Immigrant Men Taking On Domestic Tasks

I liked this story about male Latin American immigrants learning to cook and clean that was in the Washington Post yesterday. As one person interviewed for the story put it, “Most of the Latino men come from a culture where they're used to having their wives or companions do everything around the house.” So when they get to the U.S. they have to call home for help with cooking or cleaning, or they forgo the cleaning and cooking and live in substandard conditions.

From the article it seems like some men may take some of these skills home when they return to their country, although others may revert back to their social culture norms.

The specialization of women in domestic duties is not uncommon in the US. I’m reminded of a time about 5 years ago when my wife and I were recently engaged, and my wife told a church friend of her’s that I did not like her to miss dinner. The church friend tried to give this carefully constructed set of advice that she should not continue to always take care of me, once we were married and I would have to learn to fend for myself sometimes. However, when my wife informed the friend that I did the cooking and I liked her home because in graduate school that was the only time we got to see each other during the week. The friend’s response after know the real reason was much more positive.

Taking this back to economics, in graduate school I worked with a model that examined how households allocate their time between income generating activities and household chores. If one person it more productive in household chores, then that person will use their time for that (me cooking or a latina house wife doing domestic chores), while the other person will use their time to generate income. Sometimes people will do a bit of both. Additional, time can be used for leisure. The difficult question is how does a household decide to allocate this time? Not only will it be based on ability, but also bargaining power between a husband and wife will determine how a household decides to distribute its time? It gets even more complicated when you consider things like cleaning, cooking, and child rearing generally benefit all household members.

Although anyone who has ever tried to figure out who cleans the bathroom knows these are complicated decisions.

Can Workers' Conditions Abroad Be Monitored?

Recently Robert Reich, Bill Clinton’s former labor secretary, was doing a Q&A on the Freakonomics blog, and he picked a question I submitted.

Q: As an econ professor and Democrat I’m still having trouble with the protectionist talk of the two candidates. Do you think Obama is handling trade issues properly or should he be more pro-free trade?
A: While it makes sense to argue in favor of labor and environmental standards in trade deals (so long as they’re on a sliding scale, and poorer nations don’t have to reach the same standard as richer nations), I don’t think the candidates should feed the current frenzy against free trade.

I think Reich’s answer is a good one. I agree there needs to be some sort of labor standards and at the very least people who purchase products in the U.S. need to able to figure out the labor standards under which the products were produced. I have not given much thought to international monitoring. However, I came across a good article written by a former factory inspector.* Not surprisingly it is a tough job, and factory owners work hard to hide poor conditions.

As the article’s writer says “Monitoring by itself is meaningless. It only works when the company that's commissioning it has a sincere interest in improving the situation.” If that is the case , then without some government intervention there will be not motivation for companies to monitor their abroad factories.
I’m not sure where the balance lies between labor and environmental trade standards, but it is important to have a view of the situation as a whole, and part of that is the difficulty of actually enforcing any law.


* I came across this article through Brijit, a new web service that summarizes articles for many publications in 100 words or less. H/t to Megan Macardle for pointing to this service as an idea generator for blogs.

What is Scott Adams Smoking at The Economics Party?

O.K. I was just going for a cool title, but Scott Adams, Dilbert’s creator, is talking about creating an economics political party, but I think he misses the mark on what economists agree on. This party idea was in response to recent debate on the gas tax. From his blog, Scott Adams suggestions for the party would be:

The Economics Party would ignore superstition in its decisions. Here are a few things I think would end up on the platform, assuming most leading economists agree:
- Withdraw from Iraq
- More aggressive energy policy (back off on ethanol)--
- More sane tax policies
- Limited government
- Legalize doctor assisted suicide
- Keep abortion legal
- Decriminalize marijuana
- Strong education policy

I’m not sure this is what economist actually agree on. Generally as Greg Mankiw summarizes a survey of American Economics Associate members, economists like free trade, don’t like agricultural subsidies, like immigration, think social security is going to run into trouble and we should raise the retiring age.

Only 62% are pro-legalizing marijuana. I’m unsure on economists views on abortion, suicide, and Iraq, but I’m guessing they largely fall in line with their political and not economic views.

Heck we can’t even agree on the minimum wage (38% think it should be higher, 47% think it should be eliminated). We do agree that economists are under paid and appreciated so next time you see one give them a hug.

POP for PPP: Tracking Beer Prices Around the World

Pintprice.com tracks beer prices around the world by letting people enter in the local price of pint. With entries on just about every country, and conversion to three kinds of dollars (US, Canada and Australia), Pounds, and Euros. So some of the data looks a little suspect (like where are the $2.50 beer is Washington DC)*, but overall a few lessons can be learned.

First, beer is cheapest in African countries. Can anyone confirm the sub $.50 pints for beer in Ethopia?

Second, beer is more expensive in out of the way place or expensive European countries. Also I think you should not drink beer in France on average $8 a pint, drink wine instead.

This project reminds me of the Big Mac index. This index created by the economist compares Big Mac prices in different countries to find the relative difference in prices and predict when exchange rates are out of whack. By comparing the prices of the same good in two places you can get an idea of purchasing power parity (PPP), which is the difference in prices between two countries. The reason the index works is that everywhere the Big Mac is two all beef patties, lettuce, cheese, special sauce, on a seaseme seed bun.** Could the price of a pint (POP) work for PPP, probably not since I don’t think Costa Rican ($1.32) beer is the same quality as a Czech ($1.89) beer (trust me I have done the research). That's apple and oranges or Bud and Budvar.


* actually cheap beer can be found at the Toledo Lounge in Adams Morgan
** except India, where it is made with chicken

200th Post: Thanks for Reading

I thought I would put up post #200 and take a little time to reflect. Starting with a post on Renters Insurance I have covered development, energy policy, college endowments, baseball, beer, travel, and numerous other topics.

I have been averaging over 20 posts a month, which means I’m hitting my nearly every weekday goal.

As for readership so far I have gotten 8,300 hits although some of those are from people looking for picture of the Big Lebowski. In the next year I hope to increase my readership, but on an average day I still have more readers then students I teach a semester.

A couple of ideas I’m working on is to figure a way to include the blog as part of my class (or at least make it an option of reading a few blogs). Also I would be interested in dual posting with other blog writers or trading guest posts on topics of mutual interest.

Posting may be a little slow as the semester winds down. But come a few weeks posting will pick up hopefully in quantity and quality.

If you have any econ questions you would like to see me discuss let me know.

I realize you have lots of choices for your blog reading and every time you read this post there is an opportunity cost. So I hope your utility outweighs that opportunity cost, but if you are an irrational reader I thank you anyways.

I’m not an Economist who supports a gas tax reduction, but one theory how it could help.

First I repeat I’m not an economist who supports Hillary Clinton and John McCain in their call to reduce the gas tax. I have covered the issue in a previous post, but I think my fellow economist should try to think outside the box. So here is one possible way that a gas tax could help give a boost to the US economy. I tried as a thought exercise to think of a scenario where I would support a gas tax removal.

First, I would bet that the average American would be able to tell you on a given day within 10 cents what is the current price of gas. That is because we see giant signs that advertise it. Next, it would not surprise me if many Americans based their feeling on how well the economy is doing on the price of gas. Recent works in behavioral economics suggest people use heuristics that is general sign to make judgments. If the price of gas were to go down (which it might not too much with the gas tax reduction), it might increase consumer confidence. If the government can use this policy faster than rebate checks, it might be a short term stimulus to consumer confidence and provide a little jolt to the economy.
Now this idea requires the following.

1.) People must be influenced by other economic decisions by changes in gas prices more than changes in other good prices. (maybe, but not unlikely if you talk to non-economists)

2.) Eliminating a gas tax would actually have to substantially decrease the price of gas.
This paper suggests that a 5% decrease in the Illinois tax led to a decrease in price of about 3% in 2000. I would guess supply is a little less responsive to price now so the drop would probably be lower.

3.) The increase in consumer confidence would have to be reasonably large to create a temporary surge in spending. (doubtful)

So my fellow economists, what evidence do we have about the relationship between gas prices and consumer confidence? I have looked and not found a lot. Gas prices may be related to other factors in the economy that also impact consumer confidence, so I’m wary of just comparing the two.

I think the possibility of this being true is 1/100(0?), but that is the best I can come up with.

I think the important lesson is that as economists we must try to continue to explain our thinking and hold our ground in the face of this…(clicking here is recomended)

But as Krugman suggests maybe its time to chill out.

Reverse Prostitution: Paying Tanzanians to keep STD Free

A new World Bank program is beginning in Tanzania to fight HIV/AIDs. The program will pay participants $45 if the test clean for sexually transmitted diseases, which is on average about 25% of some of the programs participants. (See article)

The idea is that if you incentivize having safe sex, HIV rates should down. However, testing for HIV is expensive. Also previous work by University of Chicago economist, Emily Oster, has shown that part of the reason for higher HIV infection rates in African countries is higher infection rates of herpes, which increase the likely hood of transmission.

Another good point of the program is that if a participant is found to have a STD they receive free treatment. As I pointed in a previous post about treating STD infections, spending $78 treating STDs is predicted to prevent 1 HIV case.

This program should help indentify STD infected people and may promote more safe sex. From the article it looks like the program will be tested as a randomized experiment. So in a few years we’ll have an idea of how well the program works.

h/t to marginal revolution