Arnold Kling  

The Latest Batch from the NBER

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1. Robert J. Barro writes,


Convergence at a 2% rate implies that it takes 35 years for half of an initial gap to vanish and 115 years for 90% to disappear. Convergence-rate parameters are important to pin down because they provide guidance on how fast countries like China and India are likely to catch up to richer countries.


...The results implied--in accordance with the data-- that the U.S. South would not get close in per capita income to the rest of the country for about a century. Applying these results to East versus West Germany suggested that a short time frame for convergence was not a realistic expectation.3 And, looking forward to the potential reunification of North and South Korea, the iron law presents a pessimistic outlook on how rapidly the large gap in per capita product could be eliminated

2. John Kennan writes,


One conclusion of this paper is that open borders could yield huge welfare gains: more than $10,000 a year for a randomly selected worker from a less-developed country (including nonmigrants). Another is that these gains are associated with a relatively small reduction in the real wage in developed countries, and even this effect disappears as the capital-labor ratio adjusts over time; indeed if immigration restrictions are relaxed gradually, allowing time for investment in physical capital to keep pace, there is no implied reduction in real wages.

Of course, if robots are taking over, all bets are off.

3. Edward Lazear, Kathryn Shaw, and Christopher Stanton write,


Bosses vary greatly in productivity. The difference between the best bosses and worst bosses is significant. Bosses in the top decile increase each worker's output by about 1.3 units per hour more than bosses in the bottom decile. Given that the typical boss supervises about nine workers and the average worker produces about 10.3 units per hour, this amounts to a change in total productivity that is larger than the amount produced by the average worker.

...The boss's primary job is teaching skills that persist. Contemporaneous motivation of workers is secondary.



COMMENTS (5 to date)
Jeremy, Alabama writes:

For the boss productivity paper, I think you should also have excerpted:

Workers are Additive; Bosses are Multiplicative

Andrew writes:
The boss's primary job is teaching skills that persist.

Hmmm... as a both a "boss" and "employee" I can honestly say that I haven't met another boss in Corporate America that believes that teaching is their primary job.

I know my current boss would find that as a suprise. I'm fairly confident that she wouldn't have that description in her top 10.

Nicholas Weininger writes:

Noteworthy also is the conclusion that you maximize efficiency by assigning better bosses to better workers. Doing so will necessarily increase inequality; you could call it "assortative workmating".

Joe Cushing writes:

What if it is not a closing rate? What if it is a variable absolute closing speed. The two places are independent of one another. Just because you can divide one number by another doesn't mean the two numbers have a real relationship with one another

blink writes:

Re: bosses, I think the comparison suffers from the problem of censored data. After all, even "bad" bosses presumably were chosen for a reason. More interesting would be to compare productivity when a random team member is made "boss" or when there is no boss at all. That seems like the better counter-factual to consider when estimating the value of bosses.

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