Economist Jesse Rothstein has published a working paper supported by the Foundation's Great Recession initiative. Entitled "The Labor Market Four Years Into the Crisis: Assessing Structural Explanations," the report seeks to understand why unemployment has remained so high in America since the economic crisis. As he states in the paper, economists offer two possible explanations:
One camp, of which Paul Krugman is perhaps the most prominent member (see also Romer 2011), argues that recent poor outcomes are primarily reflective of a shortfall of aggregate demand. This camp prescribes aggressively stimulative monetary policy – which would have to take unconventional forms, as the federal funds rate has been at or near its zero lower bound since late 2008 – and additional fiscal stimulus to raise effective demand.But after reviewing the evidence, Rothstein argues there is little evidence for the structural hypothesis:A second camp points to “structural” factors as important impediments to labor market recovery. This diagnosis comes in several flavors. Some focus on mismatch between the types of labor supplied by workers and the types demanded by employers. As Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis, described it in a 2010 speech, “Firms have jobs, but can’t find appropriate workers. The workers want to work, but can’t find appropriate jobs. There are many possible sources of mismatch—geography, skills, demography—and they are probably all at work” (Kocherlakota 2010).
In the second installment of our Election 2012 series, economist David Neumark discusses President Obama's proposal to increase funding for community colleges. Read more of his research on education and labor policy in his RSF book Improving School-to-Work Transitions.
One component of President Obama’s efforts to increase educational levels of the workforce is increased support for community colleges. Research points to the potential value of community colleges in helping young people make successful school-to-work transitions, in part by highlighting the links between what community colleges offer and the needs of the labor market, and how community colleges are able to respond to these needs. Community colleges can perform an important function in adult education, which can help meet the challenges of an aging population by enabling older workers to retool and remain productive at work.
A volume I edited based on a conference supported by the Russell Sage Foundation (Neumark, 2007) explored a number of policies and programs to improve the school-to-work transition, at both the high school and college level. The high school-level policies include activities supported under the School-to-Work Opportunities Act of 1994 and Career Academies. Career and Technical Education programs span high schools and community colleges. And the post-high school manifestation of school-to-work is community colleges. There is longitudinal evidence that high school programs boosted subsequent employment or the accumulation of skills. And the most compelling evidence of positive impacts comes from an experimental evaluation of the Career Academy model (Kemple, 2008).
COMMUNITY COLLEGES AND EMPLOYMENT
What about community colleges? In support of the President’s efforts, the White House argues that “Community Colleges are particularly important for students who are older, working, or need remedial classes. Community colleges work with businesses, industry and government to create tailored training programs to meet economic needs like nursing, health information technology, advanced manufacturing, and green jobs."
The research record is supportive of this claim on both counts.
As we discussed in this post, the Russell Sage Foundation played an instrumental role in the development of behavioral economics. Readers looking for a quick introduction to the discipline can find a series of articles below from the field's leading scholars. As with our reading list on inequality and mobility, this list is not meant to be exhaustive; users looking for more advanced research should see these reading lists, as well as the Foundation's behavioral economics program page, which lists our current research initiatives.
GENERAL INTRODUCTION
"A Short Course in Behavioral Economics." The Edge.org. October 1 2008. Web. March 23 2012.
Camerer, Colin. 1999. "Behavioral economics: Reunifying psychology and economics." Proceedings of the National Academy of Sciences 96 (19): 10575-10577.
Kahneman, Daniel. 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics." American Economic Review 93 (5): 1449-1475. (PDF)
Laibson, David and Richard Zeckhauser. 1998. "Amos Tversky and the Ascent of Behavioral Economics." Journal of Risk and Uncertainty 16 (7): 7-47. (PDF)
Lambert, Craig. 2006. "The Marketplace of Perceptions." Harvard Magazine. Online. March 23, 2012.
Mullainathan, Sendhil and Richard Thaler. 2000. "Behavioral Economics." MIT Working Paper 00-27.
Rabin, Matthew. 1998. "Psychology and Economics." Journal of Economic Literature 36 (1): 11-46. (PDF)
Rabin, Matthew. 2002. "A Perspective on Psychology and Economics." U.C. Berkeley Working Paper E02-313.
Thaler, Richard and Cass Sunstein. Nudge: Improving Decisions about Health, Wealth and Happiness. New Haven: Yale University Press, 2008.
The Foundation's U.S. 2010 Census project has released a new report on home ownership in America between 2001-2011. Here are some of the report's main findings:
• Between 2001 and 2011, the overall home ownership rate dropped by one percentage point. However, this small net change masks a general rise in ownership that peaked in 2005 and fell after that. For certain kinds of households – the least-educated, poorest, and non-Hispanic black households – the first half of the decade brought little, if any, growth while the second half of the decade resulted in devastatingly large losses. As a result, the gaps in ownership separating black from white households and households at the top and bottom of the education and income distributions widened considerably in this decade.• The housing market collapse and ensuing Great Recession during the second half of the last decade also had a disproportionate impact on young adults, who typically begin the transition to home ownership in their late twenties and early thirties. In particular, Generation X (ages 25-34 in 2001) had the misfortune to pass a life-course stage typified by steep inclines in ownership during a period when becoming and remaining a homeowner was fragile. Generation Y (ages 25-34 in 2011), the most recent cohort to launch its housing career, is likely to fare even worse, as it faces numerous obstacles to entering the ownership market. Absent a dramatic shift in the economy and the housing market, the stalled progress of these cohorts threatens to have a permanent impact.
As Republican voters in Illinois head to the polls, we're pleased to announce a new feature on RSF Review: the Election 2012 series. Through the campaign season, we hope to add insights, data and commentary from our scholars and research programs to the political conversation. In our first installment, RSF Visiting Scholar Delia Baldassarri discusses the conventional wisdom about political polarization in the United States—and why it may be wrong.
Q: Although it is widely assumed that public opinion in America has sharply polarized over the past 40 years, your analysis of the evidence and scholarly literature suggests a more nuanced conclusion. What does the research show?
A: Over the last four decades, and especially starting in the 1990s, public opinion increasingly divided on a few specific issues, such as abortion, gay rights and the war in Iraq, while we observe relative stability and even depolarization on all remaining economic, civil rights, social, and foreign policy issues. Indeed, Americans are actually less divided in their opinion on the role of women in society, racial integration, and criminality than they were forty years ago. As new generations replace old ones, and women achieve higher positions in society, the collective mood shifts accordingly.
However, there is clear evidence of polarization among political partisans: those who are politically active, who identify with a party or strongly identify as liberal or conservative, tend to have more extreme positions than the rest of the population. In sum, while the distribution of opinions across the population has not changed a lot, with the exception of a few ‘hot-button’ issues, Republicans and Democrats are significantly more divided on a wide range of issues. This is a process of partisan alignment, which is partly consequence of the increased polarization of the parties, Congress, and political activists: since parties are more polarized, they are now better at sorting individuals along ideological lines.
A verdict has been reached in the Dharun Ravi trial. The ex-Rutgers student faced a series of charges, including bias intimidation and invasion of privacy, after he used a webcam to watch his college roommate Tyler Clementi kissing a man. The incident drew international attention after Clementi killed himself, raising difficult questions about homophobia, bullying, and the level of tolerance and diversity in American colleges. This week, we spoke with RSF Visiting Scholar Elizabeth Paluck about the Ravi trial and its implications. Paluck, a social psychologist at Princeton, studies prejudice and intergroup conflict reduction and has used large-scale field experiments to test theoretically driven interventions.
Q: A large part of the Dharun Ravi trial centered on the intentions and actions of Tyler Clementi’s peers—what they thought about his homosexuality, what they said to him and others about it and how they acted around him. What do we know about the importance of peer influence on prejudice and attitudes in school settings?
A: We think that peers have a strong influence, especially because much of the behavior that we care about unfolds in situations that are dominated by peers. Peers exert their influence by setting a standard, through their own behavior or expressions of belief, about what is appropriate and typical to do in that situation. In my field, that is what we call a social norm--a perception of what is appropriate and typical to do in the situation. Sometimes these peer-based social norms are so pervasive across situations that students internalize them as private attitudes. But the powerful thing about peer influence is that it can exert a pressure on students to behave in ways that they normally would not, or that go against the student's private attitudes.
Students report in surveys that they believe if they stand up against prejudice or bias then their peers will not like them as much. Other research shows that they are right! In those studies, students who object to teasing and harassment lose a bit of face, of their reputation, and are liked a little bit less. This is not to say that being an active bystander is a lost cause. Students have ways of shooting down prejudice or bias that can preserve their reputation, and in fact many of them do this every day, by supporting the target of harassment, or calming down someone who is doing the harassment. Many programs that urge students to stand up, speak out, are a bit less sensitive to this fact than they should be. Students can have a major positive influence on one another, and I think they have some great strategies for doing this in a sustainable way.
Q: In a 2011 paper, you looked at whether tolerance could be spread through student leaders who were trained confront expressions of prejudice. Give us a snapshot of some of the major findings and their implications for combating bullying.
The annual SXSW Festival was marred by controversy this week when a marketing company affixed wireless routers to homeless people to provide internet access to festival-goers. Critics said the plan—labeled a "charitable innovation experiment" by organizers—exploited the homeless and dehumanized them. Deplorable as the plan sounds, there is a deeper problem in the way people tend to perceive the homeless. As Nathan Hefleck of Psychology Today reports, neurological research conducted by RSF author Susan Fiske and other social psychologists has shown that people often view social "out-groups" as less than human:
[An] area of the brain called the Medial Prefrontal Cortex (mPFC) activates when people do things that involve perceiving and relating to other people, such as recognizing and distinguishing between faces and empathizing. These researchers hypothesized, however, that like objects such as tables, images of certain groups of people—the homeless—would fail to activate the mPFC.This is exactly what they found. Images of all other groups besides the homeless activated the mPFC. This suggests that the homeless are not recognized as human relative to other groups. They actually are perceived, at least in this area of the brain, more like objects, such as tables.
Fiske elaborated on this finding in an interview with RSF Review last year:
Scorn is simply not paying attention and wishing the other away. Groups are scorned especially if they are low-status and not-us, such as homeless people and drug addicts. Poor people (regardless of ethnicity) and Latino immigrants are also seen this way. Scorn dehumanizes them and makes us neglect them.
What does it mean to 'dehumanize,' or perceive someone as less than human? In her RSF book Envy Up, Scorn Down, Fiske explained:
An article released by Social Forces indicates that voter identification requirements have a substantially negative impact on the voting of all groups except for Asians. Particularly strong negative effects are seen for Blacks and Hispanics: a decrease in voting by 18 percent and 22 percent respectively. Even Whites show dampened turnout associated with voter ID policies. Yet for Asians, strikingly, voter ID has the opposite effect, boosting turnout by nearly 30 percent. This is an intriguing instance in which Asian participation patterns markedly differ from that of other groups.
The authors of the article, Brown University Professor of Sociology, John R. Logan, Jennifer Darrah and Sookhee Oh, use national survey data in federal election years from 1996 through 2004 for this study to examine voter registration and voting. It shows that racial/ethnic disparities in socio-economic resources and rootedness in the community do not explain overall group differences in electoral participation. It contradicts the expectation from an assimilation perspective that low levels of Latino participation are partly attributable to the large share of immigrants among Latinos. In fact net differences show higher average Latino participation than previously reported. This research was sponsored by the Russell Sage Foundation.