Archive for the ‘Unemployment’ Category

Recently, I found this interesting video in which William F. Buckley and Nobel laureate Milton Friedman discuss the idea of a negative income tax:

In a period of unprecedented prosperity and affluence the number of the people on welfare is skyrocketing. Why?

Because once they get on, we make it almost impossible for them to get off.


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For the National Review Online, James C. Capretta takes a look at President Obama’s economic policies as well as his plans for a second term:

The President’s Incoherent Economic ‘Philosophy’

The federal government has steadily become more and more involved in elementary and secondary education since 1965. There’s not a shred of evidence that it has helped raise educational performance by students. On the contrary, the steady encroachment of federal regulations and spending in education has coincided with an erosion of the nation’s standing relative to that of our peers around the world.

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The other day, Justin Wolfers posted an interesting figure on the returns to education:

Employment and earnings by education level

What would happen if we put this poster in every classroom?

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High unemployment rates are top of the agenda for policymakers in most Western countries these days. At the same time, the German labor market is doing surprisingly well. Many have called the relatively low and even declining unemployment rate a job miracle.

Unemployment rates in various countries // source:

In a recent article for VoxEU, Michael Burda (HU Berlin) and Jennifer Hunt (Rutgers) discuss the low unemployment rate in Germany and provide a much more subtle explanation:

The German labour-market miracle 

The extraordinary performance of the German labour market in 2008–2009 can most clearly be tied to a possibly one-off event with less favourable social welfare implications. In other words, firms had less need to lay off than in a typical recession, because an unusual lack of confidence in the preceding boom had made them reticent to hire.

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Daniel Mitchell from the Cato Institute provides a good example of how to abuse statistics:

Obama’s Failure on Jobs: Four Damning Charts

President Obama may have a buddy-buddy relationship with big labor, but he’s no friend to ordinary workers.

Sure, his first figure beautifully shows the tremedous failure of Obama’s stimulus plan. But with regards to the other three, Mitchell simply ignores that America’s economy benefited from a false boom during the Bush presidency. To a large extent, Obama simply inherited the mess. Unfortunately, however, he has done more to worsen rather than to improve the situation.

But criticizing him with shady statistics is certainly not the way to handle this. Instead, I would first recommend rereading Gary King’s two brilliant articles (1986, 2008).

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