ownership contracts. The price difference between leaseholds and freeholds reflects the present value of perpetual rental income starting at leasehold expiry, and is thus informative about very long-run discount rates. We estimate the price discounts for varying leasehold maturities compared to freeholds and extremely long-run leaseholds via hedonic regressions using proprietary datasets of the universe of transactions in each country. Households discount very long-run cash flows at low rates, assigning high present value to cash flows hundreds of years in the future. For example, 100-year leaseholds are valued at more than 10% less than otherwise identical freeholds, implying discount rates below 2.6% for 100-year claims.

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“Bluewashing” the Firm? Voluntary Regulations, Program Design, and Member Compliance with the United Nations Global Compact

Daniel Berliner & Aseem Prakash, Policy Studies Journal, forthcoming

Abstract:
Voluntary programs have emerged as important instruments of public policy. We explore whether programs lacking monitoring and enforcement mechanisms can curb participants’ shirking with program obligations. Incentive-based approaches to policy see monitoring and enforcement as essential to curb shirking, while norm-based approaches view social mechanisms such as norms and learning as sufficient to serve this purpose. The United Nations Global Compact (UNGC), a prominent international voluntary program, encourages firms to adopt socially responsible policies. Its program design, however, relies primarily on norms and learning to mitigate shirking. Using a panel of roughly 3,000 U.S. firms from 2000 to 2010, and multiple approaches to address endogeneity and selection issues, we examine the effects of Compact membership on members’ human rights and environmental performance. We find that members fare worse than nonmembers on costly and fundamental performance dimensions, while showing improvements only in more superficial dimensions. Exploiting the lack of monitoring and enforcement, UNGC members are able to shirk: enjoying goodwill benefits of program membership without making costly changes to their human rights and environmental practices.

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Analyzing the Effectiveness of State Regulatory Review

Russell Sobel & John Dove, Public Finance Review, forthcoming

Abstract:
This article provides a systematic empirical study of how differences in regulatory review processes across the fifty US states affect the level of regulation. We examine whether rules for regulatory review matter in terms of lowering the overall level of regulation in states. Our findings suggest that sunset provisions are the most effective means of reducing state regulatory levels. Requirements for reviewing the fiscal impacts of new regulations on state government budgets and to present lower-cost alternatives for achieving the same policy goals also appear to be somewhat effective. There is limited evidence that a regulatory review process within the state legislative branch or an independent agency reduces new regulations.

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Merger Review by the Federal Communications Commission: Comcast–NBC Universal

Christopher Yoo, Review of Industrial Organization, November 2014, Pages 295-321

Abstract:
The Communications Act of 1934 created a dual review process in which mergers in the communications industry are reviewed by the Federal Communications Commission (FCC) as well as the antitrust authorities. Commentators have criticized dual review not only as costly and redundant, but also as subject to substantive and procedural abuse. The process of clearing the 2011 Comcast–NBC Universal merger provides a useful case study to examine whether such concerns are justified. A review of the empirical context reveals that the FCC intervened even though the relevant markets were not structured in a way that would ordinarily raise anticompetitive concerns. In addition, the FCC was able to use differences between its review process and that used by the Justice Department to extract concessions from the merging parties that had nothing to do with the merger and which were more properly addressed through general rulemaking. Moreover, the use of voluntary commitments also allowed the FCC to avoid subjecting certain aspects of its decision to public comment and immunized it from having to offer a reasoned explanation or subjecting its decision to judicial review. The aftermath of the merger provides an opportunity to assess whether the FCC’s intervention yielded consumer benefits.

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Market Structure and Media Diversity

Scott Hiller, Scott Savage & Donald Waldman, Economic Inquiry, forthcoming

Abstract:
We estimate a mixed logit model of the demand for local news service. Results provide evidence that suggest the representative consumer values more diverse news, more coverage of multicultural issues, and more information on community news, and has a distaste for advertising. Demand estimates are used to calculate the impact on consumer welfare from a marginal decrease in the number of independent television stations that lowers the amount of diversity, multiculturalism, community news, and advertising. Consumer welfare decreases, but the losses are smaller in large markets. For example, small-market consumers lose $45 million annually while large-market consumers lose $13 million.

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Quantifying search and switching costs in the US auto insurance industry

Elisabeth Honka, RAND Journal of Economics, Winter 2014, Pages 847–884

Abstract:
I estimate demand for auto insurance in the presence of two types of market frictions: search and switching costs. I develop an integrated utility-maximizing model in which consumers decide over which and how many companies to search and from which company to purchase. My modelling approach rationalizes observed consideration sets as being the outcomes of consumers' search processes. I find search costs to range from $35 to $170 and average switching costs of $40. Search costs are the most important driver of customer retention and their elimination is the main lever to increase consumer welfare in the auto insurance industry.

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Nobody’s Innocent: The Role of Customers in the Doping Dilemma

Berno Buechel, Eike Emrich & Stefanie Pohlkamp, Journal of Sports Economics, forthcoming

Abstract:
Customers who boycott an organization after some scandal may actually exacerbate the fraud problem they would like to prevent. This conclusion is derived from a game-theoretic model that introduces a third player into the standard inspection game. Focusing on the example of doping in professional sports, we observe that doping is prevalent in equilibrium because customers undermine an organizer’s incentives to inspect the athletes. Establishing transparency about doping tests is necessary but not sufficient to overcome this dilemma. Our analysis has practical implications for the design of anti-doping policies as well as for other situations of fraudulent activities.

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Childcare quality and pricing: Evidence from Wisconsin

Benjamin Artz & David Welsch, Applied Economics, Fall 2014, Pages 4276-4289

Abstract:
Childcare prices vary dramatically both between and within states. We identify the effects of demographic and provider characteristics on childcare pricing, but focus primarily on whether unique government-provided information on childcare quality has an effect on pricing. Using provider-level observations across three adjacent counties in southern Wisconsin, we find that this government-provided information on childcare quality does not significantly affect pricing. Recognizing that information asymmetry may be the root cause of the insignificant relationship, we test the relationship further within multiple subsamples and with alternative models. Only the lowest quality childcare providers are significantly associated with lower prices in areas that we hypothesize suffer from greater information asymmetry.

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When the smoke clears: Expertise, learning and policy diffusion

Charles Shipan & Craig Volden, Journal of Public Policy, December 2014, Pages 357-387

Abstract:
In federal systems, governments have the opportunity to learn from the policy experiments – and the potential successes – of other governments. Whether they seize such opportunities, however, may depend on the expertise or past experiences of policymakers. Based on an analysis of state-level adoptions of antismoking restrictions targeted towards youths, we find that US states are more likely to emulate other states that have demonstrated the ability to successfully limit youth smoking. In addition, we find that political expertise (as captured by legislative professionalism) and policy expertise (as captured by previous youth access policy experiments at the local level) enhance the likelihood of emulating policy successes found in other states. As such, we establish that internal expertise and external learning are complements, rather than substitutes.

By KEVIN LEWIS | 09:00:00 AM

Sunday, December 21, 2014

Head strong

The Wages of Sinistrality: Handedness, Brain Structure, and Human Capital Accumulation

Joshua Goodman, Journal of Economic Perspectives, Fall 2014, Pages 193-212

Abstract:
Left- and right-handed individuals have different neurological wiring, particularly with regard to language processing. Multiple datasets from the United States and the United Kingdom show that lefties exhibit significant human capital deficits relative to righties. Lefties score 0.1 standard deviations lower on cognitive skill measures, have more behavioral problems, have more learning disabilities such as dyslexia, complete less schooling, and work in occupations requiring less cognitive skill. Most strikingly, lefties have 10-12 percent lower annual earnings than righties, much of which can be explained by observable differences in cognitive skills and behavioral problems. Lefties work in more manually intensive occupations than do righties, further suggesting their primary labor market disadvantage is cognitive rather than physical. I argue here that handedness can be used to explore the long-run impacts of differential brain structure generated in part by genetics and in part by poor infant health.

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No Relationship Between Intelligence and Facial Attractiveness in a Large, Genetically Informative Sample

Dorian Mitchem et al., Evolution and Human Behavior, forthcoming

Abstract:
Theories in both evolutionary and social psychology suggest that a positive correlation should exist between facial attractiveness and general intelligence, and several empirical observations appear to corroborate this expectation. Using highly reliable measures of facial attractiveness and IQ in a large sample of identical and fraternal twins and their siblings, we found no evidence for a phenotypic correlation between these traits. Likewise, neither the genetic nor the environmental latent factor correlations were statistically significant. We supplemented our analyses of new data with a simple meta-analysis that found evidence of publication bias among past studies of the relationship between facial attractiveness and intelligence. In view of these results, we suggest that previously published reports may have overestimated the strength of the relationship and that the theoretical bases for the predicted attractiveness-intelligence correlation may need to be reconsidered.

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Saving-Enhanced Memory: The Benefits of Saving on the Learning and Remembering of New Information

Benjamin Storm & Sean Stone, Psychological Science, forthcoming

Abstract:
With the continued integration of technology into people’s lives, saving digital information has become an everyday facet of human behavior. In the present research, we examined the consequences of saving certain information on the ability to learn and remember other information. Results from three experiments showed that saving one file before studying a new file significantly improved memory for the contents of the new file. Notably, this effect was not observed when the saving process was deemed unreliable or when the contents of the to-be-saved file were not substantial enough to interfere with memory for the new file. These results suggest that saving provides a means to strategically off-load memory onto the environment in order to reduce the extent to which currently unneeded to-be-remembered information interferes with the learning and remembering of other information.

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How fragile is our intellect? Estimating losses in general intelligence due to both selection and mutation accumulation

Michael Woodley, Personality and Individual Differences, March 2015, Pages 80–84

Abstract:
Two dysgenic models of declining general intelligence have been proposed. The first posits that since the Industrial Revolution those with low g have had a reproductive advantage over those with high g. The second posits that relaxed purifying selection against deleterious mutations in modern populations has led to g declining due to mutation accumulation. Here, a meta-analytic estimate of the decline due to selection is computed across nine US and UK studies, revealing a loss of .39 points per decade (combined N = 202,924). By combining findings from a high-precision study of the effects of paternal age on offspring g with a study of paternal age and offspring de novo mutation numbers, it is proposed that, 70 de novo mutations per familial generation should reduce offspring g by 2.94 points, or .84 points per decade. Combining the selection and mutation accumulation losses yields a potential overall dysgenic loss of 1.23 points per decade, with upper and lower bound values ranging from 1.92 to .53 points per decade. This estimate is close to those from studies employing the secular slowing of simple reaction time as a potential indicator of declining g, consistent with predictions that mutation accumulation may play a role in these findings.

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Selection and the Age-Productivity Profile. Evidence from Chess Players

Marco Bertoni, Giorgio Brunello & Lorenzo Rocco, Journal of Economic Behavior & Organization, February 2015, Pages 45–58

Abstract:
We use data on professional chess tournaments to study how endogenous selection affects the relationship between age and mental productivity in a brain-intensive profession. We show that less talented players are more likely to drop out, and that the age-productivity gradient is heterogeneous by ability, making fixed effects estimators inconsistent. Since we do not observe the players who dropped out of chess before the beginning of our sampling period, we cannot exploit the standard Heckman sample selection correction procedure. Therefore, we correct for selection by using an imputation method that repopulates the sample by applying to older cohorts the self-selection patterns observed in younger cohorts. We estimate the age-productivity profile on the repopulated sample using median regressions, and find that median productivity increases by close to 5 percent from initial age (15) to peak age (21.6), and declines substantially after the peak. At age 50, it is about 10 percent lower than at age 15. We compare profiles in the unadjusted and in the repopulated sample and show that failure to adequately address endogenous selection in the former leads to substantially over-estimating productivity at any age relative to initial age.

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Mapping the unconscious maintenance of a lost first language

Lara Pierce et al., Proceedings of the National Academy of Sciences, 2 December 2014, Pages 17314–17319

Abstract:
Optimal periods during early development facilitate the formation of perceptual representations, laying the framework for future learning. A crucial question is whether such early representations are maintained in the brain over time without continued input. Using functional MRI, we show that internationally adopted (IA) children from China, exposed exclusively to French since adoption (mean age of adoption, 12.8 mo), maintained neural representations of their birth language despite functionally losing that language and having no conscious recollection of it. Their neural patterns during a Chinese lexical tone discrimination task matched those observed in Chinese/French bilinguals who have had continual exposure to Chinese since birth and differed from monolingual French speakers who had never been exposed to Chinese. They processed lexical tone as linguistically relevant, despite having no Chinese exposure for 12.6 y, on average, and no conscious recollection of that language. More specifically, IA participants recruited left superior temporal gyrus/planum temporale, matching the pattern observed in Chinese/French bilinguals. In contrast, French speakers who had never been exposed to Chinese did not recruit this region and instead activated right superior temporal gyrus. We show that neural representations are not overwritten and suggest a special status for language input obtained during the first year of development.

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Using Participant Choice to Enhance Memory Performance

Ulrich Weger & Stephen Loughnan, Applied Cognitive Psychology, forthcoming

Abstract:
When patients are involved in deciding the course of treatment for their ailment and are given a chance to choose between different treatment options, the success of the intervention typically increases. In our study we transferred this approach to a cognitive psychology task and investigated whether treatment choice can enhance participants' memory performance. Participants who were free to choose one out of a selection of alleged cognitive enhancers showed better performance than those who were assigned an enhancer. We also found that performance-expectations have a stronger impact when triggered prior to the encoding as opposed to the retrieval stage and thus appear to be more effective at a point when participants exercise a greater degree of cognitive control. The findings are of relevance in contexts where it can be assumed that participants have knowledge about their own needs and can in turn capitalize on this knowledge when given the opportunity.

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Noninvasive stimulation of prefrontal cortex strengthens existing episodic memories and reduces forgetting in the elderly

Marco Sandrini et al., Frontiers in Aging Neuroscience, October 2014

Abstract:
Memory consolidation is a dynamic process. Reactivation of consolidated memories by a reminder triggers reconsolidation, a time-limited period during which existing memories can be modified (i.e., weakened or strengthened). Episodic memory refers to our ability to recall specific past events about what happened, including where and when. Difficulties in this form of long-term memory commonly occur in healthy aging. Because episodic memory is critical for daily life functioning, the development of effective interventions to reduce memory loss in elderly individuals is of great importance. Previous studies in young adults showed that the dorsolateral prefrontal cortex (DLPFC) plays a causal role in strengthening of verbal episodic memories through reconsolidation. The aim of the present study was to explore the extent to which facilitatory transcranial direct current stimulation (anodal tDCS) over the left DLPFC would strengthen existing episodic memories through reconsolidation in elderly individuals. On Day 1, older adults learned a list of 20 words. On Day 2 (24 h later), they received a reminder or not, and after 10 min tDCS was applied over the left DLPFC. Memory recall was tested on Day 3 (48 h later) and Day 30 (1 month later). Surprisingly, anodal tDCS over the left DLPFC (i.e., with or without the reminder) strengthened existing verbal episodic memories and reduced forgetting compared to sham stimulation. These results provide a framework for testing the hypothesis that facilitatory tDCS of left DLPFC might strengthen existing episodic memories and reduce memory loss in older adults with amnestic mild cognitive impairment.

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Chinese sex differences in intelligence: Some new evidence

Jianghong Liu & Richard Lynn, Personality and Individual Differences, March 2015, Pages 90–93

Abstract:
Sex differences on the WISC-R in Chinese children were examined in a sample of 788 aged 12 years. Boys obtained a higher mean full scale IQ than girls of 3.75 IQ points, a higher performance IQ of 4.20 IQ points, and a higher verbal IQ of 2.40 IQ points. Boys obtained significantly higher means on the information, picture arrangement, picture completion, block design, and object assembly subtests, while girls obtained a significantly higher mean on coding. The results were in general similar to the sex differences in the United States standardisation sample of the WISC-R. Boys showed greater variability than girls.

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The Smarter, the Stronger: Intelligence Level Correlates With Brain Resilience To Systematic Insults

Emiliano Santarnecchi, Simone Rossi & Alessandro Rossi Cortex, forthcoming

Abstract:
Neuroimaging evidences posit human intelligence as tightly coupled with several structural and functional brain properties, also suggesting its potential protective role against aging and neurodegenerative conditions. However, whether higher-order cognition might in fact lead to a more resilient brain has not been quantitatively demonstrated yet. Here we document a relationship between individual intelligence quotient (IQ) and brain resilience to targeted and random attacks, as measured through resting-state fMRI graph-theoretical analysis in 102 healthy individuals. In this modeling context, enhanced brain robustness to targeted attacks in individuals with higher IQ is supported by an increased distributed processing capacity despite the systematic loss of the most important node(s) of the system. Moreover, brain resilience in individuals with higher IQ is supported by a set of neocortical regions mainly belonging to language and memory processing network(s), whereas regions related to emotional processing are mostly responsible for lower IQ individuals. Results suggest intelligence level among the predictors of post-lesional or neurodegenerative recovery, also promoting the evolutionary role of higher order cognition, and simultaneously suggesting a new framework for brain stimulation interventions aimed at counteract brain deterioration over time.

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Induced mild systemic inflammation is associated with impaired ability to improve cognitive task performance by practice

Nicola Paine et al., Psychophysiology, forthcoming

Abstract:
Elevated inflammatory levels are linked to poorer cognition, but experimental confirmation is lacking. This report examined associations between cognitive performance and inflammation induced by exercise and vaccination. Thirty-six (exercise N = 18, vaccination N = 18) healthy males completed a paced auditory serial addition test (PASAT), which is a multifaceted measure of cognitive function. The task was completed in placebo and elevated inflammation states. Improvements in PASAT performance were related to inflammation. In the exercise study, IL-6 during the first PASAT negatively correlated with PASAT improvement (p = .022). In the vaccination study, increases in C-reactive protein between PASATs correlated with reduced PASAT improvement (p < .001). Inflammation was linked to reduced improvements in cognitive performance. Further research should identify the specific cognitive functions affects and the underlying mechanisms.

By KEVIN LEWIS | 09:00:00 AM

Saturday, December 20, 2014

Within reach

Holding a Silver Lining Theory: When Negative Attributes Heighten Performance

Alexandra Wesnousky, Gabriele Oettingen & Peter Gollwitzer, Journal of Experimental Social Psychology, March 2015, Pages 15-22

Abstract:
Holding a lay theory that a negative personal attribute is associated with a positive attribute (i.e., a silver lining theory), may increase effortful performance in the domain of the positive attribute. In Study 1, individuals readily generated personal silver lining theories when prompted to consider a negative attribute, and the majority of individuals endorsed them for themselves. In Studies 2 and 3, we investigated how believing in a silver lining theory affected performance using the specific silver lining theory that impulsivity was associated with creativity. In both a college (Study 2) and an online sample (Study 3), individuals induced to believe that they were impulsive and then given the specific silver lining theory that impulsivity was related to creativity showed greater effort-based creativity than those for whom the silver lining theory was refuted. In Study 4, individuals made to believe that they were impulsive and given the silver lining theory performed more creatively than those who received no information about a silver lining theory, indicating that the silver lining theory increased performance relative to baseline. Silver lining lay theories may allow people to compensate for a negative attribute by promoting effortful behavior in the domain of a positive attribute believed to be linked to that negative attribute.

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Eating and inflicting pain out of boredom

Remco Havermans et al., Appetite, February 2015, Pages 52-57

Abstract:
In the present study it was investigated whether boredom promotes eating and if so, whether this effect likely reflects an increased drive for rewarding stimulation (positive reinforcement) or more plainly the drive to escape boredom (negative reinforcement). In the latter case, the valence of the stimulation should not matter and people might even be willing to look for negative stimulation, for instance to hurt oneself, just to escape boredom. In two parallel experiments, it was tested whether induced boredom promotes the consumption of chocolate (Experiment 1) and whether participants likewise are more inclined to self-administer electrocutaneous stimuli (Experiment 2). In both experiments, a total of 30 participants attended two separate sessions watching a documentary for 1 hour (neutral condition) and a monotonous repetition of a single clip from the same documentary for 1 hour (boring condition), in balanced order. During Experiment 1, participants had free access to M&Ms and during Experiment 2 participants could freely self-administer brief electrical shocks. It was found that participants ate more M&Ms when bored but also that they more readily self-administered electrical shocks when bored. It is concluded that eating when bored is not driven by an increased desire for satisfying incentive stimulation, but mainly by the drive to escape monotony.

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Pardon the Interruption: Goal Proximity, Perceived Spare Time, and Impatience

Ji Hoon Jhang & John Lynch, Journal of Consumer Research, forthcoming

Abstract:
There is no worse time to be interrupted than right now. Being close to attaining a goal to complete a focal task increases the attractiveness of that task compared to an interrupting task (study 1), makes people less willing to take on some otherwise attractive interruption than if they were farther away from completion (studies 2, 3, and 4), and causes them to perceive that in that moment they have little spare time (studies 3 and 4). Consumers immersed in goal pursuit are affected by local progress on an individual subgoal that supports an overarching goal even if this has no effect on the timing of attaining the overarching goal. Observers do not appreciate the motivating power of proximity to completing subgoals, and this leads them to mispredict the behavior of others (study 5).

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The Effects of Incentive Framing on Performance Decrements for Large Monetary Outcomes: Behavioral and Neural Mechanisms

Vikram Chib, Shinsuke Shimojo & John O'Doherty, Journal of Neuroscience, 5 November 2014, Pages 14833-14844

Abstract:
There is a nuanced interplay between the provision of monetary incentives and behavioral performance. Individuals' performance typically increases with increasing incentives only up to a point, after which larger incentives may result in decreases in performance, a phenomenon known as "choking." We investigated the influence of incentive framing on choking effects in humans: in one condition, participants performed a skilled motor task to obtain potential monetary gains; in another, participants performed the same task to avoid losing a monetary amount. In both the gain and loss frame, the degree of participants' behavioral loss aversion was correlated with their susceptibility to choking effects. However, the effects were markedly different in the gain and loss frames: individuals with higher loss aversion were susceptible to choking for large prospective gains and not susceptible to choking for large prospective losses, whereas individuals with low loss aversion choked for large prospective losses but not for large prospective gains. Activity in the ventral striatum was predictive of performance decrements in both the gain and loss frames. Moreover, a mediation analysis revealed that behavioral loss aversion hindered performance via the influence of ventral striatal activity on motor performance. Our findings indicate that the framing of an incentive has a profound effect on an individual's susceptibility to choking effects, which is contingent on their loss aversion. Furthermore, we demonstrate that the ventral striatum serves as an interface between incentive-driven motivation and instrumental action, regardless of whether incentives are framed in terms of potential losses or gains.

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Purpose in life and use of preventive health care services

Eric Kim, Victor Strecher & Carol Ryff, Proceedings of the National Academy of Sciences, 18 November 2014, Pages 16331-16336

Abstract:
Purpose in life has been linked with better health (mental and physical) and health behaviors, but its link with patterns of health care use are understudied. We hypothesized that people with higher purpose would be more proactive in taking care of their health, as indicated by a higher likelihood of using preventive health care services. We also hypothesized that people with higher purpose would spend fewer nights in the hospital. Participants (n = 7,168) were drawn from the Health and Retirement Study, a nationally representative panel study of American adults over the age of 50, and tracked for 6 y. After adjusting for sociodemographic factors, each unit increase in purpose (on a six-point scale) was associated with a higher likelihood that people would obtain a cholesterol test [odds ratio (OR) = 1.18, 95% confidence interval (CI) = 1.08-1.29] or colonoscopy (OR = 1.06, 95% CI = 0.99-1.14). Furthermore, females were more likely to receive a mammogram/X-ray (OR = 1.27, 95% CI = 1.16-1.39) or pap smear (OR = 1.16, 95% CI = 1.06-1.28), and males were more likely to receive a prostate examination (OR = 1.31, 95% CI = 1.18-1.45). Each unit increase in purpose was also associated with 17% fewer nights spent in the hospital (rate ratio = 0.83, 95% CI = 0.77-0.89). An increasing number of randomized controlled trials show that purpose in life can be raised. Therefore, with additional research, findings from this study may inform the development of new strategies that increase the use of preventive health care services, offset the burden of rising health care costs, and enhance the quality of life among people moving into the ranks of our aging society.

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Loss of Control Stimulates Approach Motivation

Katharine Greenaway et al., Journal of Experimental Social Psychology, January 2015, Pages 235-241

Abstract:
The present research introduces a framework for understanding motivational reactions to control deprivation. Two experiments demonstrated that loss of control can stimulate approach motivation. Loss of control led to greater approach motivation in terms of enhanced motivation to achieve goals (Experiment 1) and greater self-reported high approach affect (Experiment 1 & 2). Experiment 2 additionally revealed that the effect of control deprivation on approach motivation was eliminated when participants misattributed their arousal to an external source. Overall, the findings demonstrate that loss of control can stimulate approach motivation as part of an adaptive motivational system aimed at coping with perceived lack of control.

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Asymmetric frontal cortical activity predicts effort expenditure for reward

David Hughes et al., Social Cognitive and Affective Neuroscience, forthcoming

Abstract:
An extensive literature shows that greater left, relative to right, frontal cortical activity (LFA) is involved in approach-motivated affective states, and reflects stable individual differences in approach motivation. However, relatively few studies have linked LFA to behavioral indices of approach motivation. In this study, we examine the relation between LFA and effort expenditure for reward, a behavioral index of approach motivation. LFA was calculated for 51 right-handed participants (55% female) using power spectral analysis of electroencephalogram (EEG) recorded at rest. Participants also completed the Effort Expenditure for Rewards Task (EEfRT; Treadway, Buckholtz, Schwartzman, Lambert, & Zald, 2009), which presents a series of trials requiring a choice between a low-reward low-effort task and a high-reward high-effort task. We found that individuals with greater resting LFA were more willing to expend greater effort in the pursuit of larger rewards, particularly when reward delivery was less likely. Our findings offer a more nuanced understanding of the motivational significance of LFA, in terms of processes that mitigate the effort- and uncertainty- related costs of pursuing rewarding goals.

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The Progress Bias in Goal Pursuit: When One Step Forward Seems Larger than One Step Back

Margaret Campbell & Caleb Warren, Journal of Consumer Research, forthcoming

Abstract:
Consumers often pursue goals (e.g., losing weight) where the chance of attaining the goal increases with some behaviors (e.g., exercise) but decreases with others (e.g., eating). Although goal monitoring is known to be a critical step in self-control for successful goal pursuit, little research investigates whether consumers accurately monitor goal progress. Seven experiments demonstrate that consumers tend to show a progress bias in goal monitoring, perceiving that goal-consistent behaviors (e.g., saving $45) help progress more than goal-inconsistent behaviors of the equivalent size (e.g., spending $45) hurt it. Expectations of goal attainment moderate the progress bias; reducing the expectation that the goal will be reached reduces the tendency to perceive goal-consistent behaviors to have a larger impact on goal progress than equivalent goal-inconsistent behaviors. A study on exercise and eating shows that although the progress bias can increase initial goal persistence, it can also lead to premature goal release due to poor calibration of overall progress.

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The Interactive Effect of Positive Inequity and Regulatory Focus on Work Performance

Zhi Liu & Joel Brockner, Journal of Experimental Social Psychology, March 2015, Pages 111-116

Abstract:
The present study examined how the work performance of promotion-focused people and prevention-focused people was affected by two different forms of positive inequity: overpayment and having a job. After completing an initial task, participants were randomly assigned to one of three conditions: (1) an Overpayment condition in which participants were told that they would receive greater payment than the other participant (who was actually a confederate) for doing the same work, (2) a Having a Job condition in which participants were assigned to have a job while the other participant (the confederate) was dismissed prematurely without compensation, and (3) a control condition in which participants and the confederate were treated equitably. Relative to their prevention-focused counterparts, promotion-focused participants performed better in both the Overpayment and the Having a Job conditions than in the control condition. Theoretical implications are discussed.

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Talking About Behaviors in the Passive Voice Increases Task Performance

Ibrahim Senay, Muhammet Usak & Pavol Prokop, Applied Cognitive Psychology, forthcoming

Abstract:
Self-talk can help people redirect their attention focused on themselves to the tasks they are working on with important consequences for their task performance. Across four experiments and two different types of languages, Turkish and Slovak, people describing their own behaviors to themselves, as well as merely reading or writing sentences depicting some fictitious events, in the passive (vs. the active) voice performed better on various tasks of motor and verbal performance. The effect was present to the extent that people maintained their control over task-distracting thoughts or felt more responsible for their task success/failure. In sum, talking about task behaviors in the passive voice may increase the perceived role of task-related factors while decreasing the role of agent-related factors in achieving task success, whereby the task focus, hence performance, increases. The results are important for understanding the role of self-talk in performance with implications for changing important outcomes.

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Follow Your Heart or Your Head? A Longitudinal Study of the Facilitating Role of Calling and Ability in the Pursuit of a Challenging Career

Shoshana Dobrow Riza & Daniel Heller, Journal of Applied Psychology, forthcoming

Abstract:
While making early career decisions in which pursuing what one loves and earning a secure living are at odds with one another, when and why will the intrinsic considerations prevail over the extrinsic considerations? We posit that a key factor in resolving this dilemma in favor of the intrinsic side of the career is the sense of calling, a consuming, meaningful passion people experience toward the domain. We test the connection between early callings (in adolescence) and later career pursuit (in adulthood) and the mediating role of perceived and actual abilities (in young adulthood) in a career context in which the intrinsic and extrinsic sides of a career can clash: the path to become a professional musician. In an 11-year 5-wave longitudinal study of 450 amateur high school musicians progressing from adolescence to adulthood, we found that regardless of their actual musical ability, people with stronger early callings were likely to perceive their abilities more favorably, which led them to pursue music professionally. Our findings thus indicate an intriguing pattern in which the experience of stronger early callings led to greater perceived ability that was not reflected in greater actual ability. Perceived ability, rather than objective ability as assessed by awards won in music competitions, led to subsequent career pursuit. We discuss implications for theory and research on the nature and consequences of calling, as well as for career decision making, both in general and in challenging career contexts in particular.

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Social exclusion causes a shift toward prevention motivation

Jina Park & Roy Baumeister, Journal of Experimental Social Psychology, January 2015, Pages 153-159

Abstract:
Four studies demonstrated that social exclusion caused a shift from promotion toward prevention motivation. Lonely individuals reported stronger prevention motivation and weaker promotion motivation than non-lonely individuals (Study 1). Those who either recalled an experience of social exclusion or were ostracized during an on-line ball tossing game reported stronger prevention motivation and generated fewer goal-promoting strategies (Studies 2 and 3) than those who were not excluded. Last, a hypothetical scenario of social exclusion caused a conservative response bias, whereas a scenario of social acceptance yielded a risky response bias in a recognition task (Study 4).

By KEVIN LEWIS | 09:00:00 AM

Friday, December 19, 2014

Paid time off

The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers

Jeffrey Clemens & Michael Wither
NBER Working Paper, December 2014

Abstract:
We estimate the minimum wage’s effects on low-skilled workers’ employment and income trajectories. Our approach exploits two dimensions of the data we analyze. First, we compare workers in states that were bound by recent increases in the federal minimum wage to workers in states that were not. Second, we use 12 months of baseline data to divide low-skilled workers into a “target” group, whose baseline wage rates were directly affected, and a “within-state control” group with slightly higher baseline wage rates. Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation. Methodologically, we show that our approach identifies targeted workers more precisely than the demographic and industrial proxies used regularly in the literature. Additionally, because we identify targeted workers on a population-wide basis, our approach is relatively well suited for extrapolating to estimates of the minimum wage’s effects on aggregate employment. Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.

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Are State Workers Overpaid? Survey Evidence from Liquor Privatization in Washington State

Andrew Chamberlain
University of California Working Paper, August 2014

Abstract:
Industry privatizations that result in exogenous job displacement of public employees can be exploited to estimate public sector wage rents. I report the findings of an original survey I administered to examine how wages of displaced government workers were affected by a 2012 privatization of liquor retailing in Washington State. Based on a panel difference-in-differences estimator I find that privatization reduced wages by $2.51 per hour or 17 percent compared to a counterfactual group of nearly identical non-displaced workers, with larger effects for women. I decompose wage losses into three rents identified in the literature: public sector rents, union premiums, and industry-specific human capital. Public sector wage premiums separately account for 85 to 90 percent of overall wage losses, while union premiums and industry-specific human capital account for just 10 to 15 percent. The results are consistent with a roughly 16 percent public sector wage premium.

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Performance pay and unemployment during the great recession

Daniel Parent
Economics Letters, January 2015, Pages 31–34

Abstract:
With data from the Panel Study of Income Dynamics I show that individuals in performance pay jobs were much less likely to be unemployed at the time of the interview than those in “fixed” wage jobs during the 2008 recession. While their unemployment rate is always lower in non-recession years, there is little evidence that this association was any weaker during the recession. Additional evidence shows that performance pay has a similar effect on the incidence of layoffs vs quits in both non-recession and recession years.

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The $10.10 Minimum Wage Proposal: An Evaluation across States

Andrew Hanson & Zackary Hawley
Journal of Labor Research, December 2014, Pages 323-345

Abstract:
This paper offers state-level estimates of job loss from increasing the federal minimum wage to $10.10 per hour in 2016. Given the vast differences in nominal wages across geography, a federal increase in minimum wage that is not indexed to local wage levels will have a differential impacts across states. The proposed minimum wage would be binding for between 17 and 18 % of workers nationally. We estimate coverage rates ranging from just 4 % in Washington D.C. to as high as 51 % in Puerto Rico, with 13 states having at least 20 % of the employed population covered by the proposal. Using labor demand elasticities from previous empirical work, these coverage rates imply national employment losses between 550,000 and 1.5 million workers. The range of state estimates shows that states are differentially impacted, with high-end loss estimates ranging between 2.8 % of covered employees in Arkansas to over 41 % in Puerto Rico. Sensitivity analysis highlights that using even a simple methodology with relatively few assumptions for estimating employment loss from minimum wage changes is subject to a high degree of uncertainty.

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Competitive Pressure and the Decline of the Rust Belt: A Macroeconomic Analysis

Simeon Alder, David Lagakos & Lee Ohanian
NBER Working Paper, October 2014

Abstract:
No region of the United States fared worse over the postwar period than the “Rust Belt,” the heavy manufacturing region bordering the Great Lakes. This paper hypothesizes that the Rust Belt declined in large part due to a lack of competitive pressure in its labor and output markets. We formalize this thesis in a two-region dynamic general equilibrium model, in which productivity growth and regional employment shares are determined by the extent of competition. Quantitatively, the model accounts for much of the large secular decline in the Rust Belt’s employment share before the 1980s, and the relative stabilization of the Rust Belt since then, as competitive pressure increased.

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Debt, Jobs, or Housing: What's Keeping Millennials at Home?

Zachary Bleemer et al.
Federal Reserve Working Paper, November 2014

Abstract:
Young Americans’ residence choices have changed markedly over the past fifteen years, with recent cohorts entering the housing market at lower rates, and lingering much longer in parents’ households. This paper begins with descriptive evidence on the residence choices of 1 percent of young Americans with credit reports, observed quarterly for fifteen years in the Federal Reserve Bank of New York’s Equifax-sourced Consumer Credit Panel (CCP). Steep increases in the rate of living with parents or other substantially older household members have emerged as youth increasingly forsake living alone or with groups of roommates. Coupledom, however, appears stable. Homeownership at age thirty shows a precipitous drop following the recession, particularly for student borrowers. In an effort to decompose the contributions of housing market, labor market, and student debt changes to the observed changes in young Americans’ living arrangements, we model flows into and out of co-residence with parents. Estimates suggest countervailing influences of local economic growth on co-residence: strengthening youth labor markets support moves away from home, but rising local house prices send independent youth back to parents. Finally, we find that student loans deter independence: state-cohort groups who were more heavily reliant on student debt while in school are significantly and substantially more likely to move home to parents when living independently, and are significantly and substantially less likely to move away from parents when living at home.

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Job Referral Networks and the Determination of Earnings in Local Labor Markets

Ian Schmutte
Journal of Labor Economics, January 2015, Pages 1-32

Abstract:
Despite their documented importance in the labor market, little is known about how workers use social networks to find jobs and their resulting effect on earnings. I use geographically detailed US employer-employee data to infer the role of social networks in connecting workers to jobs in high-paying firms. To identify social interactions in job search, I exploit variation in social network quality within small neighborhoods. Workers are more likely to change jobs, and more likely to move to a higher-paying firm, when their neighbors are employed in high-paying firms. Furthermore, local referral networks help match high-ability workers to high-paying firms.

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Can Unemployment Insurance Spur Entrepreneurial Activity?

David Sraer et al.
NBER Working Paper, November 2014

Abstract:
We study a large-scale French reform that provided generous downside insurance for unemployed individuals starting a business. We study whether this reform affects the composition of people who are drawn into entrepreneurship. New firms started in response to the reform are, on average, smaller, but have similar growth expectations and education levels compared to start-ups before the reform. They are also as likely to survive or to hire. In aggregate, the effect of the reform on employment is largely offset by large crowd-out effects. However, because new firms are more productive, the reform has the impact of raising aggregate productivity. These results suggest that the dispersion of entrepreneurial abilities is small in the data, so that the facilitation of entry leads to sizable Schumpeterian dynamics at the firm-level.

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Government Ideology and Unemployment in the U.S. States

Nathan Kelly & Christopher Witko
State Politics & Policy Quarterly, December 2014, Pages 389-413

Abstract:
Research shows that when the more liberal Democratic Party controls the national government, unemployment is lower, but whether liberal state governments are associated with lower unemployment has not been examined. We argue that more left-leaning governments in the U.S. states have the same preference for and willingness to use government to reduce unemployment, but that the greater resource and policymaking constraints that the states face during economic downturns limit their ability to shape unemployment to economic growth periods. We find evidence for these arguments in an analysis of the U.S. states for the period of 1975–2010. Specifically, when economic growth is low, liberal state governments are associated with increases in unemployment rates similar to or even somewhat higher than conservative governments, but when growth is moderate to high, liberal state governments are associated with greater-than-expected reductions in unemployment. We also provide some evidence that different state spending decisions between liberal and conservative state governments may explain these patterns.

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Are Public Sector Jobs Recession-Proof? Were They Ever?

Jason Kopelman & Harvey Rosen
NBER Working Paper, November 2014

Abstract:
We use data from the Displaced Worker Survey supplements of the Current Population Survey from 1984 to 2012 to investigate the differences in job loss rates between workers in the public and private sectors. Our focus is on the extent to which recessions affect the differential between job loss rates in the two sectors. Our main findings include the following: First, taking into account differences in characteristics among workers does not eliminate sectoral differences in the likelihood of losing one’s job. After accounting for worker characteristics, during both recessionary and non-recessionary periods, the probability of job loss is higher for private sector workers than for public sector workers at all levels of government. Second, the probability of displacement for private sector workers increased during both the Great Recession and earlier recessions during our sample period. Third, it is less straightforward to characterize the experience of public sector workers during recessions. Job loss rates sometimes increased and sometimes decreased, depending on whether the employer was the federal, state, or local government. The impact of the Great Recession on displacement rates for public sector employees was somewhat different from that in previous recessions. Fourth, the advantage of public sector employment in terms of job loss rates generally increased during recessions for all groups of public sector workers. Thus, the answer to the question posed in the title is that public sector jobs, while not generally recession-proof, do offer more security than private sector jobs, and the advantage widens during recessions. These patterns are present across genders, races, and educational groups.

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Labor's Enduring Divide: The Distinct Path of Public Sector Unions in the United States

Alexis Walker
Studies in American Political Development, October 2014, Pages 175-200

Abstract:
Why did public sector unionization rise so dramatically and then plateau at the same time as private sector unionization underwent a precipitous decline? The exclusion of public sector employees from the centerpiece of private sector labor law — the 1935 Wagner Act — divided U.S. labor law and relegated public sector demand-making to the states. Consequently, public sector employees' collective bargaining rights were slow to develop and remain geographically concentrated, unequal and vulnerable. Further, divided labor law put the two movements out of alignment; private sector union density peaked nearly a decade before the first major statutes granting public sector collective bargaining rights passed. As a result of this incongruent timing and sequencing, the United States has never had a strong union movement comprised of both sectors at the height of their membership and influence.

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Regional disadvantage? Employee non-compete agreements and brain drain

Matt Marx, Jasjit Singh & Lee Fleming
Research Policy, forthcoming

Abstract:
A growing body of research has documented the local impact of employee non-compete agreements, but their effect on interstate migration patterns remains unexplored. Exploiting an inadvertent policy reversal in Michigan as a natural experiment, we show that non-compete agreements are responsible for a “brain drain” of knowledge workers out of states that enforce such contracts to states where they are not enforceable. Importantly, this effect is felt most strongly on the margin of workers who are more collaborative and whose work is more impactful.

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Unemployment in the Great Recession: A Comparison of Germany, Canada and the United States

Florian Hoffmann & Thomas Lemieux
NBER Working Paper, November 2014

Abstract:
This paper investigates the potential reasons for the surprisingly different labor market performance of the United States, Canada, Germany, and several other OECD countries during and after the Great Recession of 2008-09. Unemployment rates did not change substantially in Germany, increased and remained at relatively high levels in the United States, and increased moderately in Canada. More recent data also show that, unlike Germany and Canada, the U.S. unemployment rate remains largely above its pre-recession level. We find two main explanations for these differences. First, the large employment swings in the construction sector linked to the boom and bust in U.S. housing markets can account for a large fraction of the cross-country differences in aggregate labor market outcomes for the three countries. Second, cross-country differences are consistent with a conventional Okun relationship linking GDP growth to employment performance. In particular, relative to pre-recession trends there has been a much larger drop in GDP in the United States than Germany between 2008 and 2012. In light of these facts, the strong performance of the German labor market is consistent with other aggregate outcomes of the economy.

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Individual Experience of Positive and Negative Growth is Asymmetric: Global Evidence from Subjective Well-Being Data

Jan‐Emmanuel De Neve et al.
Harvard Working Paper, October 2014

Abstract:
Are individuals more sensitive to losses than gains in macroeconomic growth? Using subjective well-being measures across three large data sets, we observe an asymmetry in the way positive and negative economic growth are experienced, with losses having more than twice as much impact on individual happiness as compared to equivalent gains. We use Gallup World Poll data drawn from 151 countries, BRFSS data taken from a representative sample of 2.5 million US respondents, and Eurobarometer data that cover multiple business cycles over four decades. This research provides a new perspective on the welfare cost of business cycles with implications for growth policy and our understanding of the long-run relationship between GDP and subjective well-being.

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Just the Facts: Demographic and Cross-Country Dimensions of the Employment Slump

Jeffrey Clemens & Michael Wither
University of California Working Paper, November 2014

Abstract:
We present data characterizing the U.S. labor market during the Great Recession and subsequent recovery. U.S. employment declines were dramatic among young adults, substantial among prime-aged adults, and modest among those near retirement. The decline in employment among working-age adults generally exceeded those that occurred in other advanced economies. We assess the potential explanatory power of population aging and increases in educational attainment as factors underlying these developments. Recent analyses suggest that population aging can explain nearly one half of the decline in the labor force participation rate and one third of the decline in the employment to population ratio from 2007 to 2013. Our comparisons of employment developments across age groups and countries provide reason to view this one third as an upper bound on aging's plausible contribution. We conduct a more detailed analysis of changes in employment and school attendance across demographic sub-groups of the young adult population. Across sub-groups defined by age, gender, and race/ethnicity, changes in school enrollment predict very little of the variation in this period's employment changes. Taken together, aging and enrollment trends thus appear to underlie a modest to moderate fraction of the aggregate employment decline. We conclude by discussing a range of non-demographic factors that may have contributed to the decline, but on which existing research has yet to arrive at a consensus.

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The Long Reach of Education: Early Retirement

Steven Venti & David Wise
NBER Working Paper, December 2014

Abstract:
The goal of this paper is to draw attention to the long lasting effect of education on economic outcomes. We use the relationship between education and two routes to early retirement – the receipt of Social Security Disability Insurance (DI) and the early claiming of Social Security retirement benefits – to illustrate the long-lasting influence of education. We find that for both men and women with less than a high school degree the median DI participation rate is 6.6 times the participation rate for those with a college degree or more. Similarly, men and women with less than a high school education are over 25 percentage points more likely to claim Social Security benefits early than those with a college degree or more. We focus on four critical “pathways” through which education may indirectly influence early retirement – health, employment, earnings, and the accumulation of assets. We find that for women health is the dominant pathway through which education influences DI participation. For men, the health, earnings, and wealth pathways are of roughly equal magnitude. For both men and women the principal channel through which education influences early Social Security claiming decisions is the earnings pathway. We also consider the direct effect of education that does not operate through these pathways. The direct effect of education is much greater for early claiming of Social Security benefits than for DI participation, accounting for 72 percent of the effect of education for men and 67 percent for women. For women the direct effect of education on DI participation is not statistically significant, suggesting that the total effect may be through the four pathways.

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US union revival, minority unionism and inter-union conflict

Mark Harcourt, Helen Lam & Geoffrey Wood
Journal of Industrial Relations, November 2014, Pages 653-671

Abstract:
One option for reversing US union decline, requiring no legislative change, would involve re-legitimizing non-majority or minority union representation, allowing unions to organize without running the gauntlet of union certification. Such minority representation, applicable only to workplaces without majority union support on a members-only basis, could run in parallel with the existing system of exclusive representation in workplaces where majority support is achieved. The increased representation in the currently unrepresented workplaces would inevitably promote workers’ collective voice and contribute to union revival. However, minority unionism has been criticized for breeding union competition because it is non-exclusive. In this paper, the nature and extent of inter-union conflict under minority unionism are re-examined, using survey data from unions in New Zealand which already has non-exclusive, minority union representation. The low levels and consequences of conflict suggest that the benefits of minority unionism far outweigh any potentially unfavourable effects.

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Returns to Skills around the World: Evidence from PIAAC

Eric Hanushek et al.
European Economic Review, January 2015, Pages 103–130

Abstract:
Existing estimates of the labor-market returns to human capital give a distorted picture of the role of skills across different economies. International comparisons of earnings analyses rely almost exclusively on school attainment measures of human capital, and evidence incorporating direct measures of cognitive skills is mostly restricted to early-career workers in the United States. Analysis of the new PIAAC survey of adult skills over the full lifecycle in 23 countries shows that the focus on early-career earnings leads to underestimating the lifetime returns to skills by about one quarter. On average, a one-standard-deviation increase in numeracy skills is associated with an 18 percent wage increase among prime-age workers. But this masks considerable heterogeneity across countries. Eight countries, including all Nordic countries, have returns between 12 and 15 percent, while six are above 21 percent with the largest return being 28 percent in the United States. Estimates are remarkably robust to different earnings and skill measures, additional controls, and various subgroups. Instrumental-variable models that use skill variation stemming from school attainment, parental education, or compulsory-schooling laws provide even higher estimates. Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares.

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Employment Cyclicality and Firm Quality

Lisa Kahn & Erika McEntarfer
NBER Working Paper, November 2014

Abstract:
Who fares worse in an economic downturn, low- or high-paying firms? Different answers to this question imply very different consequences for the costs of recessions. Using U.S. employer-employee data, we find that employment growth at low-paying firms is less cyclically sensitive. High-paying firms grow more quickly in booms and shrink more quickly in busts. We show that while during recessions separations fall in both high-paying and low-paying firms, the decline is stronger among low-paying firms. This is particularly true for separations that are likely voluntary. Our findings thus suggest that downturns hinder upward progression of workers toward higher paying firms - the job ladder partially collapses. Workers at the lowest paying firms are 20% less likely to advance in firm quality (as measured by average pay in a firm) in a bust compared to a boom. Furthermore, workers that join firms in busts compared to booms will on average advance only half as far up the job ladder within the first year, due to both an increased likelihood of matching to a lower paying firm and a reduced probability of moving up once matched. Thus our findings can account for some of the lasting negative impacts on workers forced to search for a job in a downturn, such as displaced workers and recent college graduates.

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Repurposing American Labor Law: Immigrant Workers, Worker Centers, and the National Labor Relations Act

Jessica Garrick
Politics & Society, December 2014, Pages 489-512

Abstract:
The National Labor Relations Act (NLRA) of 1935 has been widely portrayed as an anachronistic piece of legislation that needs to be reformed or abandoned. In the absence of reform, many US labor unions try to avoid the NLRA process altogether by organizing workers outside the confines of the law. But Somos un Pueblo Unido, or “Somos,” a worker center in New Mexico, has been using a novel interpretation of the NLRA less to boost union density than to develop an alternative to contract unionism. By helping nonunionized workers use Section 7 of the NLRA to act concertedly in their own defense, I argue, Somos is combating employer abuse, in the short run, and demonstrating that worker centers and their memberships may be transforming the US labor movement, in the long run. Their experiences illustrate the ability of organizations to redeploy existing institutional resources with potentially transformative results.

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The Opportunity Costs of Informal Elder-Care in the United States: New Estimates from the American Time Use Survey

Amalavoyal Chari et al.
Health Services Research, forthcoming

Objectives: To provide nationally representative estimates of the opportunity costs of informal elder-care in the United States.

Data Sources: Data from the 2011 and 2012 American Time Use Survey.

Study Design: Wage is used as the measure of an individual's value of time (opportunity cost), with wages being imputed for nonworking individuals using a selection-corrected regression methodology.

Principal Findings: The total opportunity costs of informal elder-care amount to $522 billion annually, while the costs of replacing this care by unskilled and skilled paid care are $221 billion and $642 billion, respectively.

Conclusions: Informal caregiving remains a significant phenomenon in the United States with a high opportunity cost, although it remains more economical (in the aggregate) than skilled paid care.

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The Effects of Conscription on Education and Earnings: Regression Discontinuity Evidence

Pierre Mouganie
Texas A&M University Working Paper, August 2014

Abstract:
In 1997, the French government put into effect a law that permanently exempted young French male citizens born after Jan 1, 1979 from mandatory military service while still requiring those born before that cutoff date to serve. This paper uses a regression discontinuity design to identify the effect of peacetime conscription on education and labor market outcomes. Results indicate that conscription eligibility induces a significant increase in years of education, which is consistent with conscription avoidance behavior. However, this increased education does not result in either an increase in graduation rates, or in employment and wages. Additional evidence shows conscription has no direct effect on earnings, suggesting that the returns to education induced by this policy was zero.

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Estimating the returns to schooling using cohort-level maternal education as an instrument

John Winters
Economics Letters, January 2015, Pages 25–27

Abstract:
This paper examines effects of schooling on wages instrumenting for individual schooling using cohort-level maternal schooling from previous censuses. Results suggest that an additional year of schooling increases hourly wages by 10 percent for men and 12.6 percent for women.

By KEVIN LEWIS | 09:00:00 AM

Thursday, December 18, 2014

One of a kind

Ethnic diversity deflates price bubbles

Sheen Levine et al.
Proceedings of the National Academy of Sciences, forthcoming

Abstract:
Markets are central to modern society, so their failures can be devastating. Here, we examine a prominent failure: price bubbles. Bubbles emerge when traders err collectively in pricing, causing misfit between market prices and the true values of assets. The causes of such collective errors remain elusive. We propose that bubbles are affected by ethnic homogeneity in the market and can be thwarted by diversity. In homogenous markets, traders place undue confidence in the decisions of others. Less likely to scrutinize others’ decisions, traders are more likely to accept prices that deviate from true values. To test this, we constructed experimental markets in Southeast Asia and North America, where participants traded stocks to earn money. We randomly assigned participants to ethnically homogeneous or diverse markets. We find a marked difference: Across markets and locations, market prices fit true values 58% better in diverse markets. The effect is similar across sites, despite sizeable differences in culture and ethnic composition. Specifically, in homogenous markets, overpricing is higher as traders are more likely to accept speculative prices. Their pricing errors are more correlated than in diverse markets. In addition, when bubbles burst, homogenous markets crash more severely. The findings suggest that price bubbles arise not only from individual errors or financial conditions, but also from the social context of decision making. The evidence may inform public discussion on ethnic diversity: it may be beneficial not only for providing variety in perspectives and skills, but also because diversity facilitates friction that enhances deliberation and upends conformity.

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Condoning Stereotyping?: How Awareness of Stereotyping Prevalence Impacts Expression of Stereotypes

Michelle Duguid & Melissa Thomas-Hunt
Journal of Applied Psychology, forthcoming

Abstract:
The deleterious effects of stereotyping on individual and group outcomes have prompted a search for solutions. One approach has been to increase awareness of the prevalence of stereotyping in the hope of motivating individuals to resist natural inclinations. However, it could be that this strategy creates a norm for stereotyping, which paradoxically undermines desired effects. The present research demonstrates that individuals who received a high prevalence of stereotyping message expressed more stereotypes than those who received a low prevalence of stereotyping message (Studies 1a, 1b, 1c, and 2) or no message (Study 2). Furthermore, working professionals who received a high prevalence of stereotyping message were less willing to work with an individual who violated stereotypical norms than those who received no message, a low prevalence of stereotyping message, or a high prevalence of counter-stereotyping effort message (Study 3). Also, in a competitive task, individuals who received a high prevalence of stereotyping message treated their opponents in more stereotype-consistent ways than those who received a low prevalence of stereotyping message or those who received a high prevalence of counter-stereotyping effort message (Study 4).

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Looking Black or looking back? Using phenotype and ancestry to make racial categorizations

Allison Skinner & Gandalf Nicolas
Journal of Experimental Social Psychology, March 2015, Pages 55–63

Abstract:
When it comes to the racial categorization of biracial individuals, do people look at phenotypicality (i.e., a race consistent appearance) for clues, or do they look back at racial ancestry? We manipulated racial ancestry and racial phenotypicality (using morphed photos) to investigate their influence on race categorizations. Results indicated that while ancestry and phenotypicality information both influenced deliberate racial categorization, phenotypicality had a substantially larger effect. We also investigated how these factors influenced perceptions of warmth and competence, and racial discrimination. We found that Black–White biracials with low Black phenotypicality were perceived as warmer and more competent than biracial targets with moderate and high Black phenotypicality. Moreover, given identical instances of racially discriminatory treatment, low Black racial phenotypicality targets were significantly less likely to be perceived as victims of racial discrimination. Our findings shed light on how ancestry and phenotype influence perceptions of race and real world social judgments such as perceptions of discrimination. Previous studies have shown that low minority ancestry biracials are presumed to have experienced less discrimination; our findings indicate that racial cues impact perceptions of discrimination even in incidences of known racial discrimination.

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Caught in the Middle: Defensive Responses to IAT Feedback Among Whites, Blacks, and Biracial Black/Whites

Jennifer Howell, Sarah Gaither & Kate Ratliff
Social Psychological and Personality Science, forthcoming

Abstract:
This study used archival data to examine how White, Black, and biracial Black/White people respond to implicit attitude feedback suggesting that they harbor racial bias that does not align with their self-reported attitudes. The results suggested that people are generally defensive in response to feedback indicating that their implicit attitudes differ from their explicit attitudes. Among monoracial White and Black individuals, this effect was particularly strong when they learned that they were implicitly more pro-White than they indicated explicitly. By contrast, biracial Black/White individuals were defensive about large discrepancies in either direction (more pro-Black or more pro-White implicit attitudes). These results pinpoint one distinct difference between monoracial and biracial populations and pave the way for future research to further explore how monoracial majority, minority, and biracial populations compare in other types of attitudes and responses to personal feedback.

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The role of attachment style in women’s recognition of sexism

Tara Van Bommel, Amy Sheehy & Janet Ruscher
Personality and Individual Differences, February 2015, Pages 235–240

Abstract:
The present research examined how differences in attachment style might impact women’s awareness of sexism. Identity threat models of stigma emphasize the role of individual differences in responding to social identity threats, however little is known about what factors lead to avoidance versus vigilance for such threats. Furthermore, research shows that insecure attachment is related to avoidant responses to blatantly threatening cues, but vigilance when such cues are ambiguous. Thus, insecurely attached women should acknowledge less sexism toward women when faced with instances of blatant sexism, whereas their awareness should be heightened by instances of ambiguous sexism. Conversely, securely attached women should acknowledge sexism when encountering blatant rather than ambiguous instances of sexism. In a test of these hypotheses, 155 women were exposed to either a male verbally rejecting a women’s opinion for blatantly sexist or ambiguously sexist reasons. The data confirm predictions. The findings suggest interventions to improve outcomes for stigmatized groups should consider impacts of attachment style, and further, that attachment style might partially explain women’s divergent responses to sexism.

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Old and New Forms of Racial Bias in Mediated Sports Commentary: The Case of the National Football League Draft

Anthony Schmidt & Kevin Coe
Journal of Broadcasting & Electronic Media, Fall 2014, Pages 655-670

Abstract:
Applying Social Identity Theory and Linguistic Intergroup Bias to the analysis of mediated sports commentary, this study examines racial bias surrounding the National Football League draft. A content analysis of 41 mock drafts — amounting to more than 1,300 descriptions of individual athletes — revealed significant differences in how commentators discussed White and non-White athletes. In particular, commentators more often described White athletes and in-group athletes in terms of mental traits, but described non-White athletes and out-group athletes in terms of physical traits. Additionally, in-group athletes were talked about in more abstract terms, consistent with Linguistic Intergroup Bias.

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Old Glass Ceilings are Hard to Break: Gender Usage Trends in Annual Reports

Tim Loughran & Bill McDonald
University of Notre Dame Working Paper, November 2014

Abstract:
We examine gender usage in a sample of 89,195 annual reports filed with the SEC during 1996-2013. We find that, after adjusting for other effects, annual reports by younger firms use proportionally more female-linked words than documents created by older, more mature companies. This finding likely reflects gender-related cultural differences between young and old firms. We also report that gender usage differs dramatically across both industry and market values of equity. Historically male dominated industries and industries that do not sell directly to retail customers have lower ratios of female/male word usage while industries characterized as business-to-consumer have substantially higher relative female counts. Larger companies have higher public accountability and thus, as expected, have annual report language that more frequently uses female titles and personal pronouns.

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Memory of an outgroup: (Mis)identification of Middle Eastern-looking men in news stories about crime

Jennifer Hoewe
Journal of Media Psychology, Fall 2014, Pages 161-175

Abstract:
This study examined White individuals’ ability to recall non-White criminal perpetrators, specifically Middle Eastern-looking men, as portrayed in news stories. Considering social identity theory and the Arab/Muslim/Middle Eastern terrorist stereotype, White participants were expected to correctly identify White European-looking men and misidentify Middle Eastern-looking men as the perpetrators in news stories. A 2 (race/ethnicity of the perpetrator: White European- or Middle Eastern-looking) × 2 (story type: violent or nonviolent) experiment revealed that correct recall of the perpetrator for Middle Eastern-looking men was lower than that of White European-looking men. However, White individuals were not significantly more likely to incorrectly recall Middle Eastern-looking men than White European-looking men as perpetrators. Regardless of condition, more negative attitudes toward Arabs and Muslims predicted the incorrect recall of both Middle Eastern- and White European-looking men as perpetrators. These results are explained in light of their contradiction of existing theory. Also, a new measure of attitudes toward Arabs and Muslims is recommended.

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Reducing Prejudice Across Cultures via Social Tuning

Jeanine Skorinko et al.
Social Psychological and Personality Science, forthcoming

Abstract:
This research examines whether culture influences the extent to which people’s attitudes tune toward others’ egalitarian beliefs. Hong Kong Chinese, but not American, participants were less prejudiced, explicitly and implicitly, toward homosexuals when they interacted with a person who appeared to hold egalitarian views as opposed to neutral views (Experiment 1). In Experiments 2 and 3, cultural concepts were manipulated. Americans and Hong Kong Chinese who were primed with a collectivist mind-set showed less explicit and implicit prejudice when the experimenter was thought to endorse egalitarian views than when no views were conveyed. Such differences were not found when both cultural groups were primed with an individualist mind-set. These findings suggest that cultural value orientations can help mitigate prejudice.

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When threats foreign turn domestic: Two ways for distant realistic intergroup threats to carry over into local intolerance

Thijs Bouman, Martijn van Zomeren & Sabine Otten
British Journal of Social Psychology, forthcoming

Abstract:
In times of economic downturn, perceived realistic intergroup threats (e.g., labour competition) often dominate political and media discourse. Although local outgroups (e.g., local immigrants) can be experienced as sources of realistic threats, we propose that such threats can also be perceived to be caused by distant outgroups (e.g., European Union members perceiving Greece to threaten their economies) and that such distant threats can carry over into local intolerance (e.g., increasing intolerance towards local immigrant groups). We predicted and found in two studies that perceived distant realistic threats carried over into local intolerance via two different pathways. First, direct reactions towards the distant outgroup can generalize to culturally similar local outgroups (the group-based association pathway). Secondly, Study 2 indicated that when the distant threat was attributed to stereotypical outgroup traits (e.g., being lazy), distant realistic threats activated local realistic threats, which subsequently influenced local intolerance (the threat-based association pathway). Taken together, our studies indicate that perceived realistic threats foreign can turn domestic, but in two different ways.

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Which Jews dislike contemporary Germans: Range and determinants of German aversion in Czech and U.S. Holocaust survivors and young American Jews

Paul Rozin et al.
Peace and Conflict: Journal of Peace Psychology, Nov 2014, Pages 412-429

Abstract:
We assessed the degree of discomfort reported by U.S. and Czech Holocaust survivors (Study 1) and Jewish American college students (Study 2) to the prospect of physical proximity to a wide range of contemporary Germans with varying linkages to Nazi Germany, and a range of objects or activities associated with Germany (e.g., riding in a Volkswagen). On both measures, there was a very wide range of aversions, from almost absent to almost complete. A substantial number of participants were uncomfortable with Germans born after World War II. The Czech survivors showed the least aversion, less than the students, probably because the Czechs had a great deal of experience with Germans and German culture prior to and following World War II. Trait forgiveness did not predict aversion. Degree of blame for Germans and Jewish identity predicted current aversion. German essentialism — the idea that “Germanness” is inherent, indelible, uniform, and transmitted across generations — may be the best predictor of total German person aversion and is the only predictor that can easily explain the fact that that many individuals are uncomfortable living near Germans who were born after World War II.

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Telling Women That Men Desire Women With Bodies Larger Than the Thin-Ideal Improves Women’s Body Satisfaction

Andrea Meltzer & James McNulty
Social Psychological and Personality Science, forthcoming

Abstract:
One source of women’s body dissatisfaction appears to be the media’s suggestion that men desire extremely thin women. Thus, three independent experiments examined whether reversing this suggestion would improve women’s weight satisfaction. In all three studies, women viewed images of female models with bodies larger than the thin-ideal. Women who were randomly assigned to be told that men found those models attractive experienced increased weight satisfaction compared to women who were not given any information (Studies 1 and 2) and women who were told that men preferred ultra-thin women (Study 2). Study 3 (a) provided evidence for the theoretical mechanism — internalization of the thin-ideal — and (b) revealed that telling women that other women find larger models attractive does not yield similar benefits. These findings extend the tripartite influence model by demonstrating that women’s beliefs about men’s body preferences are an important moderator of the association between media influence and women’s body satisfaction.

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A Preliminary Investigation into Effects of Linguistic Abstraction on the Perception of Gender in Spoken Language

A.B. Siegling, Michelle Eskritt & Mary Delaney
Current Psychology, December 2014, Pages 479-500

Abstract:
We investigated the role that linguistic abstraction may play in people’s perceptions of gender in spoken language. In the first experiment, participants told stories about their best friend and romantic partner. Variations in linguistic abstraction and gender-linked adjectives for describing their close others were examined. Participants used significantly more abstract language to describe men compared to women, possibly reflecting a gender stereotype associated with the dispositionality factor of linguistic abstraction. In a second experiment, a new group of participants judged the gender of the protagonists from the stories generated in Experiment 1, after the explicit linguistic gender cues were removed. Consistent with the dispositionality factor, linguistic abstraction moderated the effects of the gender stereotypicality of the context (masculine, feminine, or neutral) on participants’ gender judgments. Discussion focuses on the implications of the results for the communication of gender stereotypes and the effects of linguistic abstraction in more naturalistic language.

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Who Owns Implicit Attitudes? Testing a Metacognitive Perspective

Erin Cooley et al.
Personality and Social Psychology Bulletin, January 2015, Pages 103-115

Abstract:
Metacognitive inferences about ownership for one’s implicit attitudes have the power to turn implicit bias into explicit prejudice. In Study 1, participants were assigned to construe their implicit attitudes toward gay men as belonging to themselves (owned) or as unrelated to the self (disowned). Construing one’s implicit responses as owned led to greater implicit-explicit attitude correspondence. In Study 2, we measured ownership for implicit attitudes as well as self-esteem. We predicted that ownership inferences would dictate explicit attitudes to the degree that people had positive views of the self. Indeed, higher ownership for implicit bias was associated with greater implicit-explicit attitude correspondence, and this effect was driven by participants high in self-esteem. Finally, in Study 3, we manipulated inferences of ownership and measured self-esteem. Metacognitions of ownership affected implicit-explicit attitude correspondence but only among those with relatively high self-esteem. We conclude that subjective inferences about implicit bias affect explicit prejudice.

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Effects of News Stereotypes on the Perception of Facial Threat

Florian Arendt, Nina Steindl & Peter Vitouch
Journal of Media Psychology, forthcoming

Abstract:
The human face is central to social interactions and therefore of primary importance in social perception. Two recent discoveries have contributed to a more thorough understanding of the role of news stereotypes in the perception of facial threat: First, social-cognition research has revealed that automatically activated stereotypes influence the perception of facial threat. Individuals holding hostile stereotypes toward dark-skinned outgroup members perceive ambiguous dark-skinned faces as more hostile than similar light-skinned faces. Second, media-stereotyping research has found that the media can influence individuals’ automatically activated stereotypes. Combining these two findings, it was hypothesized that reading tabloid articles about crimes committed by dark-skinned offenders would increase the perceived facial threat of meeting dark-skinned strangers in a subsequent situation. This hypothesis was tested in a laboratory experiment. Participants read crime articles where cues indicating (dark) skin color were mentioned or not. The results showed that reading about dark-skinned criminals increases the perceived facial threat of dark-skinned strangers compared with light-skinned strangers.

By KEVIN LEWIS | 09:00:00 AM


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