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Around the web: The economics behind DACA, closing the baby gap, and more
Links and quotes for September 13, 2017
How financial incentives can reduce the baby gap — NBER
To assess whether earnings-dependent maternity leave positively impacts fertility and narrows the baby gap between high educated (high earning) and low educated (low earning) women, I exploit a major maternity leave benefit reform in Germany that considerably increases the financial incentives for higher educated and higher earning women to have a child. In particular, I use the large differential changes in maternity leave benefits across education and income groups to estimate the effects on fertility up to 5 years post reform. In addition to demonstrating an up to 22% increase in the fertility of tertiary educated versus low educated women, I find a positive, statistically significant effect of increased benefits on fertility, driven mainly by women at the middle and upper end of the education and income distributions. Overall, the results suggest that earnings-dependent maternity leave benefits, which compensate women commensurate with their opportunity cost of childbearing, could successfully reduce the fertility rate disparity related to mothers’ education and earnings.
Why the record number of job openings doesn’t necessarily mean the labor market is tight — WSJ
The future of AI depends on human teachers — Bloomberg
How ‘Dreamer’ migrants help the US economy — Michael Strain
The U.S. economy does not have a fixed number of jobs. Hundreds of thousands of DACA recipients — commonly called Dreamers — do hold jobs. They also buy food and clothing, pay for housing, and consume entertainment. Their spending is someone else’s income, supporting employment in their local communities — creating jobs. Their work makes the economic pie bigger. They don’t just take a slice.
Moreover, people covered under the program are not the lesser-skilled, low-wage immigrants that many are concerned drive down wages for native-born workers. Rather, according to Ike Brannon and Logan Albright in a study published in January by the libertarian Cato Institute, Dreamers closely resemble H-1B visa holders — foreign-born workers employed in specialty occupations requiring a high level of skill. The average DACA recipient earns $17 per hour, more than double the federal minimum wage, according to the Cato report. And many of them are pursuing advanced degrees.
Brannon and Albright estimate that Dreamers not only add several hundred billion dollars to the economy over a decade, but also generate billions of dollars of additional tax revenue. How? They pay more in taxes than they consume from government programs, in part because they are not eligible for means-tested federal benefits. All in all, Brannon and Albright estimate that over 10 years, “the United States economy would be poorer by more than a quarter of a trillion dollars” if the DACA program is repealed and its recipients deported.
What Bernie’s single-payer plan means, and what it doesn’t — Axios
Why the incentives for single-payer health care are all wrong — Tyler Cowen
National Review’s new Great Books podcast: Macbeth edition — NRO
Bill Kristol and Galston’s new center is refreshing, but unlikely to hold — Damon Linker