Every Monday, the National Bureau of Economic Research, a nonprofit organization made up of some of North America’s most respected economists, releases its latest batch of working papers. The papers aren’t peer-reviewed, so their conclusions are preliminary (and occasionally flat-out wrong). But they offer an early peek into some of the research that will shape economic thinking in the years ahead. Here are a few of this week’s most interesting papers:
Authors: Derek Neal, Armin Rick
What they found: High rates of incarceration and low rates of employment meant that African-American men are no better off relative to whites than they were in 1970.
Why it matters: In a widely cited 1989 paper, economists James Smith and Finis Welch found that between 1940 and 1980, African-Americans made major gains relative to whites in education, occupational prestige and income. Since then, however, progress has stalled and may even have reversed, especially for men. Between 1970 and 2010, employment rates fell more than twice as much for black men as for white men; in 2010, the authors find, more than a third of black men ages 25 to 49 were either unemployed or not in the labor force. The authors attribute much of the decline in employment to high rates of incarceration, a trend that’s understated in official employment statistics because the Current Population Survey ignores people in prison or other institutions (such as nursing homes and mental hospitals). Incarceration rates increased for all groups, but because black men are much more likely to be imprisoned, the trend had a much larger impact on the black community.
Key quote: “On any given day in 2010, almost one in ten black men ages 20-39 were institutionalized, and rates of institutionalization were actually slightly higher among black men in 2000. Further, because turnover among prison populations is quite high, these results suggest that far more than ten percent of prime age black men will serve some time in prison or jail during a given calendar year. … While black men experience high rates of institutionalization overall, rates among less-educated black men have reached levels that were unthinkable prior to 1980. By 2010, the institutionalization rate among black, male high school dropouts ages 25-29 was almost one third and the employment rate for this group was less than one fourth.”
Data they used: Census data from 1960 to 2010 via the Integrated Public Use Microdata Series; National Corrections Reporting Program.
Authors: Scott Cunningham, Manisha Shah
What they found: Decriminalizing indoor prostitution reduces forcible rape and the spread of sexually transmitted diseases.
Why it matters: Experts have long debated whether legalizing prostitution would improve the well-being of sex workers by establishing minimum health and safety standards and by making it easier for prostitutes to go to the police if they are assaulted. But evaluating the effect of legalization is difficult because prostitution is illegal in most places, and the laws governing it change infrequently. In this paper, the authors take advantage of a 2003 Rhode Island court ruling that effectively decriminalized indoor prostitution from 2003 to 2009, when the state legislature recriminalized it. They find that decriminalization led to more prostitution, but that it led to a 31 percent decrease in reported rapes and a 39 percent decrease in cases of female gonorrhea. (All comparisons are versus model-based expectations of what the numbers would have been if prostitution had remained criminalized.) The declines came not just among sex workers, but in the population as a whole.
Key quote: “This study provides the first causal estimate of the impact of decriminalization on the sex market as well as outcomes related to sexual violence and public health. The results suggest that decriminalization could have potentially large social benefits for the population at large — not just sex market participants.”
Data they used: Weekly classified advertisements from the “adult services” section and restaurant advertisements from the Providence Phoenix; data on prostitutes and their transactions from a website called The Erotic Review; prostitution arrests and criminal offenses (including rape) from the Uniform Crime Reports; gonorrhea cases from the Centers for Disease Control and Prevention’s gonorrhea surveillance program,; sexual-behavior outcomes from the 1992 National Health and Social Life Survey; and state-level covariates from the Current Population Survey.
Title: “Unhappy Cities”
Authors: Edward L. Glaeser, Joshua D. Gottlieb, Oren Ziv
What they found: Residents of declining industrial cities are significantly less happy than the U.S. population as a whole, yet people continue to live and even to move to such areas, perhaps because of lower housing costs.
Why it matters: Economists are paying increasing attention to nonfinancial measures of well-being, such as happiness. Nationally, about 46 percent of Americans report being “very satisfied” with their lives, 49 percent report being “satisfied” and the rest report some level of dissatisfaction. But those numbers vary across cities, with declining cities — those with weak population and income growth — showing lower levels of happiness. For example, less than 36 percent of residents of Gary, Indiana, report being “very satisfied” with their lives. But it doesn’t appear that these cities’ economic decline is causing the unhappiness: These cities were also unhappy in the past, and recent arrivals are just as unhappy as long-term residents. The authors find that in past decades, places with lower levels of happiness tended to have higher average wages; more recently, less happy places have had lower average rents. Both trends suggest residents are in effect being compensated for their unhappiness.
Key quote: “Differences in happiness and subjective well-being across space weakly support the view that the desires for happiness and life satisfaction do not uniquely drive human ambitions. If we choose only that which maximized our happiness, then individuals would presumably move to happier places until the point where rising rents and congestion eliminated the joys of that locale. An alternative view is that humans are quite understandably willing to sacrifice both happiness and life satisfaction if the price is right. This viewpoint rationalizes the well-known tendency of parents to report lower levels of happiness and life satisfaction. Indeed, the residents of unhappier metropolitan areas today do receive higher real wages — presumably as compensation for their misery.”
Data they used: The Behavioral Risk Factor Surveillance System; the National Survey of Families and Households.