students studying around campus

Working to better understand the relationship between student effort and parental investments

Eric Richert summarizes his essay, “Estimating an Effort Coordination Game Between Parents and Their Children,” which was a co-winner of the 2016 Scarthingmoor Prize for best MA essay in economics. Eric is currently a PhD student in the Queen’s Economics Department. 

By Eric Richert, Queen’s University

Student learning typically requires effort provision by parents, teachers, and students.  However, the early education literature all too often ignores student effort focusing only on the effort of parents and teachers. The effort decision of the child is often excluded from the optimization problem that is solved by the parent, or is a decision made by the parent.   The traditional model strangely ignores the child’s decisions. This assumption may make sense in early childhood but is less believable as students move into high school and beyond, where they are able to make their own decisions.

In my research, I examine the effects of allowing children to make their own decisions regarding the amount of effort they put into their studies.

Read More »

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The likely impact of Trudeau’s cash-for-access reforms

By Christopher Cotton, Queen’s University

Justin Trudeau’s government is set to introduce changes to the rules governing political fundraising activities. The prime minister has faced heat for the so-called “cash-for-access” fundraisers it has held featuring the prime minister and cabinet ministers. A news report suggested the new legislation will require fundraising events to take place at public locations, rather than private homes or clubs; be announced ahead of time and summarized in reports following the events; and be open to the media. Democratic Institutions Minister Karina Gould has said any changes will revolve around making the fundraisers more transparent.

So, what is the likely impact of these reforms, what do they accomplish, and what else could be done?

Read the column at IRPP’s Policy Options
photo: shutterstock

 

Assorted Links, Jan 16, 2017

By Taylor Jaworski, Queen’s University

1. Demographics and economic growth (NBER, Bloomberg)

2. The December 2016 reporter and January 2017 digest from the National Bureau of Economic Research (NBERNBER)

3. Economists at the 2017 meetings of the American Economics Association on Brexit, the world economy, and gender (AEA)

4. Nobel Prize-winning economist Oliver Hart on the financial crisis (FT)

5. Staying ahead of technological change (The Economist)

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On the Benefits of Government Intervention in the Vancouver Housing Market

By Andrea Craig, JDI Student Fellow, Queen’s University

Housing prices, housing affordability, and the impact of offshore money on residential real estate in Vancouver are not new topics. However, policies to address these issues are new. Beginning last August, foreign purchases of residential real estate in Metro Vancouver are subject to an additional 15 percent property transfer tax. In addition, last month, the provincial government announced repayable down-payment assistance for first-time homebuyers in B.C.

As consumers we associate higher tax rates with higher prices. In the usual case of a tax imposed on all consumers, this is correct. However, in the case of the foreign property transfer tax, prices will decrease (or appreciate less). Here is a stylized analysis showing how the foreign property transfer tax decreases housing prices.Read More »

Assorted Links, Jan 3, 2017

By Taylor Jaworski, Queen’s University

1. Five known and unknowns about the next generation global political economy (Brookings)

2. “Loan Originations and Defaults in the Mortgage Crisis: The Role of the Middle Class” (Review of Financial Studies)

This paper highlights the importance of middle-class and high-FICO borrowers for the mortgage crisis. Contrary to popular belief, which focuses on subprime and poor borrowers, we show that mortgage originations increased for borrowers across all income levels and FICO scores. The relation between mortgage growth and income growth at the individual level remained positive throughout the pre-2007 period. Finally, middle-income, high-income, and prime borrowers all sharply increased their share of delinquencies in the crisis. These results are consistent with a demand-side view, where homebuyers and lenders bought into increasing house values and borrowers defaulted after prices dropped.

3. The current and future state of the sharing economy (Brookings)

4. Statistician Andrew Gelman’s columns under the heading “ethics and statistics” (Chance)

5. From the new issue of the American Economic Review, Gorodnichenko and Talavera on “Price Setting in Online Markets: Basic Facts, International Comparisons, and Cross-Border Integration” (AEA)

We document basic facts about prices in online markets in the United States and Canada, which is a rapidly growing segment of the retail sector. Relative to prices in regular stores, prices in online markets are more flexible and exhibit stronger pass-through (60–75 percent) and faster convergence (half-life less than two months) in response to movements of the nominal exchange rate. Multiple margins of adjustment are active in the process of responding to nominal exchange rate shocks. Properties of goods, sellers, and markets are systematically related to pass-through and the speed of price adjustment for international price differentials.

Lack of government research funding biases policy to favor special interests

By Christopher Cotton, Queen’s University

U.S. Rep. Mick Mulvaney, Donald Trump’s pick for budget director, has attracted attention for asking, “Do we really need government funded research at all?” Although it’s not clear whether Mr. Mulvaney is against all government research funding, the question raises concerns of academics and proponents of evidence based policymaking.

Coauthor Arnaud Dellis (UQAM) and I speak to the impact of government funded research (or the lack thereof) in a research article (ungated) published in the most recent issue of the Journal of Law, Economics and Organization.Read More »

Assorted Links, Dec 26, 2016

By Taylor Jaworski, Queen’s University

1. Canada’s natural resource wealth (Statistics Canada)

2. Updates on Canada’s economic performance (Bloomberg, Reuters)

3. Canadian youth more in-person contact in job search (Globe & Mail)

4. The Writing That Shaped Economic Thinking in 2016 (Bloomberg)

5. Most recent issue of the Journal of Economic Literature (American Economic Association). Here is the abstract from the article by Bagwell, Brown, and Staiger on the WTO:

The WTO has delivered policy outcomes that are very different from those likely to emerge out of the recent wave of preferential trade agreements (PTAs). Should economists see this as an efficient institutional hand-off, where the WTO has carried trade liberalization as far as it can manage, and is now passing the baton to PTAs to finish the job? We survey a growing economics literature on international trade agreements and argue on this basis that the WTO is not passé. Rather, and subject to some caveats, our survey of research to date suggests that the WTO warrants strong support while a more cautious view of PTAs seems appropriate.

The Impact of Post-Secondary Funding on the Educational Attainment of Indigenous Students in Canada

By Maggie Jones, JDI Student Fellow, Queen’s University

In 1980, Canadian men with a bachelor’s degree earned approximately 32% more than those with a high school degree. For women, the equivalent figure was 44%.  By 2005 the university to high school wage premium had increased to about 41% for men and 51% for women (see Figure 1).  The rise in the wage premium over this time period shows just how important post-secondary education has become at an individual level.

In a recent working paper, titled Student Aid and the Distribution of Educational Attainment, I examine the effects of providing post-secondary funding on educational choices in the context of a large program for Indigenous students in Canada. Read More »

Assorted Links, Dec 19, 2016

By Taylor Jaworski, Queen’s University

1. Early (and earlier) childhood education (WaPo)

2. “The Radical Implications of Stable Inflation at Near-Zero Interest Rates” (UofChicago)

3. “Canada Strikes a Deal to Cut Carbon Emissions by Putting a Price on Them” (NYTimes)

4. Obituary for Nobel Prize winner Thomas Schelling (Globe and Mail)

5.Industrial policy in presence of market power (NBER):

Industrial clusters are promoted by policy and generally viewed as good for growth and development, but both clusters and policies may also enable non-competitive behavior. This paper studies the presence of non-competitive pricing in geographic industrial clusters. We develop, validate, and apply a novel test for collusive behavior…. Empirically, we validate the test using plants with common owners, and then test for collusion using data from Chinese manufacturing firms (1999-2009). We find strong evidence for non-competitive pricing within a subset of industrial clusters, and we find the level of non-competitive pricing is about four times higher in Chinese special economic zones than outside those zones.

Assorted Links, Dec 12, 2016

By Taylor Jaworski, Queen’s University

1. Behavioral economics in Canadian public policy (VoxEU) and the backstory for the founding of behavioral economics (Vanity Fair, NYTimes).

2. Research by Raj Chetty quantifying the American Dream (NYTimes).

3. Historians and economic historians debate the history of slavery (Chronicle of Higher Education).

4. Richard Baldwin on globalization over the long-run and in the future (Quartz):

Baldwin argues that globalization takes shape in three distinct stages: the ability to move goods, then ideas, and finally people. Since the early 19th century, the cost of the first two has fallen dramatically, spurring the surge in international trade that is now a feature of the modern global economy.

5. Governor of the Bank of England (and Canadian), Mark Carney speaks on the role of monetary policy during periods of technological change (Bank of England).