New paper: “Distributional effects of welfare reform for young adults: An unconditional quantile regression approach”

In the spring of 2015, after having submitted my phd thesis, I attended an applied microeconometics course at the University of Oslo given by Monique de Haan, Tarjei Havnes and Edwin Leuven. I have previously blogged about a paper using the synthetic control method that grew directly out of that course. Now a second paper originating in a presentation in that course has been published:  “Distributional effects of welfare reform for young adults: An unconditional quantile regression approach,” Labour Economics, Volume 65, August 2020. The article is open access.

In the quantile regression class, I presented the paper “Is universal child care leveling the playing field?” by Havnes og Mogstad (Journal of Public Economics, Volume 127, July 2015). That paper uses several non-linear differences-in-differences methods to study the distributional effects of child care. One of their applied methods was the unconditional quantile regression approach of Firpo, Fortin and Lemieux (2009). At the time, I was working on the topic of welfare reform in Norway, and I realized that I could apply the same method to that question. That started a journey that now, 5 years later, has resulted in a published paper.

In the paper, I analyze what happened to earnings when Norwegian municipalities increased their use of conditions for (primarily young) welfare recipients. Of the age group I analyze in the paper (26–30 year olds), 8% received welfare at some time in 1993, the first year of the analysis. Welfare policy affects both those actually receiving welfare as well as a wider population with only a potential connection to the welfare system. I do not know exactly who is impacted, but the fact that changes in welfare policy mainly affect people with a low earning potential suggests going beyond the mean impact and analyzing the effects on the distribution. It is likely that the relatively small average effects mask an effect of higher earnings among low earners and no effects among high earners.

What do I find? Substantial positive effects of increased use of conditions in parts of the lower end of the earnings distribution for women and no or small negative effects for men. For women, earnings at the 20th percentile increase by around 25 percent, or € 2000 per year. As expected, there are no effects in the upper part of the distribution. Below is the key graph:

Fig. 3. Main quantile treatment effect estimates on earnings, 26–30 year olds.

Further, I find that although welfare payments decline, the effect on total income for women is also positive, indicating that they were able to find gainful employment that, overall, improved their financial circumstances.

I conclude that it is important to mention that the reform occurred in a beneficial environment, which may help to explain the good results. First, the reforming municipalities were responsible for undertaking and implementing the changes and therefore likely had a large degree of ownership of the reform and a strategy for implementing it. This may be hard to replicate in the case of changes mandated from a higher authority. Second, the social insurance offices had a large degree of discretion in deciding who should face conditions and what to demand of them. This may be beneficial compared to uniform requirements if caseworkers have relevant information about how to adapt the conditionality policy. Nevertheless, the policy represents a promising avenue to explore for other countries in need of social insurance system reform.

Monthly book roundup – 2020 January

Books finished in January:
(Warning: reviews are unpolished and quickly written.)

The Basque History of the World (1999) by Mark Kurlansky. Started the book because of a friend living temporarily in the Basque Country. Interesting how the Basque how preserved a distinct own culture for so long. I would guess at the cost of a lot of internal norms/pressure. A high degree of religiousness. Lost interest after a while. Did not finish.

Open: An Autobiography (2009) by Andre Agassi. Grew up with a tennis-obsessed father and a lot of pressure. Became a prodigy, but did not have it easy. Reacted by rebelling against some of the structures, understandably. From the book seems to have calmed down as time passed, but hard to judge only from his own words. Agassi is open about his life, as the title promises, and I enjoyed the book despite not following tennis. A little long for my taste. Recommended.

Ratings and previous books are in the library.

Monthly book roundup – 2019 December

Books finished in December:
(Warning: reviews are unpolished and quickly written.)

Fifty Inventions That Shaped the Modern Economy (2017) by Tim Harford. Great pop history, as always from Harford.

1 The Plough – huge consequences, agriculture became more efficient, more people could be fed and cities could form.

I. Winners and Losers
2 Gramophone. Winners take all. Bowie’s prediction in XX that music would become like running water or electricity much correct.
3 Barbed Wire. Helped enable settling the West in the US, good for settlers, not for Indians. Locke’s argument that labor working land made the worked land property, (Indians had not “improved” the land) a factor, but I guess did not make a practical difference.
4 Seller Feedback
5 Google Search
6 Passports
7 Robots
8 The Welfare State. Liberated women and others.

II. Reinventing How We Live
9 Infant Formula
10 TV Dinners. Liberated women? From having to make the dinners.
11 The Pill. Liberated women more, though the effects maybe a little overstated in the book?
12 Video Games. Debatable whether labor supply actually impacted.
13 Market Research
14 Air Conditioning
15 Department Stores. Liberated women?

III. Inventing New Systems
16 The Dynamo
17 The Shipping Container. Made global trade much more efficient.
18 The Barcode
19 The Cold Chain. Fruits, vegetables, meat and other easily spoilable good could be traded and specialized in worldwide.
20 Tradable Debt and the Tally Stick
21 Billy Bookcase
22 Elevator

IV. Ideas About Ideas
23 Cuneiform
24 Public-Key Cryptography
25 Double-Entry Bookkeeping
26 Limited Liability Companies
27 Management Consulting
28 Intellectual Property
29 The Compiler

V. Where Do Inventions Come From
30 The iPhone
31 Diesel Engines
32 Clocks
33 The Haber-Bosch Process-high pressure combination of nitrogen and hydrogen -> ammonium. Haber contributed to feeding people through fertilizer and killing them through chemical weapons and did not support the career of his talented wife, who killed herself 14 years into their marriage.
34 Radar
35 Batteries
36 Plastic

VI. The Visible Hand
37 The Bank
38 Razors and Blades
39 Tax Havens
40 Leaded Petrol
41 Antibiotics in Farming
42 M-Pesa
43 Property Registers

VII. Inventing the Wheel
44 Paper
45 Index Funds
46 The S-bend
47 Paper Money
48 Concrete
49 Insurance
50 Lightbulb

Ratings and previous books are in the library.

Monthly book roundup – 2019 August

Books finished in August:
(Warning: reviews are unpolished and quickly written.)

Any Ordinary Day: Blindsides, Resilience and What Happens After the Worst Day of Your Life (2018) by Leigh Sales. Stories about how people deal with bad things happening in their lives, typically the disease/death/near death of someone close to them or themselves. Most people get over it some way or another. Read because of some related work I have done on post-traumatic growth (as opposed to stress). Ok.

Ratings and previous books are in the library.

Monthly book roundup – 2019 July

Books finished in July:
(Warning: reviews are unpolished and quickly written.)

A Boy in the Water: A Memoir (2018) by Tom Gregory. Tom Gregory in 1988 became the youngest person ever to swim the English channel, at 11 years and 330 days, swimming it in 11 hours and 54 minutes. The book documents his close relationship with his old-fashioned, demanding, warm-in-his-way coach John Bullet and the training leading up to the crossing. Recommended.

Range: Why Generalists Triumph in a Specialized World (2019) by David Epstein. A super interesting book. In contrast to people who claim that early specialization is the key to success, Epstein argues for breadth, or range. Having previously written on sports, he starts off noting that even there, late specialization is more common than early and the best ones have often practiced many different sports when young. Though it is not clear to me that much of this is not just due to some people being talented at many sports or unusually engaged in sports. The evidence that late specialization is better also in other domains sounds more convincing, e.g. later specializers finding better fit for skills and personality and thereby catching up earningswise to early specializers (based on research by Ofer Malamud analyzing variation in the timing of specialization in college brought about by differences in the school systems in England and Wales and Scotland). People switch to better fit and bring experience. Also, a head start in closed skills does not matter in the long run gains of early childhood interventions tend to fade out (Duncan et al.). Early sampling is the key. In general, the fact that child prodigies and savants do not tend to dominate most arenas should also be taken as indications that early specialization and practicing the most are not necessarily the best path to success.

Contrasts the Roger (Federer-late specializer) vs. Tiger (Woods-early specializer) models to stardom. Both may work, but an important complimentary factor is the environment. Epstein follows the psychologist Robin Hogarth’s differentiation between “kind” and “wicked” learning environments. In kind environments, “patterns repeat over and over, and feedback is extremely accurate and usually very rapid,” while “In wicked domains, the rules of the game are often unclear or incomplete, there may not be repetitive patterns and they may not be obvious, and feedback is often delayed, inaccurate, or both (pp. 20-21).” Golf and chess provide quite kind environments, whereas dynamic ballgames, such as tennis and football, and indeed most sports, are much more wicked. (Side note, Tiger’s father claims that early specialization in their instance was also child driven.) E.g., repetitions allow chess players to learn to “chunk” groups of pieces on a chess board together, something that accounts for their seemingly superhuman ability to remember whole chess boards quickly and accurately. This is also related to the failure of IBM’s Watson to live up to the hype that it would solve cancer–oncology is a wicked domain full of open-ended questions, while kind Jeopardy has much more structure, data and rules and the answers are known. The psychologist Daniel Kahneman expressed it as domains in which one could find robust, statistical regularities vs. others.

Many high achievers also have other interests than their specialty. That is interesting, though quite anecdotal. Epstein thinks that the benefits of specialization are greatly exaggerated even in music. Many greats played many instruments and not only their first one.
Higher education is another arena of increasingly early specialization. James Flynn is one that has attacked this and who thinks critical thinking should be taught more. Fermi questions might be a good way to practice–somewhat far-fetched questions without a clear answer that one needs to make assumptions and try to attempt to answer.

There are also some tips for one’s own learning to be had in the book: Hing-giving when practicing is counterproductive, better to try oneself and maybe make a mistake. Though this is different with motor skills, where good form/technique can be important to learn well from the start. Spacing and distributed practice and interleaving good for retaining knowledge. Mixed practice better than block practice (same type of questions together).

The book becomes more and more anecdotal towards the end. Epstein praises the “outside” view as a way to obtain realism. E.g. with infrastructure projects. This seems a little romanticized–most problems are solved by insiders and most outsiders are not like Kepler inventing astrophysics. Breadth is supposed to be good in comics, surgery and flights are kind environments. Elsewhere, we must beware of becoming so attached to our tools that we do not abandon them even whey they hinder us, like firefighters dying running from fires while still holding on to heavy tools. Tetlock’s forecasting studies supports being a generalist is good. Dan Kahan thinks experts cherry pick details that fit their all-encompassing theories.


Ratings and previous books are in the library.

Weekly hours of television and internet consumption in Norway 1991-2018

A couple of days ago, I blogged about time spent watching television and video by different age groups in Norway. Of course the issue of internet immediately popped up, so I made this graph showing both time spent watching television and time spent on the internet:

With regards to total screen time, note that these graphs leave out time spent watching video tapes and dvds and time spent on computers, electronic games and mobile phones without using the internet.

Time spent watching TV and video media in Norway 1991-2018

Inspired by a tweet by Gray Kimbrough graphing changes in television and video watching in the US between the mid-2000s and the mid-2010s for various age groups, I decided to follow up with a similar figure with Norwegian data. Gray showed that in the US, people aged 45 and older increased their watching substantially, while younger people decreased it at least to some extent. In Norway the picture was somewhat different – there was very little change for the oldest groups, but the youngest ones reduced their watching by much more than in the US.

Part of the reason for making the graph was to learn how to use the pcarrow option in Stata, which I accomplished, however, I found that in this case with only five groups, a simple line chart may actually provide more information and be preferable:

Monthly book roundup – 2019 May

Books finished in May:
(Warning: reviews are unpolished and quickly written.)

Why We Fight: One Man’s Search for Meaning Inside the Ring (2019) by Josh Rosenblatt. Another book by an intellectual type that finds himself drawn to fighting, takes up mma and writes a book about it. The book had been better had the author been less pompous and self-important, but it does manage to tell his story, which is valuable and may be inspiring to others, even if not unique. Recommended.

Fairyland (2016) by Paul McAuley. Near future science fiction about genetic engineering and nanotechnology. Despite the promising setting and topic and strong recommendations, this is the second McAuley book I have given up on. Not sure why, I just seem to lose the thread, maybe it is the writing style that is too complicated or otherwise not suitable for me.

Ratings and previous books are in the library.

Monthly book roundup – 2019 April

Books finished in April:
(Warning: reviews are unpolished and quickly written.)

Exit West: A Novel (2017) by Mohsin Hamid. We follow the conventional Saeed and the rebellious Nadia as they become a couple, experience civil war break out in their country and eventually flee abroad through “magical doors”. Their country is never named and is probably intended to function as any country with these experiences, but it is easy to think of Syria. I was sceptical of the magical aspects, but the magical doors seem just to be a metaphor for escaping and getting refugee status in a rich country, which Nadia and Saeed are able to obtain. In London, and later in California, they try to make a new life for themselves, not without challenges. There is no high politics in the book, only the everyday experiences of Nadia and Saeed. This works well and gives a (short) impression of the lives of the thousands of refugees in the Western world today. Recommended.

The Art of Learning: An Inner Journey to Optimal Performance (2014) by Jack Waitzkin. Josh Waitzkin is something as unusual as a (former) elite chess player and a world champion in a (no-bullshit) martial art. In this book, he tells about his strategies for learning and dealing with challenges in these endeavors. Waitzkin’s story is interesting in itself and many will probably take away some things they can use for themselves. He thinks focusing on chess openings in an early learning stage leads to an unhealthy focus on simply winning as opposed to learning and mastering the game and that it is better to learn the endgame first. At one stage, he was distracted by noise, etc, but then learnt to play with them and practiced with loud music. Interval training good to improve recovery from exertions and release tension. Has a fairly detailed exposition of how he worked with a guy, “Dennis”, working in finance to develop a “hot button” for focus: First, combine a cue with good feelings with something one has been in the desired state when doing, combine several times to strengthen, then use as trigger for focus at work or in other arenas. First long routine, then shorten gradually. Learnt to ignore emotions, then to use them. Use temporary setback, e.g. injury, to develop other, perhaps surprising areas. Many of Waitzkin’s strategies are nothing new, but he also does not present them as revolutionary, what is interesting is how he has applied them to perform at high levels. And, as mentioned, his story is interesting in itself. At the end, I learnt that he is also a black belt in Brazilian jiu-jitsu, further strengthening his credibility. Recommended.

Ratings and previous books are in the library.

Monthly book roundup – 2019 March

Books finished in March:
(Warning: reviews are unpolished and quickly written.)

Educated: A Memoir (2018) by Tara Westover. Tara Westover (b.1986) grew up in a survivalist mormon household in Idaho. She did not go to school as a child because her father was opposed to much of the outside society, even most other mormons. The family also did not go to doctors or hospitals or used other government services, relying instead on the mother’s herbs and homeopathic medicine. Tara’s father and eldest brother have mental health issues and are increasingly abusive. At 17, Tara manages to attend university, which, with many ups and downs, she greatly benefits from and likes. Mental problems are the real problem in the family, but they are allowed to be som because of their religiosity, which insulates them and prevents them from getting help, either from professionals or even the mormon society. The book is so perfectly dramatic and well told that it is sometimes too good to be true. Highly recommended.

The Last Days of August (2019) by Jon Ronson. Sad story about the suicide of porn actress August Ames. Mental health problems in various forms. Jon Ronson always readable.

The Revolt of The Public and the Crisis of Authority in the New Millennium (2018) by Martin Gurri. A story of how increased availability and spread of information, through social media, blogs and other internet media, is changing the world, leading to a “slow-motion collision of two modes of organizing life: one hierarchical, industrial, and top-down, the other networked, egalitarian, bottom-up.” The first part of the book is good, documenting the above view by going through events such as the Arab spring, Occupy Wall Street, various European protests, in particular in Spain and Italy. Many of these are protests and revolts against the establishment (governments, old media, experts) without a clear program of their own. Indeed often seeming to protest anything. Gurri is afraid of the “nihilism” implied by this. However, shallower analysis later on, e.g. simplistically about whether the US stimulus money “worked” or not, though it is true that the economy is complex and not as predictable as many believe, and repeated, vitriolic attacks on Obama (“sectarian prophet”). Some interesting threads drawn also to Trump, Tsipras and Macron, promising to drain the swamp and being elected on discontent. Not recommended, despite strong recommendation from Noah Smith.

Et fritt liv (2018) av Simen Tveitereid. Selvbiografisk fra Simen Tveitereid om hvordan han og kone og barn flytter fra Oslo og overtar familiens småbruk på sørlandskysten. Der jobber han delvis fortsatt som skribent og delvis som småbruker og er veldig fornøyd med at han får vært mer ute i naturen og holdt på mer med praktiske prosjekter. Jeg liker påminnelser om slike muligheter og erfaringer, men for meg blir det mer interessant mot slutten av boka, når tvilen om hvorvidt valget er det riktige kommer fram, sammen med vurderingene om alt det middelmådige og ineffektive han driver med. Forfedre på gården spilte f eks gjerne på lag med teknologien. Allikevel, anbefales.

Ratings and previous books are in the library.