This years Bates Clarke medal was awarded to Emmanuel Saez. Details of the award are below. Below that is his IDEAS page. The work that Saez is doing across areas like tax, social interactions, information provision and so on provides many good ideas that have relevance to policy. The award committee cite his contributions to areas of public economics like optimal tax theory, measurement of income distributions, field experiments in financial behaviour among other areas.
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Unemployment among the young is something that has been under-discussed in the debate so far. For example, in about a month from now, the first of this year’s college students will start finishing up in Ireland. Last year the numbers read approximately 20,000 undergraduates each from the Universities and IT’s, 13,000 postgraduates from the Universities and approximately 2,000 from the IT’s. Thus, with the assumption that this year is the same as last year, there will be about 40,000 undergraduates and 15,000 postgraduates coming out of college and its past time to start a debate about policy for this group. Given that there is currently a public sector embargo on hiring and private sector hiring is so weak, the options for a lot of this year’s graduates do not look good. My guess is that over half the undergraduate students will go on to postgraduate but the insustainability of this as an employment response should be obvious if the labour market is not set to recover for the next few years.
The recent budget packages are essentially a combination of back-to-work incentives, training schemes, incentives for training, extra third level places and so on. The total budget allocated for these measures is 128 million and they look like a very partial response at best, albeit a start.
Bell and Blanchflower released a paper earlier in the year that is a must-read for any policy-maker who reads this blog and is interested in developing policy to immediately rectify unemployment among young people. The article stresses the importance of not allowing young people to enter into early periods of unemployment and the potential long-run economic and psychological costs of not acting. It offers proposals such as job-sharing, mandatory training/schooling until age 18, development of “shovel-ready” labour intensive projects and so on. I think that we urgently need a policy document from a selection of government departments on how a package of such proposals could be rolled out, given the current budgetary constraints. I know many on this blog may argue that pricing ourselves back into international competitiveness is the only sustainable employment response, but in an environment with such low global demand it would be foolish not to think of urgent active responses for both graduates and non-graduates.
Unemployment in Spain is now 17.4%.
It is one thing for little Ireland to assume that she will recover through exports. It is more alarming when bigger countries assume the same thing, since then one has to ask: where will the demand come from? If we all wait for others to provide it, we may wait a long time.
Martin Wolf has been arguing for a while that the collapse of private demand in high-spending economies such as the UK and US has left a hole in the world economy that has to be filled somehow, and that those countries’ governments will only be able to do so much to fill it. Those limits may be reached in the British case sooner than he may have initially anticipated. As he points out today, the collapse of the German and Japanese economies is the logical flipside of this same coin. It seems that the Germans are finally waking up to the scale of the crisis; how depressing then to read that Berlin is as resolute as ever in its refusal to do what is necessary (HT Eurointelligence):
Auch wenn es immer weiter abwärts geht – weiteres Geld zur Stützung der Konjunktur will die Bundesregierung derzeit nicht bereitstellen. Gleich zu Beginn des Gipfels habe die Kanzlerin klargemacht, dass man nicht zusammengekommen sei, um über ein drittes Konjunkturpaket zu reden, heißt es später. Die Koalition ist sich darüber einig und lässt die Gewerkschaften, die entsprechendes fordern, abblitzen. “Kontraproduktiv” nennt Steinbrück deren Rufe nach zusätzlichen hundert Milliarden Euro.
On the contrary: Steinbrück’s obstinacy is what is counterproductive. One supposes they will eventually change their tune, but how many workers must lose their jobs before that happens?
Not literally, of course, as no one since Fionn mac Cumhail has left the island on foot. Most people fly. While reliable and timely data on migration are hard to get, we do know how many people fly out of country, and how many fly in. This data can be had from the CSO for every month since January 2006. Unfortunately, the data are released with a six-month delay (courtesy of Dublin Airport Authority). They are instructive nonetheless.
Between Jan 2006 and Oct 2008, 30,282 more people arrived at one of the seven airports than left. This trend has reversed however. While 35,453 entered the Republic of Ireland between Jan 06 and Oct 06, and 72,936 between Nov 06 and Oct 07, 78,106 people left between Nov 07 and Oct 08.
That is, eighty thousand people took a one-way flight, before the scale of the recession was clear.
Of those 78,106 people, 58,980 left for Great Britain, 11,018 for Germany, 6,750 for Poland, 6,409 for the Czech Republic, and 4,161 for the Baltic countries. Between Nov 07 and Oct 08, 4,164 people came from Italy, 3,966 from France, and 2,456 from Hungary.