Sat, 31 March 2018
My guests for this episode are Alex Nowrasteh and Andrew Forrester of the Cato Institute. Our topic is a working paper they recently published titled How Mass Immigration Affects Countries with Weak Economic Institutions: A Natural Experiment in Jordan. The abstract reads as follows: Saddam Hussein’s unexpected 1990 invasion of Kuwait forced 300, 000 Kuwaitis of Palestinian descent to flee into Jordan. By 1991, this large exogenous population shock increased Jordan’s population by about 10 percent. Jordanian law allowed these refugees to work, live, and vote in Jordan immediately upon entry. The refugees did not bring social capital that eroded Jordan’s institutions. On the contrary, we find that Jordan’s economic institutions substantially improved in the decade after the refugees arrived. Our empirical methodology employs difference-in-differences and the synthetic control method, both of which indicate that the significant improvement in Jordanian economic institutions would not have happened to the same extent without the influx of refugees. Our case study indicates that the refugee surge was the main mechanism by which Jordan’s economic institutions improved over this time. Does mass immigration destroy institutions? 1990s Israel as a natural experiment by Benjamin Powell, J.R. Clark and Alex Nowrasteh Jared Rubin's interview about political power and economic growth is complementary with this one. Rubin's theory is that the rising political influence of the bourgeoisie partially caused the economic growth in Northwestern Europe in the early modern period. In Jordan in 1990, the Palestinian minority was particularly urban and bourgeois, so the massive influx of Palestinians increased the political power of the bourgeoisie, thus creating political pressure for increasing economic freedom.
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Fri, 23 March 2018
Phil Magness returns to the podcast to discuss the public choice economics of universities. We discuss the internal politics of universities, their rising reliance on adjunct scholars to teach courses, the increasing numbers of administrators staffing universities, and the trends in faculty employment across disciplines.
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Fri, 16 March 2018
Today's guest is Jeremy Horpedahl of the University of Central Arkansas. Jeremy's work builds on a famous theory from Bruce Yandle's 1983 article " Bootleggers and Baptists-The Education of a Regulatory Economist." The article explored the idea that laws are often passed or defended by coalitions of economic interests (bootleggers) and moral crusaders (Baptists). Though these two groups may be quite different, as in the canonical example, policies are unlikely to succeed without support from both groups. Jeremy's work focuses on a particular example of bootleggers and Baptists in the modern world; specifically in Arkansas. Arkansas has many dry counties, where alcohol may not be sold. Many of these dry counties are adjacent to wet counties, where liquor stores just across the county line can sell to the residents of the dry county. When there are ballot initiatives to make dry counties wet, these liquor stores have the most to lose, so they often spend hundreds of thousands of dollars to prevent the prohibition laws from going to a vote.
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Sat, 3 March 2018
My guest for this episode is Bryan Caplan of George Mason University. We discuss his latest book, The Case Against Education: Why the Education System Is a Waste of Time and Money, in which he argues that the social value of education is negative. This may seem paradoxical, given that more educated individuals tend to earn more than less educated individuals. This can be explained in two ways: First, people who get more education were likely more skilled in the first place; in other words, there is a selection effect. Second, people who are already skilled can use education to demonstrate their skill to employers; economists call this signalling. Signalling plays an important role in Bryan's understanding of the education system. He sees the causal effect of education on income as being 80 percent signalling and 20 percent learning. Most signalling models view signalling as negative sum: signals are costly, and to the extent that they help educated workers by pushing their resumes to the top of the pile, they harm uneducated workers by relegating their resumes to the trash bin. If everyone gets educated, then no one has a better chance of finding a job, but they bear the costs of many years and thousands of dollars of education. Bryan draws on evidence from many different research areas to support his case, from economic research on the Sheepskin effect and comparisons between individual and national effects of education, to educational psychology research on "learning how to learn." We had an excellent conversation and I hope you will enjoy listening to it.
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