Minimum wage won’t cover rent in Europe either

So there is an article circulating online (citing a study by the National Low-Income Housing Coalition) stating that a full-time worker earning minimum wage can’t afford to rent a one-bedroom apartment anywhere in the US. The article seems to hint at the fact that this is the result of too low minimum wages (and too high inequality) in the US.

But is the situation any different in countries with lower inequality and more generous welfare states? What do the figures in Europe look like? In this post, I perform the same analysis for Europe.

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Is fear of immigration fueled by facts or ignorance?

Are the views of anti-immigrant people shaped by reality, or are they merely opposed to something they don’t know anything about? I attempt to answer this question in this post on an international level. I look at how attitudes towards immigration vary by country.

If it is the countries with few immigrants that are against immigration, then we could reasonably conclude that fear of immigration is driven by speculation and ignorance. As people in low immigration countries have very little experience with immigration. If, however, it is countries with many immigrants that are more against immigration, then we could conclude that the fear of immigration is more evidence- or experience-based.

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Should Google hire more women?

So the NYT came out with an editorial detailing how Silicon Valley firms should become more diverse.

It seems wrong to blame firms for their hiring decisions in this case, however. Firms are rational players and they won’t (and neither should they) hire more diverse employees as long as the applicant pool itself doesn’t change.

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A negative side of inclusive institutions

Long-term economic growth has many determinants such as geography, culture, diversity or institutions. The last one, institutions, is probably the most important direct determinant of long-term growth. Institutions influence variables that are highly important for basic stability such as the rule of law, things that are important for sustaining growth levels in the mid-run such as smart investments in infrastructure, and even things that set highly successful countries apart from moderately successful ones such as efficiency of bureaucracies or promoting an entreprenurial/innovative spirit.

The importance of institutions has long been established, but what is still quite an interesting question is how good (inclusive) and bad (extractive) institutions arise. Generally speaking, one must look at the specific history of each country/region to answer this question precisely. For those interested, Acemoglu and Robinson do just that in their book “Why Nations Fail?“. This post, however, is about how a formerly desirable institution can become a rather undesirable institution as the environment changes.

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Are working moms causing child obesity?

Childhood obesity is a growing problem, both physically and conceptually. But what are its causes? Specifically, people have argued that an increasing participation of women in the job market made mothers more absent from their children’s lives. This in turn allowed children to basically do much more what they wanted to do, e.g. watching TV, playing video games and eating fast food, sweets and snacks.

A plausible-sounding hypothesis but is it true? If a relationship exists, through what channel does maternal employment affect childhood obesity? And do the potential effects of maternal employment on childhood obesity depend on the mother’s education?

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The effect of home ownership on unemployment

In an interesting working paper Blanchflower and Oswald (2013) take a look at how home ownership rates may be connected to unemployment. We are pretty much used to thinking of home ownership as a “good” and desirable thing. It is quite often encouraged by governments through subsidies and the like. However, this may have adverse effects.

If you think about it it’s quite intuitive: higher home ownership rates will reduce labor mobility because if you own a house somewhere you will be more reluctant to move. Lower labor mobility will make the labor market less efficient because labor supply will not necessarily follow labor demand in a geographic sense. The result is higher unemployment altogether.

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Measuring the employment rate

The other day I was browsing some employment statistics on Eurostat to verify something I’d heard on the news and then I started wondering how accurate these statistics are. How much can politicians play with them and make them look good? So I read the definition of the employment rate:

The employment rate is calculated by dividing the number of persons aged 20 to 64 in employment by the total population of the same age group. The indicator is based on the EU Labour Force Survey. The survey covers the entire population living in private households and excludes those in collective households such as boarding houses, halls of residence and hospitals.
Employed population consists of those persons who during the reference week did any work for pay or profit for at least one hour, or were not working but had jobs from which they were temporarily absent.

The bold part is what got my attention. So apparently anyone who worked at least one hour a week is considered employed according to this index. I thought this is hardly an acceptable measure, so I started looking for a way to combine this data with average labor hours per worker (ALH) somehow.

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