Working Hours & $20 Bills

There is an old economics joke: two economists are walking down the street. One spots a $20 bill lying on the ground and points it out to the other. “Can’t be real” says the second economist, “or someone would have picked it up already”.

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Matching by Algorithm

There was a great story in the NY Times about the craziness around taxi medallions in New York - the things that let you own a cab - and some of the trouble it got drivers into. The medallion system among NYC taxis put a sharp divide between those who drove taxis and who owned them, which lead to people making some bad decisions to get on the other side of that line, aided by intermediaries who were neither buyers or sellers, but profited off the transaction.  The ridehailing apps came along and basically removed the barrier, but the scheme was so shaky it was destined to fail. 

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Job Market Monopolies

Or to be precise, monosonys: where there is a dominant supplier that gains pricing power through lack of competition. Timothy Taylor has an excellent post looking at the economics and linking (as always) to some solid research on the matter. There are some pecularities in job markets that make employment more vulnerable to big, powerful employers than you would otherwise think. To re-quote, the core point around the difference from product markets is the bi-directional matching:

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Status and Joblessness

Eugene Wei’s excellent Status as a Service post rang a bell for me in terms of the puzzle of the jobless prime age men in the US. The difference from just unemployment is that the folks in the jobless cohort have opted out of even trying to get work. They’re most white and in mostly former manufacturing heavy areas. They score lower on optimism than their counterparts in most of the world, and interestingly even lower than US black and latino men in similar states (See Graham and Pinto’s recent work). They view their life as worse than their parents, and don’t expect it to get better.

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