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  • Commentary posted May 12, 2015 by Salim Furth, Ph.D. When Moving to a Better Neighborhood Is Harmful

    Would moving from a rough public-housing project in Baltimore to a middle-class neighborhood in the suburbs help teenagers? One would think so. After all, the projects are rife with unemployment, violence and drug abuse, and are poorly served by city schools and police. And research generally confirms that growing up in an average neighborhood is much better for poor…

  • Issue Brief posted May 7, 2015 by Salim Furth, Ph.D. Can Changing Your Address Change Your Fortune?

    Two economic research papers published this month show that where children live can have an impact on their prospects for success later in life. Parents already know that—and it is why houses in good neighborhoods often cost three or four times as much as houses in bad neighborhoods. The new studies have garnered outsized attention,[1] but the results are neither as…

  • Backgrounder posted March 11, 2015 by Salim Furth, Ph.D. Stagnant Wages: Fact or Fiction?

    Recent data show that wages have been growing recently at rates comparable to their long-term trends. Measuring average wages accurately is more difficult than it sounds, so this paper looks at six metrics of wage and compensation to present a complete picture. Since the beginning of 2013, wages have grown about 0.9 percent per year. Since 2006 (and thus including the…

  • Issue Brief posted February 24, 2015 by Salim Furth, Ph.D. Who Is Working Less?

    Labor force participation in the past few years has been lower than at any time since the 1970s. Heritage Foundation research using Current Population Survey (CPS) data finds that labor force participation decreased more among low-income households than among high-income households. Our finding contradicts results found by Stanford University economist Robert Hall using a…

  • Commentary posted February 3, 2015 by Salim Furth, Ph.D. Cutting Unemployment Insurance Probably Does Create Jobs, But We Don’t Know How Many Yet

    A new paper from the National Bureau of Economic Research has made waves by claiming that 1.8 million jobs were created by the expiration of unemployment benefits at the end of 2013. What went into that estimate? Will it stand up to criticism? First, some perspective: 2014 really was a good year for the labor market. The U.S. economy created 3 million jobs in 2014, up…

  • Commentary posted January 14, 2015 by Salim Furth, Ph.D. Budget accuracy has a conservative bias

    There is hubris in every government project. The unspoken idea behind bills as comprehensive as the Affordable Care Act and Dodd-Frank is that legislators can understand how a system works, tinker with it and improve it. Psychologically, it is unreasonable to expect that anyone is unbiased about her own grand idea, so legislating has a built-in bias toward government…

  • Backgrounder posted December 30, 2014 by Salim Furth, Ph.D. Accurate Budget Scores Require Dynamic Analysis

    A‌s the new Congress considers changes to the Joint Committee ‌on Taxation (JCT) and Congressional Budget Office (CBO), it should promote improvement in the methods used for evaluating macroeconomic policy. Currently, the JCT and the CBO often use “static” scoring methods, which make very strong assumptions about equilibrium responses to policy changes, often assuming no…

  • Commentary posted September 17, 2014 by Salim Furth, Ph.D., Curtis S. Dubay Six Demonstrably False Claims In Thomas Piketty’s Theory Of Wealth

    Thomas Piketty’s “Capital in the Twenty-First Century” became the most talked-about and most critiqued economics book of 2014 before academic readers had a chance to finish the book. When they did, many responded with rebuttals that cut directly to the core of Piketty’s argument. In “Capital,” Piketty makes six main claims. Here, we compare the evidence Piketty offers in…

  • Backgrounder posted September 12, 2014 by Curtis S. Dubay, Salim Furth, Ph.D. Understanding Thomas Piketty and His Critics

    Thomas Piketty’s Capital in the Twenty-First Century[1] is a treatise on how wealth inequality evolves in capitalistic economies. It is the most talked-about and most critiqued economics book of 2014 because Piketty’s timing was perfect: He released the English edition when income inequality was being actively debated in the United States. President Barack Obama brought…

  • Backgrounder posted August 7, 2014 by Salim Furth, Ph.D. The Export-Import Bank: What the Scholarship Says

    Much of the published support for the Export-Import Bank of the United States (Ex-Im Bank) is based on inaccurate views of the function of the bank or on mischaracterizations of the economics of providing export subsidies, which is the bank’s actual function. Export subsidies were extensively studied in a lengthy scholarly literature on “strategic trade policy,”[1] which…

  • Backgrounder posted June 9, 2014 by Salim Furth, Ph.D. Stimulus or Austerity? Fiscal Policy in the Great Recession and European Debt Crisis

    The Great Recession of 2008–2009 and the European debt crisis of 2010–2012 were the greatest interruption in economic growth since the Second World War. A debate has raged since the recession began between economists who believe that government spending is the problem and those who believe it is the solution. Available data show neither a uniform European “age of…

  • Special Report posted June 6, 2014 by Alberto Alesina, Ph.D., Romina Boccia, Ryan Bourne, Salim Furth, Ph.D., David Howden, Ph.D., Filip Jolevski, Miguel Marin, Matthew Melchiorre, Derrick Morgan, Dalibor Rohac, Veronique de Rugy Europe’s Fiscal Crisis Revealed: An In-Depth Analysis of Spending, Austerity, and Growth

    About the Authors Preface Chapter 1 Chapter 2 Chapter 3 Appendix: Country Profiles About the Authors Alberto Alesina, PhD, is Nathaniel Ropes Professor of Political Economy at Harvard University. He is also a member of the National Bureau of Economic Research, the Center for Economic Policy Research, the American Academy of Arts and Sciences, and the…

  • Commentary posted April 18, 2014 by Salim Furth, Ph.D. Pay college athletes on the open market

    Division I college football players are professionals. They are given room, board and health care in exchange for their time, and served by tutors, coaches and trainers. They are paid only if they work. If a star receiver decided to focus on academics and scale back football practice, he would be dropped from the team and lose his scholarship. His “student” status is a…

  • Issue Brief posted January 10, 2014 by James Sherk, Salim Furth, Ph.D. Heritage Jobs Report: Unemployment Drop Is Coal in America’s Stocking

    The Bureau of Labor Statistics reported that the unemployment rate fell to 6.7 percent in December from 7.0 percent in November, but the change was caused by people who gave up looking for work. Employers created only 74,000 jobs, a depressing drop from the previous three months. Labor force participation dropped to 62.8 percent, matching the lowest rate since 1978. The…

  • Issue Brief posted December 6, 2013 by James Sherk, Salim Furth, Ph.D. Heritage Employment Report: Slow Recovery Continues in November

    The Bureau of Labor Statistics reported that the recovery continued at a steady pace in November. The unemployment rate fell 0.3 percentage point while employers created 203,000 jobs. Although the numbers are initially impressive, they partly reflect the return of federal employees furloughed during the October government shutdown. Labor force participation fell over the…