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In this new paper, we learn that mandating child care benefits for women (in Chile) corresponds to lower initial wage offers for them.

This paper studies the effect of mandated employer-provided child care on the wages of women hired in large firms in Chile.

The results indicate that the montlhy starting wages of women hired in firms with this characteristic is lower compared with
wages of women in other firms (between $24,000 to $53,000 Chilean pesos of 2009). (wintercow: that is about $40 to $80 per month)

Let’s ask a rhetorical question: what is better for women, or what would women prefer?  A world where they have the flexibility to negotiate for cash wages versus child care provision or a world where child care provision is mandated for them? It’s the same as how my family feels about health insurance. Right now, the U of R pays almost $15,000 per year into my health insurance premiums. That’s a ton of resources right there. I would much prefer a world where I would get even some fraction of that in wages and could purchase real insurance in the market. And no, don’t go telling me there is a market failure in health insurance – first of all, I am almost sure you have not read the Arrow paper from over 50 years ago where this argument was laid out, and second I am almost sure you couldn’t list a single aspect of the regulatory framework in health insurance today that resembles something that would emerge in a free-market in insurance.

Next up: Matthew Kahn has written extensively on our ability to adapt to the challenges that may come from a warmer planet. Here is some evidence that by simply relaxing international migration restrictions, we can _________ (insert your favorite explanation here) with regard to global warming:

The Geography of Development:  Evaluating Migration Restrictions and Coastal Flooding
by Klaus Desmet, David Krisztian Nagy, Esteban Rossi-Hansberg

… Our results indicate that fully liberalizing migration would increase welfare more than three-fold and would significantly affect the evolution of particular regions in the world.  We then use the model to study the effect of a spatial shock.  We focus on the example of a rise in the sea level and find that coastal flooding can have an important impact on welfare by changing the geographic-dynamic path of the world economy.

But of course, making an argument like, “hey, let’s have more free-trade in both goods and people and we will largely have dealt with the very worst that global warming may bring,” is not going to win anyone any popularity contests. What is perhaps a better research question is why a finding like this would not be pushed and pushed and pushed and in fact celebrated? Think about it, we can do something on the policy side that corresponds with a tremendous improvement in human freedom and in fact human rights, and it has the side benefit of being one of the best things we can do to protect ourselves from global warming. But we all know why this is not popular.

Here is Jeff Sachs’ new paper on robots (recommended).

And finally, this is me being cranky for a day. Can I stop reading the ubiquitous posts and articles on “what’s wrong with academic economics?” I don’t care. To the extent there is a problem with academic economics, I would argue it stems as much from the problems of universities in general and not some systemic problem with the discipline.

Have a great week. Kudos to Jordan Spieth on his Masters win. I was not rooting for him, but as a general matter it is just so impressive seeing people work hard and perform excellently.

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