More evidence on education and inequality

Family Background and Income during the Rise of the Welfare State: Brother Correlations in Income for Swedish Men Born 1932 – 1968I

Anders Björklund, Markus Jäntti, Matthew Lindquist

Forthcoming in Journal of Public Economics

We have found that family background was more important for the incomes of Swedish
men born in the 1930s and 1940s than for those born during the 1950s and have been reasonably
stable since then for cohorts born through 1968. Our estimated brother correlations in total factor
income fell from 0.49 for men born in the early 1930s to 0.32 for men born some 15 years later.
During the subsequent 15 years, the estimated brother correlations are quite stable but reveal a
slight increase. Our conclusion that there is a substantial decline in the importance of family
background is robust to a number of sensitivity tests.
In order to explore the mechanisms driving this decline, we introduced schooling into the
analysis. While we found some suggestive evidence that schooling, or something related to it,
can account for much of the decline, we could refer the decline to changes in neither the return
to schooling nor the brother correlation in years of schooling.One candidate explanation is the compulsory school reform that was gradually
introduced from around 1945 to 1955 and that increased the length of compulsory schooling and
delayed tracking. Meghir and Palme (2005) show that this reform had intergenerational effects,
and the same applies to results by Pekkarinen et al. (2006) for a similar reform in Finland, and
Black et al. (2005) for Norway.

Cooperation when N is large: Evidence from the mining camps of the American West

 Journal of Economic Behavior & Organization
Article in Press,

Abstract

The sources of cooperation in smallgroups are well documented. There is, however, less understanding aboutcooperation in large groups. I study the enforcement of property rightsin the mining camps of the American West. Miners demanded secureproperty rights and protection from violence to exploit the region'smineral wealth. In the model, miners must divide their labor betweenmining and supporting property rights institutions. The main predictionof the model is that cooperation in property rights enforcement emergesonly when social norms of cooperation are sufficiently widespread. Themodel also predicts that social norms are less effective in miningcamps with large populations or high labor productivity. I test thesepredictions against detailed evidence from the letters, diaries, andreminiscences of miners in 25 camps in California, Colorado, andMontana and find that the evidence supports the predictions. Theresults show that social norms can significantly lower the costs ofcollective action in large groups.

Keywords: Cooperation; Collective action; Social norms; Property rights; Large groups; Mining camps; American West

Scania - an institutional success story

Differences in production were of course due to farm size and natural conditions. Large farms produced more than small farms and farms in the plains produced more than farms situated in more forested areas of the region. However, it is when we control for these factors that we reveal the most interesting differences in production achievements. First, property rights mattered; freeholders produced more per area unit than tenants on Crown and noble land. Secure property rights among self-owners together with rising prices and fixed taxes promoted investments in crop production. For those peasants that were tenants under the nobility, rising rents and the threat of eviction prevented such immense investments.

Explaining agricultural growth. The case of Sweden 1700-1850.*

Mats Olsson and Patrick Svensson
Dept. of Economic History
Lund University

presented at the Social Science History Association conference, Miami23–26 October 2008, Session: Time and the Nature of Agrarian Change.

The effect of FDI on inequality depends on government size

Lee, Cheol-Sung, Francois Nielsen, and Arthur S. Alderson. 2007. "Income Inequality, Global Economy and the State." Social Forces 86:77-112.

In sum, the results of the interactive models support our hypothesis that
the effects of foreign capital penetration on income inequality can be either
positive or negative, depending on the buffering role of the state. In societies
with relatively small public sectors, higher level of FDI is associated with higher inequality. However, in societies with larger public sectors, this relationship is reversed.

Baggesen on school vouchers in Sweden and US

Klitgaard Michael, Baggesen. 2008. "School Vouchers and the New Politics of the Welfare State." Governance 21:479-498.


School vouchers might seem a natural featureof the liberal welfare model of the U.S. and American societygenerally. However, for social democratic welfare states inScandinavia, school vouchers would seem to be a contradiction.Nevertheless, school vouchers have faced severe resistance in the USA,and the program has so far not been adopted as a national educationalreform, although sporadic and limited state-level developments can beobserved. In Sweden, however, the social democratic welfare stateadopted a national, universal public voucher scheme in the early 1990s.The goal of this article is to explain this counter-theoreticalempirical puzzle. It is argued that the varying output from politicalprocesses on school vouchers in the USA and Sweden is to be explainedby the different ways in which political institutions affect politicaldecision making in the two countries.

Egoistic torrent clients?

Carra, Damiano, Giovanni Neglia, och Pietro Michiardi. 2008. "On the Impact of Greedy Strategies in BitTorrent Networks: The Case of BitTyrant." 2008 Eighth International Conference on Peer-to-Peer Computing:311-320.

The success of BitTorrent has fostered thedevelopment of variants to its basic components. Some of the variantsadopt greedy approaches aiming at exploiting the intrinsic altruism ofthe original version of BitTorrent in order to maximize the benefit ofparticipating to a torrent. In this work we study BitTyrant, a recentlyproposed strategic client. BitTyrant tries to determine the exactamount of contribution necessary to maximize its download rate bydynamically adapting and shaping the upload rate allocated to itsneighbors. We evaluate in detail the various mechanisms used byBitTyrant to identify their contribution to the performance of theclient. Our findings indicate that the performance gain is due to theincreased number of connections established by a BitTyrant client,rather than for its subtle uplink allocation algorithm; surprisingly,BitTyrant reveals to be altruistic and particularly efficient indisseminating the content, especially during the initial phase of thedistribution process. The apparent gain of a single BitTyrant client,however, disappears in the case of a widespread adoption: our resultsindicate a severe loss of efficiency that we analyzed in detail. Incontrast, a widespread adoption of the latest version of the mainlineBitTorrent client would provide increased benefit for all peers.

AER 2008, 98:3 Pride and Prejudice: The Human Side of Incentive Theory

Ellingsen, Tore, and Magnus Johannesson. 2008.

Desire for social esteem is a source of prosocial behavior. [...] Control systems and pecuniary incentives erodemorale by signaling to the agent that the principal is not worthimpressing.

the counterfactual error AGAIN...

estimations
indicate that 40 percent of the EU population would be living in poverty if all
public transfers were withdrawn, compared to the 15 percent living in poverty
today (Latta, 2007)

Latta, M.
(2007). Public transfers and private help: support networks of marginalised and poor individuals in Sweden in the 1990s. Göteborg: Dept. of Sociology Göteborg Univ.

Dewan and Shepsle explain Acemoglu & Robinson

This how Dewan and Shepsle (2008:548) explain the Acemoglu & Robinson paper ‘Why Did the West Extend the Franchise?

Dewan, Torun and Kenneth A. Shepsle. 2008. "Recent Economic Perspectives on Political Economy, Part II." British journal of political science 38:543-564.

Imagine a political elite confronting the prospect of social unrest. Somehow, politically disadvantaged groups have managed to overcome collective action obstacles to pose a threat. In principle, the elite could promise policy reform of some sort, for example an improvement in working conditions or housing or the distribution of land. They might well deliver on the promise initially, for to fail to do so would provoke the social unrest they currently fear. But once the conditions of unrest have dissolved, or the obstacles to collective action have re-emerged, it is possible for this elite to renege on its promises. That is to say, if the favourable conditions under which politically disadvantaged groups can mobilize are transitory, then promises from the elite that extend beyond the period in which those conditions are expected to hold are not credible. In order to be credible the promise has to take a more durable form, one difficult for the elite to reverse. Acemoglu and Robinson suggest that franchise extension possesses this greater durability – it is more difficult to reverse than, say, a land reform that can be undone.

More evidennce on altruism in a structured population

Altruists, Egoists, and Hooligans in a Local Interaction Model Ilan Eshel; Larry Samuelson; Avner Shaked

American Economic Review 1998 88:157-179

We study a population of agents, each of whomcan be an Altruist or an Egoist. Altruism is a strictly dominatedstrategy. Agents choose their actions by imitating others who earn highpayoffs. Interactions between agents are local, so that each agentaffects (and is affected by) only his neighbors. Altruists can survivein such a world if they are grouped together, so that the benefits ofaltruism are enjoyed primarily by other Altruists, who then earnrelatively high payoffs and are imitated. Altruists continue to survivein the presence of mutations that continually introduce Egoists intothe population.