Jesse Rothstein
@rothstein_jesse
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Economist, public policy wonk, professor @UCBerkeley , faculty director @CAPolicyLab . On BlueSky at
Joined April 2020
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I’m hesitant to disagree with
@mattyglesias
after he says such nice things about my work. But I think he gets the headline wrong. That’s especially strange because he gets the key points right. A thread. (1/17)
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Some disconnected Saturday thoughts about student loan relief, in a long rambling thread. TLDR: I’m in favor, but our higher ed finance system is really and truly broken, and until we pony up for much more funding for public higher ed, bandaids are better than nothing.
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Right
#1
: The best thing we could do to promote equity within higher education is to better fund the less selective schools, especially community colleges, where most students from lower-income and Black/Brown families go. (2/17)
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Upshot: All meritocratic measures will yield an unrepresentative class. But SAT is worse than others. If sorting is only goal, just consider income directly. If we care about equity, we should prefer measures that don’t derive their predictive power by laundering SES. (12/17)
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In addition to their research contributions, all three econ Nobelists — especially Card — are prolific advisors and mentors, and all three remain very active. I’m so happy for all three, but especially for Card, my advisor, mentor, colleague, and friend.
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Aside: Predicting college grades should not be the be-all and end-all of admissions. (7/17)
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Dropping SAT won’t fix equity on its own. (Fund community colleges!) There’s no tweak to highly selective college admissions that makes it a force for equity overall. But it could be less bad than it is; dropping SAT would help at the margin. (16/17)
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Also growing evidence (tho still suggestive) that going to a better college just doesn’t matter much for high-inc students’ prospects, and matters more for disadvantaged students. That would imply that leaning toward equity is efficient as well. (13/17)
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Right
#2
: Selective colleges should grow, a lot. It would be better if highly selective colleges set a bar and admitted everyone above it, or randomly selected above the bar until big enough to take all of them.
(3/17)
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This just isn’t right. In fact people get approximately the same earnings return per year of school whether or not they graduate. I’d rather get someone to graduate than not, but I’d rather send them to one or two years of college than none at all. (Exception: For profits.)
"Students only benefit if they graduate [college], whereas schools benefit so long as they keep collecting tuition."
@mattyglesias
on the broken economics of the U.S. higher education system via
@bopinion
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Matt suggests “automatically admit the Top X% of SAT-scorers.” That would yield a class of rich students from elite pvt schools, and v few from low-inc schools. Very different from Top X% by class rank as in Texas or CA. (See
@zbleemer
CA paper: ) (14/17)
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Why Cal (not Harvard) is America’s top college
My new op-ed at the SF Examiner
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On (a): SATs predict college grades & everything that predicts preparedness correlates w SES. But this doesn’t show much. Magnitudes matter. SAT is *more* correlated with SES than other measures. Unlike grades, SAT especially good at capturing the SES part of preparedness. (6/17)
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@dynarski
& others emphasize a few low-inc students who have/could get high SATs, and would be left out if SAT is dropped. But there are more low-inc students with high GPAs who can’t get high SATs and are excluded now. And they would do better in college if admitted. (15/17)
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This obv. not meritocratic. SAT isn’t this bad, but it is of this type (tho the black box stays closed). It is more predictive between high- and low-SES students than within SES; low-inc students w high SATs don’t do especially well in college (but those w high GPAs do). (11/17)
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Now I open the black box. It turns out that scores on this test are based entirely on how well the student knows the rules of lacrosse (except in Maryland), when to tack when sailing upwind, and the difference between béchamel and hollandaise. (10/17)
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This is an excellent thread. And to add a more technical point: What Winship is worried about are income, not substitution, effects. To argue that we should worry that income effects will lead to different choices is to say that we actively want people to be limited by poverty.
So putting aside the question of whether Matt is uncivil on Twitter (he often is, he admits it), I want to say this is a mean and uncivil way to think about how other people live their lives and make their decisions.
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I am increasingly convinced that it doesn’t do to respond to the EJMR cesspool by saying “ignore it.” That’s easy for those not targeted by it, or already secure in their careers to say; much harder for early career, women, POC.
#EconTwitter
(1/5)
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If those were the takeaway, it would be a great piece. But
@mattyglesias
ties this to an argument that “the anti-SAT push is misguided” that really doesn’t hold up. (4/17)
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Welcome to my brand new Twitter account. Is this thing on? More content to come soon.
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But without loans, how do we finance college? There’s an alternative: Direct public finance (directly to colleges, or as grants to students), paid for by progressive taxes. This insures the risk: If you do well, you’ll pay back the cost through taxes; if you don’t, you won’t.
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Some references:
My testimony to UC:
Background paper:
Technical paper:
Texas 10% paper:
@zbleemer
paper on CA % policy:
(17/17)
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Today’s thought: We can borrow from the future to provide aid to state & local govts to maintain services this fall. Or we can borrow from the future by operating schools at much reduced quality (at least 5+ more kids/class). The choice seems clear to me.
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When we shut down the economy in 3/2020, it was inevitable that we’d have some inflation as things restarted. Overall, the cycle has been milder than we had any right to expect — no mass starvation, no depression. What is the story in which it could have gone better than this?
Inflation has picked up in many countries as the global economy restarts after the pandemic. 9/
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I heard yesterday about a local school district considering staying 100% remote all next year b.c. they can’t afford to reopen given huge state cuts & extra public health costs. Will people tolerate this, or insist on federal aid to states to prevent this foreseeable catastrophe?
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His argument: (a) SATs do measure college preparedness, (b) in our current system, we could improve our “teen sorting” by making sure all low-inc students take the SAT, (c) bad arguments are made against the SAT. All are correct. But they don’t support the conclusion. (5/17)
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NEW: A short piece (with
@dannyyagan
,
@marthagimbel
) on how the U.S. labor market compares with others during the pandemic. Many peer countries have had hardly any job loss. Worksharing works. Containing the virus works. Doing neither does not.
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It is sometimes hard to understand the Holocaust. This is a really useful illustration -- in our country, in this decade, we set up bureaucratic systems to enable people to be inhuman to each other. This is blood on all of our hands, but especially those who wanted it.
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It is official. I’m a real economist now!
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I am hiring a predoc to work with me at UC Berkeley. Anticipated start this summer.
Please circulate widely! This is a great role for someone considering grad school in the quantitative social sciences. Diverse candidates welcome.
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Consider an example: I develop a new test where I interview each student and give them a score. I label it a perfect “meritocratic sorting tool for academic skill.” It is also a black box – I don’t tell you how I construct scores. (8/17)
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This score very strongly predicts college grades. It is correlated with SES, just like other measures. It is only modestly coachable. And in an admissions system based on it, it would be very much equity-promoting to make sure all students have the opportunity to take it. (9/17)
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The long Great Recession was a big correlated shock. We did little/nothing to protect young cohorts from this shock, and they really got screwed. The consequences were much more severe because they, but not their elders, had to pay much of the cost of their college themselves.
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There’s not much I can do to help the students going through this. But I can say this: EJMR is a cesspool, its existence is a stain on our profession, and any decent person should ignore it. I’m proud to be associated with the
@berkeleyecon
students who are advocating for change.
Currently, Berkeley Econ grad students are being doxxed and threatened on EJMR for signing letters calling for change in our department and campus.
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I'm very happy to finally bring this paper across the finish line. It originated at a seminar
@Econ_Sandy
gave at Berkeley in 2012 or 2013.
Forthcoming in AEJ: Applied Economics: "Winners and Losers? The Effect of Gaining and Losing Access to Selective Colleges on Education and Labor Market Outcomes" by Sandra E. Black, Jeffrey T. Denning, and Jesse Rothstein.
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I'm teaching "Economic Policy for the Pandemic" as an MPP class this fall. I taught it in 2020 and 2021, but of course the subject keeps changing. What are the papers/reports/briefs/etc. published in the last year that belong on the syllabus that I might have missed?
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I'm very proud of this newly accepted paper. My first published RCT -- and there are many of them! With
@ElizabethLinos
,
@arparnar
,
@mattunrath
, and Allen Prohofsky. Thanks to everyone at
@CAPolicyLab
who helped out.
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I try not to say anything when I have nothing to say. That’s not the right approach here. But I still have no words. The George Floyd murder is horrific, a reminder of how slowly our arc bends toward justice. My heart is with all who suffer from that, and I will work to bend it.
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I’m very pleased to join the board of the Upjohn Institute
@UpjohnInstitute
. I’ve long admired the excellent labor market research they do, and am grateful for the opportunity to be a part of it, and to learn more about their other programs.
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NBER is holding a conference on economic mobility on Dec. 2.
@Econ_Sandy
and I are organizing, and
@S_Stantcheva
will give the keynote. The conference program is open to all, NBER affiliates or not. Please submit your papers by the Sept. 15 deadline!
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Always worth saying again.
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My recent paper with Card and Yi indicates that the *causal* urban wage premium in the 2010-18 period is the same for college and non-college workers -- that the difference between the red and blue lines here is entirely driven by differential sorting.
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Tagging various coauthors, though none are responsible for the above:
@mkurlaender
@econsarahreber
@Econ_Sandy
@JeffDenning
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Tomorrow is a momentous day. We are boxing up and giving away the legos. And this morning I caught mister twelve-next-week carefully brushing his own hair.
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A reminder: Please apply to my pre-doc position, or send to people who might be interested.
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This is how we pay for K12 — only extreme libertarians think kids should take out loans to pay for school. Costs have risen at both levels (Baumol’s disease), but we collectively picked up the tab for K12, and handed it to students for postsec. Hard to see a good justification.
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A reimagined unemployment system would treat the jobless like customers, not criminals, while helping them stay afloat as they find their next gig....It would be easier to ramp up in times of crisis and better serve the modern workforce...
via
@voxdotcom
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@CAPolicyLab
anticipates hiring a predoc/research assistant at our Berkeley site, to work with me,
@jrlacoe
,
@edizonross
, and others. Good empirical research exp. for those considering PhD in econ, policy, soc, etc. Diverse candidates strongly encouraged!
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I drafted this thread before I read
@TimothyNoah1
's excellent piece, but we came to basically the same place, and he said it better.
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One arg for debt finance is it creates incentive to pick a good college, to ensure investment pays off. But information is a real problem here — we’ve failed to give students info to make this choice well, and abusive institutions have filled the gap. So this arg falls apart.
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The stable return to education is something close to an iron law of labor economics: People’s earnings go up 7-12%/year of education, almost no matter what. We puzzled over it for many years because it *shouldn’t* be true, but it holds up remarkably well.
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The biggest news: 90% of new UI claimants in CA in first half of April expected to be recalled to their previous jobs. Up from 40% before the crisis.
Thread: New analysis on daily initial Unemployment Insurance claims in California provides detailed snapshot on which workers, regions, and industries have been hit hardest by the
#COVID19
crisis:
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Aside: Ceci Rouse and I studied the effect of student loans on these students, and found that debt makes them less likely to take public-interest jobs. If you believe strongly enough in markets, maybe that’s OK. Or maybe its not.
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@Econ_Sandy
and I are co-organizing an NBER conference on the Economics of Mobility in October. Please send us your papers!
Call for papers, Economics of Mobility. The conference will be held in Cambridge, MA on Friday, October 27, 2023. Submit papers by 11:59pm EST on Thursday, August 10, 2023. More information:
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McConnell's refusal to aid state & local govts hasn't gotten enough hate. Revenue losses will be huge & will force slashed services & lay offs of teachers & other workers. Everyone knows this will ruin any hope of econ recovery. But for McC, more impt to take away ppls pensions.
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It's 2020, so my 10-year-old is taking a zoom woodcarving class as the best we could do to keep him busy so we could get some work done. And it is the apocalypse so he's doing it in our kitchen rather than the smoky outdoors, and our kitchen floor now looks like a chipmunk's den.
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So what do we need? Many more seats at public institutions, selective and not, with enough public funding to keep the cost very low (or Pell-like scholarships that cover the cost).
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A clear illustration of how our supply systems are built on exploiting workers at the weak links of the chain. It also may explain why they can’t respond quickly—who is going to buy a truck to join this business in response to what may be a temporary surge in demand?
Incredible. One of the most crucial links in the supply chain, has been for years, built on the premise that some workers would provide labor for free.
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Those of us not targeted, secure in our positions, need to keep saying repeatedly, emphatically, that we won’t stand for the racism, sexism, and general hatred coming from EJMR. And that women, POC, others historically excluded from economics belong, are valued, are needed. (4/5)
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But there’s a bigger drawback of loans, even for this type of student: There’s a lot of uncertainty about their post-college earnings, much of it out of their control. If things don’t go well, debt can be a real burden.
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Also, for a student headed toward eventual forgiveness, payments until then are a tax — if you earn less, you will pay less. Surely this reduces labor supply. (PhD students: This is a paper dying to be written!)
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It has been clear for a long time that student loans were comprehensively broken. But we haven’t been willing to pony up the money to fund colleges directly, and obscure federal budgeting rules make student loans seem cheap.
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@mattyglesias
This shows that you *can* use essays to predict family income. It doesn't show that that is how UC actually uses them. If a college wants to privilege the privileged, no change in available info will stop them. But not so clear for a college that wants diversity.
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Deficits: We are indeed in a bad equilibrium here. But forgoing valuable programs to reduce deficit, or insisting on pay-fors for everything, just so the Rs can give away the savings via tax cuts, is unilateral disarmament.
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A hard problem: Students with low baseline earnings, not enough to live on. For many, postsec will raise earnings, but if they have to pay off loans they will still be poor. This group has grown with income inequality, and is a big user of loans. They need direct subsidies.
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To all those dunking on me for this quote: It is *not* an endorsement. Next sentence: “There’s just no scenario where the tens of millions who are on unemployment insurance right now would have jobs if it were a couple of percentage points cheaper to hire them.”
Economists don't necessarily think Trump's payroll tax cut would be counterproductive, just inefficient and insufficient for the moment.
“Directionally, it’s not a crazy answer." --
@rothstein_jesse
“Not the best tool in our arsenal.” --
@J_C_Suarez
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I only see 2 ways out of it, which are really just 1. We can increase direct public funding and reduce tuition, so loans aren’t needed. Or we can tighten rules about where loans can be used, effectively limiting them to low-tuition publics and providing seats to meet demand.
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@imbernomics
My 9th grader excitedly told me he was finally learning math he knew I hadn’t learned, because the curriculum had changed since I was in HS.
Oh, what is that?
LSRLs. You didn’t learn those, right?
What are LSRLs?
<eyeroll> Least Squares Regression Lines
Oh…
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Regressive: This is letting the perfect be the enemy of the good. Some relief will go to high earners (though not all that much), but they’ll wind up paying higher taxes to cover it. I see no sense in which this makes a more progressive redistribution harder to accomplish.
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@gulogulo37
@mattyglesias
Yes, I am. I am agnostic about whether some test should be included. But definitely get rid of the SAT.
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@besttrousers
@PeteTheCitizen
As I read it, most of the paper is about arguing (not very convincingly) that income effects are large. I missed the argument that income effects are relevant. If one doesn’t share the view that poor women don’t know what is good for them, his case evaporates.
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Q for development
#EconTwitter
: I’ve been offered an honorarium to review a Ph.D. thesis at an Islamabad university. I don’t need the $, and it can do more good there. What Pakistani charity should I ask them to direct the payment to?
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I have a new piece in the Washington Post with
@econjared
on long-term scarring effects of recessions and the urgency they add to aggressive policies.
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And these are not typical students. Many more students come from much more limited means, and the choice is public college vs. none. There’s little efficiency argument for debt finance here. And earnings risk weighs much more heavily.
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The broken system really has screwed people, and this relieves that for many. One could design better policies, but not get them through a senate with 50 Rs whose only goal is to block any accomplishments. This is better than nothing, and Biden could do it unilaterally. Go for it
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Arguments I’ve seen against it have been really terrible. Inflation: Any redistribution will raise inflation. Can offset that through higher taxes or higher rates. Inflation isn’t a reason not to do the redistribution.
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The graph, by the way, is from David Card’s magisterial Handbook of Labor Economics chapter on the causal effect of education on earnings, which did a lot to wrap up and put a bow on this enormous literature. Now blessed by the Nobel committee!
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Come work with us at the
@CAPolicyLab
. Among other things, this could be a great way to have a predoc experience while doing real policy work.
cc:
@econ_ra
The California Policy Lab is hiring a Research Associate to join our UC Berkeley team. Please spread the word:
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A follow-up thought to this: One reason I am proud to be at
@UofCalifornia
is that a very large share of the new top-tier universities created worldwide in the last, say, 70 years are UC campuses. Others should join the party!
Right
#2
: Selective colleges should grow, a lot. It would be better if highly selective colleges set a bar and admitted everyone above it, or randomly selected above the bar until big enough to take all of them.
(3/17)
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Shachar Kariv, the Berkeley economics department chair, just reminded me that David is no longer allowed to win the department’s best advisor award, to give others a chance.
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This is an awesome tool. Really highlights the inequities created by Prop 13.
This is why California cities are always on verge of bankruptcy.
You got homeowners in my neighborhood paying as low as $100 a year vs $31,500 a year in property taxes thanks to Prop 13. So our city's fiscal stability relies disproportionately on those red numbers in this pic.
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Another point: This has impt equity implications. If we act as if only BAs matter, we won’t try to get students to college who might not graduate. Instead, we should be giving everyone the opportunity. We should also be helping as many as we can graduate-these aren’t in tension.
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Don’t know what EJMR is? Great – you are better off for it. Do you know? Then know that the views on there, while unfortunately present in our profession, are very much minority views, and many of us will work strenuously to combat them. (5/5)
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I'm proud that
@CAPolicyLab
was able to help this important project happen.
Restorative justice drastically reduces recidivism for teenagers facing medium-severity felony charges. RCT shows 19pp (44%!) drop in P(rearrest) within 6 months that persists 4 yrs after! Awesome paper by
@yotamshemtov
, Steven Raphael and Alissa Skog! 👉
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Very nice to see this creative paper come to fruition! Congratulations,
@TomasEMonarrez
!
Forthcoming in AEJ: Applied Economics: "School Attendance Boundaries and the Segregation of Public Schools in the U.S." by Tomás E. Monarrez.
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We write: “If U.S. employment had fallen only 0.9% as it did in Germany and Japan, 24 million more Americans would have a job.”
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Scream it from the rooftops! We bought time, at a very high price, and then Trump wasted every second of it.
The great squandering: Americans bought govts 8 weeks to ramp up testing, hosp capacity, equip, etc. Sacrificed contact w/ loved ones and 10s of millions of them sacrificed jobs and income. Did Trump admin accomplish 1 single thing with this time? Some states did, but the admin?
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It isn't clear to me why CBO seems to be putting its thumb on the scale. But its estimates seem far out of line with professional opinion.
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I'm proud to have played a small role in this. Judge bars University of California from all use of SAT, ACT scores in admissions: "Nondisabled, economically advantaged and white test-takers have an inherent advantage in the testing process."
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Are legislative hearings what you've been missing during the pandemic? Listen to me testify to the University of California Regents today about the SAT.
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I have a new piece using data from
@joinhomebase
to measure the impact of COVID-19 on the labor market in real time. See
@alexbartik
's rundown -- also with
@mattunrath
, Marianne Bertrand, and Feng Ling.
@CAPolicyLab
@irleucb
,
@UChiPovertyLab
,
@RustandyCenter
How has the COVID-19 crisis been affecting hourly workers at small businesses? I've been working with
@joinhomebase
along with Marianne Bertrand, Feng Lin
@rothstein_jesse
@mattunrath
@CAPolicyLab
@UChiPovertyLab
@RustandyCenter
@ChicagoBooth
to find out [1/10].
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This seems really egregious, both as a legal interpretation and as policy. Imagine the idea on the product side — no, you can’t sell that widget to someone else for $2 because I’ve bought it in the past for $1. It is no more defensible here.
This is seriously f'd up: at-will workers quit their jobs for higher pay, old employer asks court to block them from starting said new jobs until they can re-hire, judge grants injunction preventing them from starting their new jobs. AT-WILL WORKERS.
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Come work at the California Policy Lab!
Driven by data and passionate about public service?
Come join us! CPL's Berkeley site is hiring an Operations Director and Postdoctoral Scholar- please share widely ->
#EconTwitter
#highered
#California
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But: It pretty thoroughly breaks the financing model. For a student heading toward eventual forgiveness (also via PSLF), there’s no reason not to take out more loans — at the margin, they will be forgiven. So price/value pressure on colleges is attenuated.
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Just posted an erratum to the
@joinhomebase
analysis I've been doing recently (w
@AlexBartik
, Bertrand, Lin, and
@mattunrath
). We were dramatically understating the importance of layoffs at firms still in operation. Corrected results here:
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There is only one group of students for which debt finance of higher ed arguably makes sense: From upper middle class families, and likely bound there themselves. Making them take loans aligns incentives - public v private college, high-paid vs. low-paid job.
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