Archive | Inequality RSS for this section

A few articles I’m reading 1/10/2014

That’s the first time I’ve typed “2014” all year. Wow.

Here are some articles I’m reading this morning:

1. The news seems to be all over debates on the general shift toward the right in Europe (a feature in a recent issue of the Economist). Specifically, discussion of the tightening of immigration/migration rules are starting to heat up. One analyst has developed models to determine exactly what the long term impact of reduced migration in the UK would be on the overall economy. The results aren’t good.

Our results show that a significant reduction in net migration has strong negative effects on the economy. First, by 2060 in the low migration scenario, aggregate GDP decreases by 11% and GDP per person by 2.7% compared to the baseline scenario (Figure 1). Second, this policy has a significant negative impact on public finances, owing to the shift in the demographic structure after the shock. The total level of government spending expressed as a share of GDP increases by 1.4 percentage points by 2060. This effect requires an increase in the effective labour income tax rate for the government to balance its budget. By 2060 the required increase is 2.2 percentage points. Third, the effect of the higher labour income tax rate is felt at the household level, with average households’ net income declining because of the higher income tax despite the initial increase in gross wages due to lower labour supply. By 2060, the net wage is 3.3% lower in the low migration scenario.

Humans are more mobile in the 21st century than they’ve ever been in human history. Say what one will about globalization, but the reality is that it’s already happened. Cutting the cord on migration would see declines in income in both the developed (through loss of productivity) and developing worlds (through loss of remittances).

2. Niger and France have yet to come to an agreement to the terms of a contract to mine uranium by state owned multi-national giant Areva. Niger would like to increase their share from the current 5% to 12%. Areva is worried about profitability. Not knowing Areva’s operating costs and Niger’s track record of transforming mining revenues into public services, I’m not sure what to think.

France derives 75% of its energy from nuclear power and Areva gets 37% of its uranium from Niger. On top of this, Niger has few other options with which to generate money. The two parties have a lot at stake.

3. Krugman rails on the 50th anniversary of Lyndon Johnson’s War on Poverty. On the surface, it looks to be a bitter failure. Inequality is at an all time high and wages have been slipping for the bottom 25% for decades. Still, Krugman ends on a positive note. The pain we feel now could help spur a new progressive movement. I think he’s probably right. Amid the political circus, We’ve been quietly expanding social programs like Medicaid and it’s going to work out well for us. It’s really easy to be pessimisitic about American politics, but there’s potential light at the end of the tunnel, assuming that progressive can finally get their story straight and the right continues to shoot itself in the face.

4. Groups in Zimbabwe are gearing up to fight over who will succeed the old bastard. I think he’s already dead and we’re actually seeing a robot. I’m not confident that whoever succeeds him will be much better. It’s possible that his poison has been spread so thick, that Zimbabwe, once a rising economic star, will continue to be the inexcusable poster child for African political failure.

At the core of the long running struggle for supremacy in ZANU-PF are two factional groups led by Mujuru and Mnangagwa. Mujuru’s side, sometimes referred to as ‘the moderates’, is a purportedly pro-business and centrist bloc that is seen as attempting to push ZANU-PF politics to the centre and improve relations with the international community.

Mnangagwa’s camp, the so-called ‘hard-liners’ or ‘old guard’, is mostly made up of an elite group believed to have dominated Zimbabwe’s political scene since the 1980s; many assume that this faction would seek to continue Mugabe-style politics, anti-western rhetoric and policies as well as continued authoritarianism.

Americans Die Earlier and Live Sicker than Everyone Else: Why?

DeathsI was just reading a recent op-ed in the Journal of the American Medical Association, “The US Health Disadvantage Relative to Other High-Income Countries
Findings From a National Research Council/Institute of Medicine (NRC/IOM) Report.”

Well, at least it’s an op-ed on a paper from the afformentioned NRC/IOM. The paper digs through data from 17 OECD countries and tracks trends in disease and mortality.

Americans fare worse than other OECD countries in:

• infant mortality and low birth weight
• injuries and homicides
• adolescent pregnancy and sexually transmitted infections
• HIV and AIDS
• drug-related deaths
• obesity and diabetes
• heart disease
• chronic lung disease
• disability

We also tend to die earlier than everyone else (75.64 years) but really can expect to live about as long as Finns (75.86), Portuguese (75.87) and Danes (76.13).

I’m not surprised that we ended up on the bottom of the list. We certainly have much to be ashamed of in terms of social violence, access to means to kill one another when enraged, and a fractured and inefficient health care system (or lack thereof).

What struck me is how varied the list is. Some elements (accidents, homicides and drug-related deaths) have nothing to do with access and quality of health care. Infant mortality and birth weight shouldn’t be so low in a well fed country like the United States.

The JAMA article sums a lot of the systematic problems of US health care and its potential impact on human welfare:

What could explain a health disadvantage that involves conditions as varied as motor vehicle crashes, heart disease, preterm birth, and diabetes? The NRC/IOM panel explored this paradox and found clues in almost every class of health determinants it considered. The United States lacks universal health insurance coverage, and its health system has a weaker foundation in primary care and greater barriers to access and affordable care.4 Care coordination also is a problem. In multiple surveys of patients with chronic illnesses in up to 11 countries, The Commonwealth Fund has shown that US patients are more likely than patients elsewhere to report lapses in care quality and safety outside of hospitals.1 US patients appear more likely than those in other countries to require emergency department visits or readmissions after hospital discharge, perhaps because of premature discharge or problems with ambulatory care. Confusion, poor coordination, and miscommunication between clinicians and patients are reported more often in the United States than in comparable countries.

But we know all this. Continuing:

Health is determined by more than health care, and the NRC/IOM panel explored differences beyond health care to explain the US health disadvantage. It considered individual behaviors and found that although US adults are less likely to smoke (due to successful tobacco control efforts) and may drink less alcohol than adults in peer countries, they have a greater propensity for other unhealthy behaviors. People in the United States consume more calories per capita, are more likely to abuse drugs, are less likely to fasten seat belts, have more motor vehicle crashes involving alcohol, and own more firearms than do people in other high-income countries. US adolescents seem less likely to practice safe sex than adolescents in European countries. These problems are not products of the health care system

But what I’m seeing here is a pattern. All of these problems are concentrated in the poorest strata of the American population. Drug abuse, violence, poor diets, lack of access to health care.. these are all problems non-existent in all but the most troubled areas of the country.

This is, of course, an unforgivable condition. However, given the plurality of the United States, evaluating Americans as a group masks the true problems. Life expectancies are presented as averages. That is, all deaths are recorded, even those in the top 50% of American households, those with health insurance, those who go to the gym, those who eat relatively well, those who won’t kill one another during a family fight, those who won’t use coke, crack, heroin, meth or even abuse oxycontins. All of these households bring the average up.

If we were to only look at the bottom 50%, a much more homogeneous group than that of all Americans, we would find that the average life expectancy to be frighteningly low. We would find that the incidence of avoidable disease is extremely high, the chances of getting shot high, access to health care minimal and a general state of un-health among them all. We already know that African Americans die about four years earlier than white Americans. In total, though, we’d probably find socioeconomic worlds within the United States as different as that of countries like Somalia and Germany.

Note: Ezra Klein also wrote something on this report.

%d bloggers like this: