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Good fortune, dire poverty, and inequality in Baltimore: An American story

May 13, 2015 Comments off

Good fortune, dire poverty, and inequality in Baltimore: An American story
Source: Brookings Institution

The unrest in Baltimore has fostered nationwide discussion about the root causes of the tensions in the city’s poor neighborhoods that led to an outbreak of riots and mass protests. While criminal justice policy and police-community relationships are arguably at the core of the present debate, the economic and social context in which those actions took shape matters greatly too. Yet media coverage has obscured a few key facts about economic and social conditions in Baltimore and other major American cities. The charts below situate the distress affecting neighborhoods like Freddie Gray’s Sandtown-Winchester against the backdrop of wider dynamics in Baltimore City and its metropolitan area, and in comparison to other cities and regions around the country.

Spring 2015 Brookings Panel on Economic Activity

May 3, 2015 Comments off

Spring 2015 Brookings Panel on Economic Activity
Source: Brookings Institution

New research findings at the Spring 2015 BPEA conference by leading academic and government economists include: a cause of growing inequality; the possible outcomes of an early Federal Reserve boost in the interest rates; public sentiment concerning redistributive fiscal plans; the economic welfare impacts of the fracking boom; an assessment of Chinese government-sponsored firms; and the possible consequences of anonymizing big data.

Beyond College Rankings: A Value-Added Approach to Assessing Two- and Four-Year Schools

April 30, 2015 Comments off

Beyond College Rankings: A Value-Added Approach to Assessing Two- and Four-Year Schools
Source: Brookings Institution

The choice of college is among the most important investment decisions individuals and families make, yet people know little about how institutions of higher learning compare along important dimensions of quality. This is especially true for colleges granting credentials of two years or less, which graduate two out of five postsecondary graduates. Moreover, popular rankings from U.S. News, Forbes, and Money focus only on a small fraction of four-year colleges and tend to reward highly selective institutions over those that may contribute the most to student success.

Drawing on government and private sources, this report analyzes college “value-added,” the difference between actual alumni outcomes (like salaries) and the outcomes one would expect given a student’s characteristics and the type of institution. Value-added captures the benefits that accrue from aspects of college quality we can measure, such as graduation rates and the market value of the skills a college teaches, as well as aspects we can’t.

The value-added measures introduced here improve on conventional rankings in several ways. They are available for a much larger number of schools; they focus on the factors that best predict measurable economic outcomes; and they attempt to isolate the effect colleges themselves have on those outcomes, above and beyond what students’ backgrounds would predict.

Using the Internet to Promote Services Exports by Small- and Medium-Sized Enterprises

April 23, 2015 Comments off

Using the Internet to Promote Services Exports by Small- and Medium-Sized Enterprises (PDF)
Source: Brookings Institution

This paper discusses the importance of services exports for the U.S. economy. In this context, the paper analyzes how export promotion agencies (EPAs) can use the Internet to grow services exports by small- and medium-sized enterprises (SMEs).

The first part of this paper discusses how engaging in international trade benefits services SMEs and the U.S. economy. Part 2 provides an overview of the barriers faced by SME service firms in using the Internet to go global and analyzes the different ways that SMEs use the Internet, from reaching consumers globally, communicating with suppliers, to becoming part of global supply chains. Based on interviews and an online survey with export promotion agencies (EPAs) in the U.S. and select other countries, Part 3 describes how EPAs are engaging service SMEs and assisting them in using the Internet to become international traders. Part 4 draws on the experiences of EPA support for SME services exporters and recommends how to scale up some of these approaches in ways that would have a broader impact on SME services exports.1 The paper concludes with thoughts on future research.

Single black female BA seeks educated husband: Race, assortative mating and inequality

April 17, 2015 Comments off

Single black female BA seeks educated husband: Race, assortative mating and inequality
Source: Brookings Institution

There is a growing trend in the United States towards assortative mating — a clunky phrase that refers to people’s tendency to choose spouses with similar educational attainment. Rising numbers of college-educated women play a key role in this change. It is much easier for college graduates to find and marry each other when there are more equal numbers of each gender within an educational bracket.

Race is a factor in patterns of assortative mating. Black women face more difficult “marriage markets” than white women, given current rates of intermarriage according to work from University of Maryland sociologist Philip N. Cohen. Black women have the lowest rates of “marrying out” across race lines, in part because of racist attitudes to inter-marriage. Just 49 percent of college-educated black women marry a well-educated man (i.e., with at least some post-secondary education), compared to 84 percent of college-educated white women, according to an analysis of PSID data by Yale sociologist Vida Maralani.

Higher education and workforce policy: Creating more skilled workers (and jobs for them to fill)

April 9, 2015 Comments off

Higher education and workforce policy: Creating more skilled workers (and jobs for them to fill)
Source: Brookings Institution

Employment of Americans in middle-wage jobs has been declining, due to trends both in employer demand and worker skill attainment. Workforce development in the US now mostly occurs in community and forprofit colleges, as well as the lower-tier of 4-year colleges. Enrollment rates are high, even among the disadvantaged, but completion rates are very low and earnings are uneven for graduates. Community colleges lack not only resources but also incentives to respond to the job market (while the for-profit colleges need stronger regulation). Sectoral training and career pathway models show promise but need scaling and maintenance of quality, and employers also need greater incentives to participate and create more good jobs. Three sets of policies should help address these problems:

  1. Providing more resources to community (and lower-tier 4-year) colleges but also creating incentives and accountability by basing state subsidies on student completion rates and earnings of graduates;
  2. Expanding high-quality career and technical education plus work-based learning models like apprenticeship; and
  3. Assisting and incentivizing employers to create more good jobs. Other supportive policies—including higher minimum wages, paid parental leave, and labor law reform—would help as well. Together these proposals should create more good jobs and more good workers to fill them.

Ulysses goes to Washington: Political myopia and policy commitment devices

April 8, 2015 Comments off

Ulysses goes to Washington: Political myopia and policy commitment devices
Source: Brookings Institution

Political myopia—often in the form of the lightening quick pace of today’s electoral politics—can threaten the effectiveness of public policy, writes Richard Reeves, as such immediacy can replace long-term time horizons necessary to institute real governmental change.

Reeves asserts that one solution to political myopia lies in “the policy commitment device,” a relationship dynamic that commits policymakers to a longer-term perspective. Reeves utilizes the mythology of Ulysses, who ordered his sailors to tie him to the mast, so that he could hear the song of Sirens without steering his ship to the rocks. For a more modern-day understanding, look to how elected politicians have opted to hand the conduct of monetary policy to an independent central bank. And central banks are just one example of these policy commitment devices, intended to insulate certain areas of policy from immediate political pressure.

Reeves argues that a policy commitment device is a deeply political exercise, as politicians must willingly concede some power in the service of a long-term goal, without undermining the basic elements of representative democracy. There is also a danger of over-commitment: of binding policy too tightly to a particular goal or approach, at the cost of lost flexibility and accountability. But there is certainly scope for assessing the value of some of these new policy commitment devices. Finally, five candidates for such policy commitment devices to avoid political myopia are suggested and discussed in the paper:

  1. A national infrastructure bank
  2. an office of opportunity
  3. a federal minimum wage board
  4. a federal nuclear waste corporation;
  5. and a carbon tax.
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