Labor Economics is the BEST
Sharks!
It's a beautiful Saturday morning, and I'm covered in dirt. My neighbor needed help putting grass on his property. He had at least 30,000 lbs (13,600 kg) of grass that had to be installed. So I was there, early Saturday morning, helping.
But I wasn't the only one helping. We had men from all over the neighborhood covered in sweat and dirt helping. None of us were paid: we were just helping a friend.
That evening, we had a neighborhood party. About 150-200 of us gathered at the park around the corner, shared food, and listened to a live band.
This neighborhood is unique relative to our last two. We enjoyed our homes in California and Connecticut, but we hardly knew our neighbors. In Connecticut, where we lived for five years, we at least knew some of the neighbors. But in California we rarely saw anyone. Here in Utah, I can name every neighbor on our street, the next street, and a few more after that.
If you don't know Utah, it's a state where many of the residents belong to the same church. It's that way in our neighborhood. Indeed, on Sunday I saw these same neighbors at our worship service.
I bring this up because it made me think of social capital. Social capital is understudied in economics. We look at human capital, your education and skills, and physical capital, the structures and machines. But connection between people are also important.
Look around your neighborhood. How well do you know your neighbors? If you need it, would you feel comfortable asking them for help? Would they sacrifice a Saturday morning to help your family? If you had a mental health breakdown, do you have friends who would rush to your assistance?
You are probably focused on developing your human capital. But remember that developing social capital is just as important. Joining a social organization is a good way to improve it. Maybe church works for you like it does for me. I have a friend who developed impressive social capital playing Magic: The Gathering. Experiment! Get out there and invest in yourself and your community.
Labor Economics is the Best!
On the topic of human capital, today's video is on labor economics! Many people mentioned that they enjoy labor economics most, and I explain why. I also present some interesting employment data that will encourage anyone hoping to become a labor economist.
Regular readers will know that this part of a series on the fields of economics. It started with ranking the fields of economics in a tier list. Now I'm going in depth on each field. So far I've done development economics, behavioral economics, and economic history. And I explained why I chose my fields of economics. I have some ideas on what to do next, but let me know which fields you're most interested in and I'll see if I can put them in the schedule.
Labor Shortage Update
Speaking about labor economics, last week’s video focused on the labor shortage. I mentioned three causes: pandemic concerns, childcare concerns, and unemployment insurance. Well, in the last week we have a little bit of clarity on one of these causes.
Some economists decided to explore how much childcare concerns could be contributing. Instead of surveying individuals or hunting down the nearly impossible data that would be needed to directly answer this question, they took a clever route. They just looked at labor force participation rates for parents and compared them to non-parents.
They concluded that childcare concerns could NOT be a major concern. Why? First, mothers are such a small fraction of the labor force that a decrease in their participation rates has a small impact on the market. Second, fathers actually have higher labor force participation rates than non-parents. The problem is mostly among households without young children. Seems like childcare can’t be a major problem.
This makes sense to me. People were blaming remote schooling and the need to be home with kids, but we’re now entering the summer holidays. Every year parents have to figure out how to care for kids outside of school. Unless other options are shut down (which I know some are, but most are reopening) childcare just couldn't be the main cause.
Moreover, I think this article is a good example for aspiring economists. It’s a pretty basic analysis, and a lot of economics professors would overlook this because they would think it’s not that interesting to examine. But
Property Rights and Sharks!
Hopefully you know about CGP Grey. If not, then today is a great day for you. Because he has so many videos for you to watch.
Yesterday he released a great story of a property rights battle. He explores the mystery of a statue called Sharks! It is masterfully done and illustrates the transaction costs associated with poorly defined property rights.