Saturday, December 18, 2010

LEHD vs LED?

Longitudinal Employer-Household Dynamics (LEHD) is an innovative program within the U.S. Census Bureau. We use modern statistical and computing techniques to combine federal and state administrative data on employers and employees with core Census Bureau censuses and surveys while protecting the confidentiality of people and firms that provide the data.

Local Employment Dynamics (LED) is a voluntary partnership between state labor market information agencies and the U.S. Census Bureau to develop new information about local labor market conditions at low cost, with no added respondent burden, and with the same confidentiality protections afforded census and survey data.

See also the following post from David Warsch;

Now meet Julia Lane.

Lane, 54, director of the Science of Science and Innovation Policy Program of the National Science Foundation, spearheaded the creation of the Longitudinal Employment-Household Dynamics (LEHD) program of the US Census Bureau, an enormous innovative data base – a “frame” of jobs over time — that permits the real world of the US economy to be interrogated by the models of unemployment dynamics for which Peter Diamond, Dale Mortensen and Christopher Pissarides shared the Nobel Prize in economics last week.

Instead of a Mention in Dispatches from Stockholm, what Lane got was the Vladimir Chavrid Memorial Award.

Don’t feel sorry for her, though. For one thing, she’s very much alive. For another, the ebullient New Zealander much more nearly resembles another Julia, Julia Child, than the somewhat dour Rosalind Franklin. And of course there’s that Chavrid Award.

Because I knew her to be immersed in the practical details of unemployment dynamics, Lane was the first person I called after the Nobel prizes were announced last October. We hadn’t talked for long before I began to realize that her story was as interesting as the winners’.

It began in 1994, when Lane read an article by Simon Burgess, of the University of Bristol, “The Flow of Unemployment in Britain.” I had been working on looking at the flow of workers through firms and I knew that even firms that had no change in employment across quarters both hired and fired workers simultaneously. But in his model firms had a desired level of employment, and only hired until they reached it and after that they didn’t do anything more. So I called him up and I said, you don’t know me from a bar of soap but that model is just dead wrong. What my data show is that even when firms don’t change their employment levels there’s this huge churn through the work force. Even firms that are laying workers off are still hiring.”

Economists vs Politicians

economists,politicians,physicists,statisticians

Advice to a Young Statistician

He had grown up with numbers. “My dad
was a truck driver and salesman and a good
amateur athlete. He kept score for the baseball
leagues and the bowling teams, stuff like that,
and because of that I grew up with numbers
around me. He liked doing math – not puzzles,
just numbers.

“And so I grew up always thinking I was
going to be a mathematician or something like
that. I’d get books out of the library – Maths
for the Million, that kind of thing.” He got a
scholarship to Caltech. “I got a real break there.
That was the first year they offered the scholarship,
and but for that I couldn’t have gone.” It
was evidently a remarkable family: all four of
the Efron siblings became academics. “My dad
gave us this pretty clear picture that we weren’t
suited for heavy work.”..

Bayesian methods are fine, but if you get too far into Bayesian
methods you quit thinking about inference because it all becomes automatic

Statisticians work at two basic levels. They can develop statistical methods, like linear models, or they can prove things about inference properties. The first is the one that makes you wildly popular with
people who use statistics for their work; I like to work at the second level.

In some ways I think that scientists have misled themselves into thinking that if you collect enormous amounts of data you are bound
to get the right answer. You are not bound to get the right answer unless you are enormously smart.
You can narrow down your questions; but enormous sets of data often consist of enormous numbers of small sets of data, none
of which by themselves are enough to solve the thing you are interested in, and they fit together in some complicated way.
-Interview with Brad Efron (Stanford statistics professor)

Tourism Fact of the Day


According to the UN’s World Tourism Organisation, just 25 million people travelled abroad for holidays in 1950. Today, the figure is more than 800 million, representing an annual growth rate of about 6.5%.

Random Charts

Friday, December 17, 2010

Chart of the Day- The Revolution in Kenya


Kenya Economic Update

India and Kenya- IT sector comparision

There is a broad agreement that several key factors determine competitiveness in IT/BPO:(i)availability of employable skills(including IT skills), (ii) competitive costs,(iii)quality of infrastructure relevant to the IT/BPO industry,and(iv)and overall environment that is conducive to business. Of all these factors, countries can substantially increase their international competetive advantage if they execute smart strategies to increase their skills offering for the industry.

Given these developments, the lack of skills is now the most important binding constraint to the growth of the IT/BPO sector in Kenya. The country currently produces around 30,000 university graduates and about 250,000 graduates from high school annually. However, very few of these graduates, whether at school or university level, are immediately suitable for employment in the IT/BPO industry. According to the recent McKinsey Report (2008), the talent pool for the BPO sector in Kenya currently is very limited. Only about 5,000 graduates are suitable for employment in the industry. The report has projected the skills required for BPO sector to be 70 percent for voice and data operators, 5 percent for managers, 10 percent for engineers and 15 percent for technicians

Source: World Bank, Kenya Economic Update

Related:
Location Readiness Index

Wednesday, December 8, 2010

Don't Cry for Greece

Argentina's experience vividly illustrates the economic damage stemming from default and departure from a hard-peg currency regime. In hindsight, the IMF has recognized that it was too optimistic about Argentina's prospects. The lesson is that postponing an unavoidable debt restructuring increases the ultimate costs, and that orderly restructuring is far preferable to the chaos of unilateral default under extreme duress (see IMF 2003).

While the Greek and Argentine episodes have in common some fiscal and monetary features, they differ importantly in their exchange rate regimes. Argentina's currency board exposed the country to balance sheet mismatches and made it vulnerable to speculative attack. More importantly, both its decision to establish a currency board in the first place and later to abandon it were unilateral. Greece's use of the euro protects it from speculative attack. Moreover, its currency regime is a result of a multilateral agreement involving continental Europe's dominant economic powers. As a member of the euro area, Greece is part of an important and influential "family." It gains a measure of protection by being under the monetary authority of the European Central Bank, one of whose primary objectives is the maintenance of stability in the euro area. As recent developments show, disorder in one country can undermine the financial stability of the whole euro area, giving member countries strong incentive to back each other up. As part of the European Monetary Union, Greece gains powerful supporters that it would lose if it were to go it alone. The magnitude of Greece's debt problem is very great and is not likely to normalize quickly. So these relationships may be tested in a few years when Greece's financial assistance package is depleted.

Data Driven Life

The Quantified Self

The Pomodoro Technique

Cure Together
Cure Together, which allows you to enter your symptoms—for, say, "anxiety" or "insomnia"—and the various remedies you've tried to feel better. One thing the site does is aggregate this information and present the results in chart form.

Fuelly

Zazengo

Rescue Time

and more

Chart of the Day- Interest Rate Spreads


The incentives for governments to stay current on what they owe are hard to measure, but financial market indicators provide a way to gauge investors’ perceptions of the willingness to repay debt. International investors became reluctant to lend to the troubled European governments, especially Greece, as indicated by interest rates on government borrowing. In particular, interest rate spreads for these countries’ debt relative to safer German issuance rose dramatically. Chart 3 shows 10-year bond spreads—the difference between the interest rate on each country’s 10-year bond minus the rate on Germany’s relatively safe 10-year obligations. Movements in these spreads in recent months show that international investors required a much higher rate of return to buy each country’s debt.

Suppose investors can buy a German bond at an annual interest rate of 4 percent with practically no risk, or a Greek bond that has a 3 percent chance of default. Investors will go with the German bond unless the Greek government offers an interest rate around 7 percent—a spread of about 3 percent—to cover the probability of default. Such a relationship can’t be expected to hold exactly in the data, but interest rate spreads can still be used to learn about the likelihood of default.[2] Chart 3 shows that in May 2010, investors’ perceived risk of default increased drastically for Greece and rose by a lesser degree for the other four countries

Monday, December 6, 2010

The United States as a Job Creation Machine- IMF in 1997

The United States as a Job Creation Machine: an Example for Germany?
Characteristics of the U.S. Labor Market compared with Germany
Comparing the German and U.S. labor markets will shed some light on the large differences in job creation, despite similar technology and external conditions. In the United States enterprises and workers respond directly to market incentives:

-the government and union presence in the labor market is more limited
-wage determination is less centralized and developments are guided by market forces; there is little emphasis on incomes policies
-social welfare benefits are not as generous, they are available for relatively short periods, and they are designed to give incentives for recipients to search for new and better job opportunities
-and the wedge between gross wages and take-home-pay, caused by income taxes and social security contributions, is much smaller.

In the tradeoff between allocative efficiency and distributional equality, the United States has emphasized allocative efficiency, while Germany has placed more stress on equity as a cornerstone of the Soziale Marktwirtschaft model. But the U.S. system provides both firms and individuals equal access to the market place and the economic opportunities that are available. The U.S. system stresses the incentives for individual initiative and responsibility for one's economic well-being--that is, rewards to innovation, risk taking, and investment in oneself (i.e., human capital). The social safety net attempts to limit the downside risks associated with this system but not to eliminate inequality of outcomes. From a European perspective, it is interesting that the vast majority of Americans do not question their economic system.

Saturday, December 4, 2010

Wolfenson Biography- a Must Read

James D. Wolfensohn 2010.A Global Life: My Journey among Rich and Poor, from Wall Street to the World Bank

A related podcast

Blog of the Day- An Economist a Day

Viewing the world through the lens of financial economics

Assorted Reports and Books

Beyond the Midpoint: Achieving the Millennium Development Goals

Turkey at the Crossroads: From Crisis Resolution to EU Accession

Assorted Data

Yearbook of Tourism Statistics, 2010 Edition

 Arrivals

A. Border statistics

Table 1. Arrivals of non-resident tourists at national borders

Table 2. Arrivals of non-resident visitors at national borders

B. Statistics on accommodation establishments

Table 3. Arrivals of non-resident tourists in hotels and similar establishments

Table 4. Arrivals of non-resident tourists in all types of accommodation establishments

Overnight stays

Table 5. Overnight stays of nonresident tourists in hotels and similar establishments

Table 6. Overnight stays of nonresident tourists in all types of accommodation establishments.

Trade Profiles 2010

Bosnia and Herzegovina: Selected Issues

Bosnia and Herzegovina: Selected Issues

Contents
  1. Post-Crisis Growth Prospects And Supporting Policies
  2. External Sector Stability and Competitiveness
  3. Cyclical Developments And Fiscal Policy Design
  4. The Case for Pension Systems Reform

Book Recommendation

Perfecting Parliament
Constitutional Reform, Liberalism, and the Rise of Western Democracy
Roger D. Congleton, George Mason University

Thursday, December 2, 2010

Kaushik Basu talk

The India Story told by IMF MD

Let me mention just two powerful features of India’s success story that hold important lessons for other countries.

First, a focus on inclusive growth. In India, the goal is not simply for growth to be rapid, but for growth to also be inclusive—and improve the quality of life for all citizens. As India’s government seeks the best policies to achieve this dual goal, it is fortunate in having advisers like Professor Basu, who brings such strong academic credentials to his position as Chief Economic Adviser.

Second, technological advances. India’s meteoric rise in the services sector has been an inspiration to other countries. Clearly, India’s commitment to excellence in higher education has played a major role in this success. So too did the dismantling of the “license raj” in the early 1990s, which unleashed a powerful wave of creativity and entrepreneurial spirit.

These two features of the Indian growth miracle are coming together through the Unique Identification project, under the leadership of Chairman Nilekani. This project holds out great hope for making India’s social services—which provide a lifeline to hundreds of millions of vulnerable Indians—better able to reach those in need, and more cost-effective. The UID can also advance financial inclusion, which plays a critical role in supporting small businesses and in reducing poverty.