Reference: https://repository.library.georgetown.edu/bitstream/handle/10822/1044006/Kucukonder_georgetown_0076M_13712.pdf?sequence=1
http://iop.harvard.edu/forum/men-without-work
Men Without Work
Nicholas Eberstadt
Henry Wendt Chair in Political Economy, American Enterprise Institute
Author, Men Without Work: America's Invisible Crisis
Jason Furman
Senior Fellow, Peterson Institute for International Economics
Chair, Council of Economic Advisers (2013-2017)
Lawrence H. Summers (Moderator)
Charles W. Eliot University Professor of Harvard University
Co-Director, Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School
Why is this happening? Eberstadt is sensibly eclectic in recognising a range of factors on both the supply and demand sides. His emphasis, though, is on the kinds of arguments that he and his AEI colleague Charles Murray have been making for many years in emphasising government benefit programmes and their effects on both incentives and mores. He is especially critical of disability insurance and sees the welfare reforms of the 1990s that introduced work tests into support programmes for mothers with dependent children as a model for what needs to be done.
My guess is that Eberstadt overstates the damage done by disability insurance and social insurance benefits more generally. I have been impressed by the data on applicants rejected for disability insurance. They are presumably more able to find work than those who get benefits. Yet most do not find work. It is also hard to believe that the US has unusually generous support for non-work relative to the rest of the world.
On the supply side, there are possible causal factors that Eberstadt does not closely consider. Increasing numbers of men owe child support and the government has become much better at collecting it. While enforcing child support is clearly social progress, it does impose a tax on earning income in above-board ways. There is also much more amusement to be had sitting on one’s couch than was the case in the days of no video games and only three TV stations.
More important, I believe Jared Bernstein and Henry Olsen, who have brief essays in Eberstadt’s volume, and the Obama administration’s Council of Economic Advisors, in a separate study, are right to emphasise the demand side and to identify diminution in attractive work opportunities as the key causal factor in explaining the rise of men’s labour force withdrawal. Technology and the rise of international competition are both reducing the demand for less skilled labour.
Evidence for the importance of demand factors comes from the decline in wages for less skilled workers, the long-lasting effects of recessions on the willingness to work, and the shift in the composition of the economy away from sectors such as manufacturing that heavily employ less skilled men. Of course, demand and supply interact. No doubt the availability of benefits and the reduction in any shame associated with not working when non-work becomes pervasive make it easier to settle into such a life.
Debates about demand versus supply factors will continue. However they are resolved, we are left with the fundamental question of what is to be done. Tight labour markets driven by aggressive macro policies and support for a dynamic private sector will surely help, and need to be a priority. And we need to work at transforming some of our social programmes from safety nets into springboards. In this area as in many others, we need to move from adopting the recommendations of neither liberals nor conservatives to adopting both sets of recommendations.
I am confident these steps would help. But they might well do no more than slow a trend that technology threatens to accelerate. Even if solutions are not clear at this point, Eberstadt has put his finger on what may be the most important socio-economic question the US will face over the next quarter-century. His book should spur much further research, debate and policy innovation.
http://www.washingtonpost.com/wp-dyn/content/article/2011/02/22/AR2011022200005.html
- Whites without a college degree; young & old males without a college degree
https://www.theatlantic.com/business/archive/2016/07/what-are-young-non-working-men-doing/492890/
- "Non-college whites" support Trump
Since 2000, the labor-force participation rate of young men without a college degree has declined more than any other age-and-gender group. Since the turn of the century, the participation rate of 16-to-24-year olds with just a high-school degree has fallen 10 points to about 70 percent; for those without even a high-school degree, it's fallen 20 points, to 30 percent. Some of this drop is attributable to rising college attendance. But not all of it. Nine percent of Americans between 20 and 24 are neither in school, work, or training.
https://bfi.uchicago.edu/news/scholar-profile/faculty-spotlight-erik-hurst
Your work on labor supply may be able to shed light on some major sociological shifts occurring within a specific group in our workforce. Can you elaborate?
In my third summer project, I’m trying to understand the labor market and patterns in employment over the last 15 years in the US. Specifically, I’m interested in employment rates of young (in their twenties), non-college educated men. In prior work on changes in demand for low-skilled labor, the theory exists that as technology advances, both employment and wages fall due to decreased demand.
In this strand of my research, I’m almost flipping that theory on its head by asking if it is possible that technology can also affect labor supply. In our culture, where we are constantly connected to technology, activities like playing Xbox, browsing social media, and Snapchatting with friends raise the attractiveness of leisure time. And so it goes that if leisure time is more enjoyable, and as prices for these technologies continue to drop, people may be less willing to work at any given wage. This explanation may help us understand why we see steep declines in employment while wages remain steady – a trend that has been puzzling economists.
Right now, I’m gathering facts about the possible mechanisms at play, beginning with a hard look at time-use by young men with less than a four-year degree. In the 2000s, employment rates for this group dropped sharply – more than in any other group. We have determined that, in general, they are not going back to school or switching careers, so what are they doing with their time? The hours that they are not working have been replaced almost one for one with leisure time. Seventy-five percent of this new leisure time falls into one category: video games. The average low-skilled, unemployed man in this group plays video games an average of 12, and sometimes upwards of 30 hours per week. This change marks a relatively major shift that makes me question its effect on their attachment to the labor market.
To answer that question, I researched what fraction of these unemployed gamers from 2000 were also idle the previous year. A staggering 22% - almost one quarter – of unemployed young men did not work the previous year either. These individuals are living with parents or relatives, and happiness surveys actually indicate that they are quite content compared to their peers, making it hard to argue that some sort of constraint, like they are miserable because they can’t find a job, is causing them to play video games. The obvious problem with this lifestyle occurs as they age and haven’t accumulated any skills or experience. As a 30- or 40-year old man getting married and needing to provide for a family, job options are extremely limited. This older group of lower-educated men seems to be much less happy than their cohorts.
I am currently working to document this phenomenon, but there is a real challenge in determining what the right policy response might be to address the underlying issues.
Labor's Love Lost: The Rise and Fall of the Working-Class Family in America
Andrew J. Cherlin
http://soc.jhu.edu/directory/andrew-j-cherlin/
Fracking Boom
Melissa Kearney
http://freakonomics.com/podcast/fracking-baby-boom-retreat-marriage/
LFP drop
Secular Stagnation on the Supply Side
Robert Gordon
Labor Force Participation: Recent Developments and Future Prospects
B Stevenson, J Wolfers - The Journal of Economic Perspectives, 2007
Marriage and divorce: changes and their driving forces
The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings
David Autor 2011
Trends in Marital Stability
Betsey Stevenson Justin Wolfers
Labor force participation: what has happened since the peak?
A story:
Nicholas Eberstadt
https://www.youtube.com/watch?v=1CbxAJtv8DI
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